Tag Archives: tax deadlines

Late September IRS Updates

Improperly Forgiven PPP Loans are Taxable

The IRS has released guidance addressing improper forgiveness of Paycheck Protection Program (PPP) loans. When a PPP loan is forgiven based upon misrepresentations or omissions, the taxpayer is not eligible to exclude the forgiven loan proceeds from taxable income. Taxpayers who inappropriately received PPP loan forgiveness are encouraged to file amended returns and come into compliance. 

September 30 Deadline for COVID Penalty Relief

The IRS reminds struggling individuals and businesses affected by the pandemic that they may qualify for late-filing penalty relief if they file their 2019 and 2020 returns by September 30, 2022. This aims to help not only taxpayers but to allow the IRS to focus resources on processing backlogged tax returns in an effort to return to normal operations for the 2023 filing season. The relief applies to the failure-to-file penalty, usually assessed at a rate of 5% per month, up to 25% of the unpaid tax, when a return is filed late.

Victim Relief Abounds

  • Victims of storms and flooding that began on September 15 in parts of Alaska now have until February 15, 2023, to file various individual and business tax returns and make tax payments. This applies to those in FEMA-designated areas, currently the Regional Education Attendance Areas of Bering Strait, Kashunamiut, Lower Kuskokwim and Lower Yukon. 
  • Hurricane Fiona victims in all 78 Puerto Rican municipalities also have until February 15, 2023, to file various returns and make payments. 
  • Farmers and ranchers in applicable regions forced to sell livestock because of drought conditions have more time to replace their livestock and defer tax on any gains from the forced sales. This includes parts of 44 states, and generally applies to gains realized on the sales of draft, dairy, or breeding livestock. Sales of other livestock held for slaughter or sport, or poultry, are not eligible. More information is available in Notice 2022-43.
  • Look for much of Florida to be offered relief shortly. Updated localities are always available on the disaster relief page of IRS.gov.
  • Employers using payroll service providers should ensure their provider has a fiduciary bond in place to protect the employer against a possible default. Using the Electronic Federal Tax Payment System (EFTPS) to make federal tax deposits and business tax payments makes it easy and convenient to pay the government even when disaster displaces employees and businesses. Any business can create an EFTPS account.

Reconstructing records after a disaster may be required for tax or insurance purposes or getting federal assistance. For more information, visit National Preparedness Month.

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.