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.
SSI And VA Recipients To Receive Automatic Payments
The IRS and Treasury, in partnership with the Social Security Administration and Department of Veterans Affairs have announced that recipients of Supplemental Security Income and VA benefits will automatically receive Economic Impact Payments. Most recipients need to take no action to receive payment, however, for those who have dependents age 16 or younger and did not file a tax return for 2018 or 2019, a special tool has been set up to register for the additional dependent payment. May 5 is the deadline to register for the additional payment.
Guidance For Cross-Border Travel Disruptions
The Treasury Department and IRS have issued guidance for individuals and businesses who have been impacted by travel disruptions caused by COVID-19 and the response. The guidance addresses situations where 60 consecutive days of residence would generally indicate tax residency, and explains certain income exclusions which will not be impacted as a result of days spent away from a foreign country.
Guidance For UBTI “Silo” Rules
Guidance has been issued for tax-exempt organizations that are subject to the unrelated business income tax with more than one unrelated trade or business on how to calculate their unrelated business taxable income (UBTI). The Tax Cuts and Jobs Act (TCJA) requires tax-exempt organizations subject to the UBTI tax to compute UBTI separately for each trade or business (referred to as a “silo”).
“Get My Payment” Program Enhanced
The IRS has significantly enhanced the “Get My Payment” online application this weekend. The changes are designed to help taxpayers have an improved and smoother experience, including access to adding direct deposit information. Taxpayers can check the status of their payment and if necessary, can add direct deposit information. Further improvements and enhancements will be ongoing.
The IRS is Not Accepting Paper Applications
Little Giant Tax Services are are here to help you with your tax filing throughout the next few months of stay at home orders. At this time, the IRS is not accepting physical returns. If you want to have one of our staff help you e-file your return, please call or email us.
Extensions Extended To Trusts, Estates, Corporations
The IRS recently extended the filing and payment deadline for most individual taxpayers to July 15, from April 15. Now they have extended that same relief to trusts, estates, corporations, and other non-corporate filers. Additionally, those with estimated tax payments typically due June 15, 2020 can wait until July 15 to make that payment, without penalty.
Registration Tool For Non-Filers
The Treasury and IRS have released a new tool for certain individuals to register to receive economic impact payments. Those who have not filed taxes for 2018 or 2019, and also did not receive Social Security payments or Railroad Retirement benefits will need to use the new web tool to register and input their information in order to receive payment. This may apply to individual and joint filers who do not make enough to file a tax return, but will not apply to students or others who are claimed as dependents on another tax return. A new tool is being built to check the status and expected date of all economic impact payments, and should be online by the end of this week.
Reschedule April 15 Payments Now
Taxpayers who have scheduled quarterly payments for April 15 have until midnight eastern time on the 13th to reschedule their payment for July 15, 2020. Those who have scheduled electronic funds transfer (EFT) or debit, credit, or digital wallet payments can reschedule those payments, but those adjustments must be made right away.
Reminder: Up-To-Date Coronavirus Tax Relief
The IRS is aggregating all pertinent tax information regarding Coronavirus tax relief in one central site. Whether you are a taxpayer, employer, small business owner, health plan administrator, or just wanting to know the latest deadline updates, you can find it here.