by | Mar 25, 2020 | Tax Tips and News
IRS Taking Steps to Avoid Virus Spread
While the delay of tax deadline day to July 15 has grabbed a lot of headlines, the IRS is continuing to look for ways to avoid spreading the coronavirus.
The agency has shut down all Taxpayer Assistance Centers and discontinued face-to-face service throughout the country until further notice. The IRS says the shutdown is temporary, but will be in effect until it can be safely lifted.
In the meantime, IRS is continuing to process tax returns, issue refunds and help taxpayers to the greatest extent possible. Any taxpayers needing assistance should go online to www.IRS.gov or call the IRS. The agency website cautions that they are seeing higher-than-normal call volumes, so it would be wise to check out the section of the IRS website dealing with assistance calls before dialing.
IRS recommends trying to find answers to questions online first for fastest service.
IRS Online Resources
The Internal Revenue Service has established a special COVID-19 information web page at www.irs.gov/coronavirus, designed to help individuals, businesses and others get the tax information they need relating to the outbreak.
For other information about the COVID-19 virus, people should visit the Centers for Disease Control and Prevention (CDC) (https://www.coronavirus.gov) for health information. Other information about actions being taken by the U.S. government is available at https://www.usa.gov/coronavirus and in Spanish at https://gobierno.usa.gov/coronavirus.
The Department of Treasury also has information available at https://home.treasury.gov/coronavirus.
– Story provided by TaxingSubjects.com
by | Mar 23, 2020 | Tax Tips and News
The Treasury Department, along with the IRS and the U.S. Department of Labor, have unveiled a package of tax credits for small and midsize employers can use to “immediately and fully” reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to employees.
The relief is provided under the Families First Coronavirus Response Act signed by the President last week.
The new law will help the nation in the fight against COVID-19, giving all American businesses with fewer than 500 employees the funds to provide workers with paid leave, either for the employee’s own health needs or to care for family members. The legislation also will enable employers to keep their workers on the payroll, while at the same time ensuring workers aren’t forced to choose between a paycheck and the public health measures needed to combat the spread of the virus.
Here are the key provisions of the measure:
Paid Sick Leave for Workers
- For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded paid child care leave when employees’ children’s schools are closed or child care providers are unavailable.
Complete Coverage
- Employers receive 100% reimbursement for paid leave pursuant to the Act.
- Health insurance costs are also included in the credit.
- Employers face no payroll tax liability.
- Self-employed individuals receive an equivalent credit.
Fast Funds
- Reimbursement will be quick and easy to obtain.
- An immediate dollar-for-dollar tax offset against payroll taxes will be provided
- Where a refund is owed, the IRS will send the refund as quickly as possible.
Small Business Protection
- Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or child care is unavailable in cases where the viability of the business is threatened.
Easing Compliance
- Requirements subject to 30-day non-enforcement period for good faith compliance efforts.
- To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week.
The legislation says employees of eligible employers can get two weeks—up to 80 hours—of paid sick leave at 100% of the employee’s pay. The leave is for employees unable to work
because the worker is quarantined or experiencing virus symptoms and seeking a diagnosis.
An employee who’s unable to work because of a need to care for someone in quarantine, to care for a child whose school is closed or whose child care provider is unavailable due to the virus can receive two weeks (up to 80 hours) of paid sick leave at 2/3 the employee’s pay.
An employee who is unable to work due to a need to care for a child whose school is closed, or child care provider is unavailable for reasons related to COVID-19, may in some instances receive up to an additional 10 weeks of expanded paid family and medical leave at 2/3 the employee’s pay.
For other qualifying reasons, contact the U.S. Department of Health and Human Services.
Paid Sick Leave Credit
For employers, the legislation gives relief when employees have to stay home due to infection, quarantine or self-quarantine, or the wait for a diagnosis. Employers can receive a refundable sick leave credit at the employee’s regular rate of pay, of up to $511 per day or $5,110 total, for a total of 10 days.
In the case of a worker who is caring for someone with the virus, or caring for a child when the child’s school or other facility is closed due to the Coronavirus, employers may claim a refundable credit of up to two-thirds of the employee’s regular rate of pay, up to $200 per day and $2,000 total for up to 10 days.
Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.
For a detailed list of provisions of the Families First Coronavirus Response Act, check out the IRS website.
– Story provided by TaxingSubjects.com
by | Mar 21, 2020 | Tax Tips and News
Last Updated: March 20, 2020 at 6:19 p.m.
Treasury Secretary Steven Mnuchin announced on Friday, March 20, 2020 that the federal filing deadline was being moved to July 15, 2020 due to the COVID-19 outbreak. State departments of revenue are expected to follow suit, so we have begun building a list of affected state individual income tax return deadlines. We will update this list as we receive new information.
Note: We are including quotes from the departments of revenue that have announced the intention of extending the deadline, but have not yet published an official date. Those states that do not have a firm date will include an “expected individual income tax deadline.”
