Tax Updates September 15

Deadlines and Disaster Extensions

The IRS is reminding people that third quarter estimated tax payments are due on September 15, 2021. This applies primarily to those who don’t have their taxes deducted from their paychecks by their employers. Self-employed, retirees, some investors, landlords, and others not subject to withholding fall into this category. Those impacted by recent disasters, like Hurricane Ida, in areas of New York and New Jersey, and Pennsylvania have until January 3, 2022 to pay their quarterly estimated taxes. Individuals and organizations who had valid extensions on their return will have the same January due date. Those affected by the same storm in Mississippi have until November 1, 2021 as their extension. Up-to-date disaster relief is always available on the IRS’ disaster relief page.

Guidance on Sick and Family Leave Wages

The IRS has issued guidance to employers about reporting the amount of qualified sick and family leave wages paid to employers for leave taken in 2021. Employers are required to report these amounts in Box 14 of Form W-2, or in a separate statement provided with the Form. The self-employed may also determine the amount of any sick and family leave equivalent credits they may claim. 

Home COVID-19 Testing Expenses Eligible

The IRS is reminding taxpayers that the cost of home testing for COVID-19 is an eligible medical expense that can be paid for under health flexible spending arrangements (Health FSAs), health savings accounts (HSAs), and other similar arrangements. Other personal protective equipment such as masks and hand sanitizer used to prevent the spread of COVID-19 are also eligible. 

Tax Credit for Employers Hiring

The IRS reminds employers that there is a valuable tax credit available to them for hiring certain workers. The Work Opportunity Tax Credit (WOTC) may be available to businesses that hire those who have been employed for at least 27 consecutive weeks – as long as they have received state or federal benefits during that time. Other qualified hires would be those formerly incarcerated, unemployed or disabled veterans, those receiving Temporary Assistance for Needy Families, Supplemental Nutrition Assistance Program, or Supplemental Security Income. A complete list of the designated groups and deadline information is available at the link.