by | May 14, 2020 | Tax Tips and News
How many Economic Impact Payments have been issued?
Many Economic Impact Payment reporting deadlines are now fixed in the country’s rear-view mirror, and millions of Americans have started receiving payments from the US Treasury Department. That begs the question: Just how many people have received a CARES Act-authorized payment? The answer is found in a recent Internal Revenue Service press release that breaks down the figures by state.
The IRS announced that close to 130 million taxpayers have now received an Economic Impact Payment—up from the 88 million toward the end of April—bringing the total amount of money issued to more than $200 billion.
The five states that have received the most money in payments are California ($22 billion), Texas ($18 billion), Florida ($15 billion), New York ($12 billion), and Pennsylvania ($8 billion). South Dakota, North Dakota, Arkansas, Vermont, and Wyoming round out the bottom of the list, collectively receiving $2.5 billion dollars.
It’s worth noting that the IRS included taxpayers from the District of Columbia and those with foreign addresses in the final count. As of May 8, the agency said that 252,095 DC residents and 595,548 foreign address holding filers have received an EIP.
Will the Treasury issue more Economic Impact Payments?
While the IRS reminded Americans that those who recently filed a tax return and certain recipients of government benefits will have their EIP issued automatically, some non-filers may still need to provide the IRS with qualifying information to receive a payment.
“For those who don’t receive federal benefits and didn’t have a filing obligation in 2018 or 2019, the IRS continues to encourage them to visit the Non-Filer tool at IRS.gov so they can quickly register for Economic Impact Payments,” the IRS urged. “People can continue to receive their payment throughout the year.”
The IRS closed the release with a link to the Economic Impact Payments FAQ page, which answers common questions like the following:
- “Who is eligible?”
- “Who is not eligible?”
- “How much is it worth?”
- “Do I need to take action?”
To view current EIP statistics for all 50 states, visit IRS.gov.
Source: IR-2020-91
– Story provided by TaxingSubjects.com
by | May 12, 2020 | Tax Tips and News
The US Treasury Department has found a loophole in the stimulus payments sent out to individuals. Some of the recipients were actually deceased—and Treasury wants that money back.
Accounting Today magazine reports the government became aware in April when some people noticed that family members who had recently died still got the $1,200 Economic Impact Payments.
The federal government updates taxpayer rolls regularly, incorporating new data with death certificate information, but the magazine said the IRS was relying on data to process the payments that had been gathered as long ago as 2018.
The stimulus payments—$1,200 for each adult earning up to $75,000 and an additional $500 for each child under age 17—began showing up in bank accounts in April. Tens of millions of checks remain to be distributed.
When the program was announced, the IRS said those who received more money than they were due because of changes in income would not have to return the difference. It’s not known if those who fail to return dead relatives’ payments to the government would face legal action.
Accounting Today says the IRS and Treasury are planning to issue their guidance on the mistaken payments in a few days.
– Story provided by TaxingSubjects.com
by | May 10, 2020 | Tax Tips and News
The Internal Revenue Service is reminding employers who have been impacted by the Coronavirus pandemic that three new credits are available for them.
The first of these, the Employee Retention Credit, is intended to encourage businesses to keep employees on the payroll. The ERC is a refundable tax credit of 50% up to $10,000 in wages paid by an eligible employer whose business has been financially affected by COVID-19.
The credits available to all employers, regardless of size, and includes tax-exempt organizations. The IRS says there are only two exceptions to this credit: State and local governments and their instrumentalities, and small businesses who take small-business loans.
What are the qualifications for employers?
There are only two qualifications and employers have to meet one or the other:
- The employer’s business is fully or partially suspended by government order due to COVID-19 during the calendar quarter.
- The employer’s gross receipts are below 50% of the comparable quarter in 2019. Once the employer’s gross receipts go above 80% of a comparable quarter in 2019, they no longer qualify after the end of that quarter.
Employers will calculate these measures each calendar quarter.
What are the paid sick leave and family leave credits?
The paid sick leave credit is aimed at giving businesses a tax credit for an employee who is unable to work (including working from home) because of Coronavirus quarantine or self-quarantine. It also applies if the employee has Coronavirus symptoms and is seeking a medical diagnosis.
Those employees are entitled to paid sick leave for up to 10 days (up to 80 hours) at the employee’s regular rate of pay up to $511 per day and $5,110 in total.
Employees are also entitled to paid family and medical leave amounting to two-thirds of the employee’s regular pay, up to $200 per day and $10,000 in total. Up to 10 weeks of qualifying leave can be counted toward the family leave credit.
Businesses can be reimbursed immediately for the credit by reducing their required deposits of payroll taxes that have been withheld by the amount of the credit.
Eligible employers can immediately get a credit in the full amount of the required sick leave and family leave—plus related health plan expenses and the employer’s share of Medicare tax on the leave—for the period of April 1, 2020, through Dec. 31, 2020. The refundable credit is is applied against employment taxes on wages paid to all employees.
How do businesses get the Employee Retention Credit?
The IRS says getting the credit is as simple as reducing the required deposits of payroll taxes that have been withheld from workers’ wages. The reduction is made by the amount of the credit.
An IRS release has further details: “Eligible employers will report their total qualified wages and the related health insurance costs for each quarter on their quarterly employment tax returns or Form 941 beginning with the second quarter. If the employer’s employment tax deposits are not sufficient to cover the credit, the employer may receive an advance payment from the IRS by filing Form 7200, Advance Payment of Employer Credits Due to COVID-19.”