- Alabama
“The Department plans to mirror these return filing extensions as appropriate and enter corresponding taxpayer relief orders. Please monitor the Department’s Newsroom for updates.”Expected Individual Income Tax Deadline: July 15, 2020
- CaliforniaIndividual Income Tax Deadline: July 15, 2020
- Connecticut
“Individuals in the process of preparing their Connecticut income tax (Form CT-1040) returns due April 15, should be advised that DRS will adjust due dates for filing and payment of state income taxes to align with any specific, actionable announcement from the Internal Revenue Service regarding due dates for the filing and payment of federal income taxes.”
Expected Individual Income Tax Deadline: July 15, 2020
- Indiana
“DOR is closely monitoring the IRS on possible changes to filing and payment due dates and will be prepared to follow suit.”
Expected Individual Income Tax Deadline: July 15, 2020
- Iowa
Individual Income Tax Deadline: July 31, 2020
- Maryland“If the IRS extends its April 15th filing deadline for corporate and individual income tax returns, Maryland will conform to the decision of the IRS.
Expected Individual Income Tax Deadline: July 15, 2020
- Massachusetts
“In the event the Internal Revenue Service (IRS) issues tax relief to taxpayers with federal filing obligations, DOR is prepared to follow the IRS in offering similar relief for taxpayers with Massachusetts tax filing obligations.”
Expected Individual Income Tax Deadline: July 15, 2020
- North Carolina
“The NCDOR is mirroring this payment extension to the greatest extent possible under current state law. While the NCDOR is waiving late payment penalties through July 15, state law prevents waiving any interest.”
Expected Individual Income Tax Deadline: July 15, 2020
- Oregon
“If the IRS declares the April 15th due date to be extended due to the COVID-19 pandemic, Oregon will automatically connect to those dates for personal income tax filers.”
Expected Individual Income Tax Deadline: July 15, 2020
- South Carolina
“Tax returns and payments due April 1 – June 1 will now be due June 1, 2020. Penalty and interest will not be charged if payment is made by June 1.”
Individual Income Tax Deadline: June 1, 2020
– Story provided by TaxingSubjects.com
by | Mar 20, 2020 | Tax Tips and News
Tax Day is now July 15!
Treasury Secretary Steven Mnuchin announced on Twitter that taxpayers now have an additional 90 days to file their tax returns.
On Tuesday, March 17, 2020, Mnuchin announced in the president’s coronavirus task force press conference that individuals owing up to $1 million and corporations owing up to $10 million would have an additional 90 days to pay their taxes. This latest announcement (March 20) sets both the filing and payment deadlines to the same day, removing any potential Tax Day confusion.
Mnuchin today wrote, “At @realDonaldTrump’s direction, we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.” One minute later, he echoed a recommendation from the Tuesday presser: “I encourage all taxpayers who may have tax refunds to file now to get your money.”
These latest delays are in direct response to concerns over COVID-19, the coronavirus outbreak that has led to school and business closures across the country. For the latest COVID-19 announcements, be sure to check the “Coronavirus Tax Relief” page on IRS.gov and the “How to Protect Yourself” page on CDC.gov.
Source: Twitter (@stevenmnuchin1)
– Story provided by TaxingSubjects.com
by | Mar 19, 2020 | Tax Tips and News
Taxpayers now have more time to PAY, but the deadline to FILE has not yet changed.
COVID-19 has disrupted daily life for taxpayers across the country. Whether due to school closures or businesses shutting down, change is the one thing that feels inevitable. In a Tuesday press conference held by President Trump’s coronavirus task force, Treasury Secretary Stephen Mnuchin outlined one more change: the tax payment deadline.
According to Mnuchin, individuals whose tax bill doesn’t exceed $1 million will have an additional 90 days to pay, and corporations can defer up to $10 million. He also assured that these deferred payments will be interest and penalty free. This development comes a week after the House Ways and Means Committee sent a letter to the IRS requesting a recommendation about delaying tax-related deadlines.
An important distinction to note is that the tax return filing deadline has not been changed. Taxpayers are still expected to file by the April 15 deadline. One potential reason for maintaining the current deadline could be that Treasury recognizes the importance of taxpayers receiving refunds—especially in light of many being forced to self-isolate.
“Most Americans will get tax refunds,” Mnuchin said, “and we don’t want you to lose out on those tax refunds, and we want to make sure you get them.” Indeed, the financial health of many taxpayers hinges on receiving a tax refund, so delaying that money while possibly being out of work for several weeks could could pose a significant financial hardship. Further, he recommended filing electronically to get any refunds owed as soon as possible.
All current information related to the impact of COVID-19 on the American tax system can be found on the IRS.gov “Coronavirus Tax Relief” webpage, which includes links to statements for the payment deadline extension, high-deductible plans being allowed to cover COVID-19 costs, and more.
Source: “Coronavirus Briefing”; “Payment Deadline Extended to July 15, 2020“
– Story provided by TaxingSubjects.com
Lloyd Bogner