Natural Disaster Relief

Victims of recent disasters have had many deadlines extended to December 15, 2020. This includes many individual and business tax returns and tax payments normally due in September, October, and November. The extensions have been granted to those living in FEMA-designated disaster zones, including parts of Iowa affected by the August 10 derecho storm, and those affected by wildfires in California. Hurricane affected areas are being added; the IRS’ disaster relief page provides a current list of designated areas. No action is needed for qualified taxpayers to take advantage of this relief.

Economic Impact Payment Catchup 

Some 50,000 spouses will receive their economic impact payment in the form of a check. In some cases, an individual’s payment was redirected to pay their husband’s or wife’s child support debt. Those who filed Form 8379, Injured Spouse Allocation with a recent tax return will receive their check in early- to mid-September. Those who have not filed Form 8379 will still receive their EIP check, but it is not yet known when to expect it. No action is required in either case.

Interest To Be Paid To Millions of Taxpayers

Individual taxpayers who filed their return by July 15 and were due a refund will receive an interest payment along with it. This applies to those who have received refunds in the past three months, or who are still waiting on their refunds. The interest is calculated from the original filing due date of April 15, and will be direct-deposited with the refund for those who use direct-deposit. Paper checks will be issued to others. Additionally, the interest is considered taxable income and recipients will receive a Form 1099-INT early next year. 

Guidance For Presidential Payroll Tax Memorandum

The IRS and Treasury Department have issued guidance implementing the August 8 Presidential Memorandum allowing employers to defer withholding and payment of an employee’s share of Social Security tax. The deferral generally applies to wages paid from September 1, 2020 through December 31, 2020, and only if the wages total less than $4,000 during a bi-weekly pay period.