For more information about these credits, check out Employee Retention Credit FAQs and Paid Family Leave and Sick Leave FAQs, or the IRS fact sheet on the Employee Retention Credit.
– Story provided by TaxingSubjects.com
by | May 8, 2020 | Tax Tips and News
From mid- to late-March, the Tax Court cancelled a number of pending cases amid safety concerns stemming from the growing threat of the COVID-19 epidemic. Despite defendants no longer having their expected day in court, the orders suggested that all involved parties try to resolve those cases. This week, the Internal Revenue Service announced a remote solution for taxpayers without legal representation: “Virtual Settlement Days.”
Previously, Settlement Days have been in-person, volunteer-hosted events that provide unrepresented taxpayers access to resources like free tax advice, legal representation, and settlement opportunities—usually resulting in a settlement. “Those who ended up with a liability have been able to enter into an installment payment arrangement,” the IRS explained, highlighting how these events have helped taxpayers address their tax bill.
What are Virtual Settlement Days?
Virtual Settlement Days are remote tax clinics hosted by volunteer tax advisors and IRS staff that provide unrepresented taxpayers access to free tax advice and resolution services via a teleconferencing application. By meeting over the Internet, taxpayers can continue to observe stay-at-home orders while dealing with their Tax Court case.
How will unrepresented taxpayers attend Virtual Settlement Days?
Virtual Settlement Days will use Cisco’s WebEx teleconferencing application to remotely connect taxpayers with volunteer tax advisors. WebEx, like other remote meeting platforms, requires that users create an account and learn how to join meetings. To help address the potential learning curve, Cisco has a series of written and video guides on its Help Center page.
When will the Virtual Settlement Days events begin?
While this program could expand access to Low Income Taxpayer Clinics, the rollout is limited to a select number of taxpayers whose cases were cancelled in Detroit, MI, and Atlanta, GA. Initially planned as one-day events—May 9 in Detroit and May 21 in Atlanta—the IRS noted that these first Virtual Settlement Days “may be extended, if needed, to meet taxpayers’ needs.”
How will taxpayers know if their case has been selected for a Virtual Settlement Days?
According to the press release, the IRS is sending invitations to eligible taxpayers. The agency will give preference to unrepresented taxpayers whose cases were recently cancelled by the Tax Court, but they said they will also invite those who do not yet have a trial scheduled.
How long will the IRS support the Virtual Settlement Days program?
Interestingly, the IRS had been considering the addition of teleconferencing to Settlement Days before social distancing policies were widely implemented in the US. The agency noted that Chief Counsel had included remote-meeting recommendations in the January 2020 Settlement Days Best Practices; the coronavirus simply underscored the immediate need. As such, “Chief Counsel anticipates that Virtual Settlement Days will be a mainstay of its Settlement Day efforts even after the crisis is over.”
Source: IR-2020-87
– Story provided by TaxingSubjects.com
by | May 7, 2020 | Tax Tips and News
Some low-income Americans may need to report EIP-qualifying information to the IRS.
With the dependent-reporting deadline for non-filers who are automatically receiving their Economic Impact Payment passed, the Internal Revenue Service reminded low-income Americans who don’t normally file a tax return that they are probably eligible for a CARES Act-authorized payment.
While non-filers who receive certain government benefits will automatically receive an EIP, many low-income Americans who have not filed a tax return in the past two years will need to provide the IRS with EIP-qualifying information. To expedite the process, the IRS suggested they use the Non-Filers: Enter Payment Info Here tool on IRS.gov.
“The Non-Filers tool is for married couples with incomes below $24,400 or single people with income below $12,200,” the agency explained in the release. “This includes couples and individuals who are homeless. Usually, married couples qualify to receive $2,400 while single people qualify to get $1,200. People with dependents under 17 can get up to an additional $500 for each child.”
Before using Non-Filers: Enter Payment Info Here, the IRS says that users need to have some “basic information” handy. The “Non-Filers: Enter Payment Info Here” page on IRS.gov has a more complete list:
- Full name, current mailing address and an email address
- Date of birth and valid Social Security number
- Bank account number, type and routing number, if you have one
- Identity Protection Personal Identification Number (IP PIN) you received from the IRS earlier this year, if you have one
- Driver’s license or state-issued ID, if you have one
- For each qualifying child during 2019: name, Social Security number, or Adoption Taxpayer Identification Number and their relationship to you or your spouse
However, the IRS closed their press release by detailing who should not use the Non-Filers tool.
Don’t use Non-Filers: Enter Payment Info Here if you filed a tax year 2018 or 2019 return!
The IRS stressed that taxpayers who recently filed a return should not use Non-Filers: Enter Payment Info Here. Since the AGI listed on a tax return is generally how the agency determines eligibility for EIP, there is no need for filers to report that information again.
The IRS also noted that those who need to file a tax return to qualify for certain tax credits should not use the reporting tool. In those cases, the IRS says it’s better to just file a tax return.
Finally, Americans who have been claimed as a dependent by another filer are not be eligible to receive an Economic Impact Payment.
For more information about Economic Impact Payments, visit the Economic Impact Payment Information Center on IRS.gov.
Source: COVID Tax Tip 2020-51; “Non-Filers: Enter Payment Info Here”
– Story provided by TaxingSubjects.com
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