Tax changes and IRS info from the stimulus package

[Jazzmammal]

Some here know I'm a tax pro, specifically an Enrolled Agent. I just got this email from NAEA. I'm only posting the part I think might interest some people here. It goes into the depths of this package in way more detail than you'll ever see in the news. I know some here run small businesses or have authority in a small business. There are changes to retirement distributions penalty abatements, charity contributions, filing dates, NOL carryover/carrybacks and a whole ton of information that I think some here could use. If anybody has any questions feel free to post them in this thread or PM me.

 

Congress Cares ...

 

Late Wednesday night, the Senate passed in a 96-0 vote the $2 trillion (yes, with a 't') Coronavirus Aid, Relief, and Economic Recovery Act (Cares Act) and then adjourned until April 20. The House is expected to pass the bill sometime today, without necessitating the full chamber assembling to vote, barring any procedural hiccups.

 

The CARES Act includes 14 new tax provisions as well as additional IRS funding for operations and implementation ($293.5 million for taxpayer service; $170 million for operations support; $37.2 million for enforcement). The statutory language is here, and a summary of the tax and unemployment insurance provisions are here. Here is what we see as the most important tax elements:

 

Individual Provisions

 

§2201. 2020 Recovery Rebates for Individuals

 

Recovery rebate for each taxpayer of $1,200 ($2,400 for joint returns).

Plus $500 for every qualifying child.

Rebates are means tested and begin phasing out after $75,000 adjusted gross income (AGI) (single), $112,500, (HoH), and $150,000 (MFJ).

The rebate amount is reduced by $5 for each $100 a taxpayer"s income exceeds the phase-out threshold and completely phased-out at $99,000/$198,000 (single/MFJ).

No payment without proper tax identification numbers.

IRS will base these amounts on the taxpayer"s 2019 tax return

2018 tax return if 2019 not yet filed

If no filing for either year, then based on information provided by Form SSA-1099 or RRB-1099, 2019 Social Security Benefit Statement

The Department of Treasury is required to conduct a public awareness campaign.

 

§2202. Special Rules for Use of Retirement Funds

 

Waiver for the 10-percent early withdrawal penalty for distributions up to $100,000.

Coronavirus-related distributions may be

repaid any time during the three years from distribution.

included in gross income ratably over three-taxable-year period.

Loan limit increased from $50,000 to $100,000.

 

Sections 2203, 2204, 2206. RMDs; Non-Itemized Charitable; Employer-Paid Education Loans

 

Minimum distribution rules for certain retirement plans and accounts are waived for 2020.

A $300 deduction for cash contributions allowed for taxpayers not itemizing beginning in 2020.

An employer payment of any qualifying education loan is excluded from income.

 

§2205. Modification of Limitations on Charitable Contributions During 2020

 

For individuals, the 50-percent of adjusted gross income limitation is suspended for 2020.

For corporations, the 10-percent limitation is increased to 25 percent of taxable income.

The limitation on deductions for contributions of food inventory from 15 percent to 25 percent.

 

Business Provisions

 

§2301. Employee Retention Credit for Employers Subject to Closure Due to COVID-19

 

All eligible employers are permitted to claim a 50 percent credit against wages paid.

Credit provided for first $10,000 of compensation, including health benefits, paid to an eligible employee.

The credit offsets employment taxes otherwise paid during a calendar quarter (reduced by any other credits used) with any excess refundable by the federal government.

Employer is eligible if operations fully or partially suspended during a calendar quarter due to a government order or gross receipts for a calendar quarter are less than 50 percent of gross receipts from the same quarter in the prior year (ending when they are 80 percent).

Credit is based on qualified wages paid to the employee.

If greater than 100 full-time employees, qualified wages are wages paid to employees when they are not providing services due to the COVID-19-related circumstances.

If eligible employers with 100 or fewer full-time employees, all employee wages qualify for the credit, whether the employer is open for business or subject to a shut-down order.

The credit applies to tax-exempt organizations.

 

§2302. Delay of Payment of Employer Payroll Taxes

 

Corporations may postpone employer payroll taxes (Sections 3111(a), 3211(a), and 3221(a)).

50 percent of social security taxes for the self-employed may be postponed.

50 percent of deferred taxes are due by December 31, 2021; the remainder due by December 31, 2022.

The Social Security trust funds are held harmless under this provision.

 

Sections 2303, 2304. Modifications for Net Operating Losses

 

Temporarily removes the taxable income limitation to allow a net operating loss (NOL) to fully offset income.

Losses from 2018, 2019, or 2020 may be carried back five years.

 

§2304. Modification of Limitation on Losses for Taxpayers Other than Corporations

 

The provision modifies the loss limitation applicable to pass-through businesses and sole proprietors, so they can benefit from the NOL carryback rules.

 

In a word: Yowza. In two words: (with apologies to Rocky Horror) Great Scott! We have seen a lot: TCJA, the 2008 market meltdown, 9/11, but to move from nothing to $2 trillion in the space of a weekâ¦it just leaves us slack-jawed.

 

I'll say it does. I'll be busy for a month figuring out how to apply this to some of my clients.

 

Bob

[timwat]

Bob -

 

Thank you for posting this. I'm very very interested in this - staggering stuff and so glad you've shared this here.

 

Tim

[Jazz+]

What about self employed unemployment payments? Particularly self employed who didn't pay into your state's unemployment fund.

 

https://www.akingump.com/en/experience/industries/national-security/covid-19-resource-center/cares-act-summary-employees-unemployment-insurance-and-assistance-to-state-and-local-governments.html

"Expanded Unemployment Insurance Benefits

The Act provides for federal unemployment assistance to individuals directly and indirectly affected by COVID-19, including individuals who are not typically eligible for unemployment assistance such as independent contractors, self-employed and those with limited work histories. Individuals who are able to telework with pay and who are receiving paid sick leave or other paid benefits are not eligible for assistance under the Act.

Coverage is extended to individuals who (i) have been diagnosed with COVID-19 or experiencing symptoms and seeking a diagnosis; (ii) have a family member with COVID-19; and who, as a result of COVID-19, (iii) have a child who is unable to attend school; (iv) are unable to reach work because of a quarantine imposed; (v) are unable to attend work because they have been advised by a health care worker to self-quarantine; (vi) were scheduled to begin work but no longer have a job or are unable to reach work; (vii) have become the head of household or breadwinner; (viii) are forced to quit their job; and (iv) have their place of employment closed.

Assistance is available to covered individuals for weeks of full unemployment, partial unemployment or inability to work from January 27, 2020 to December 30, 2020, for up to 39 weeks. The Act provides for weekly benefits of $600 (fully funded by the federal government), in addition to the weekly benefit amount authorized under state law, and incentivizes states to waive the week-long waiting period for the initial receipt of benefits. The Act also provides for up to 13 weeks of emergency unemployment benefits for eligible individuals who have exhausted the 39 weeks of benefits and remain unemployed."

[Jazz+]

https://www.careeronestop.org/LocalHelp/UnemploymentBenefits/Find-Unemployment-Benefits.aspx?newsearch=true

 

"COVID-19 (Coronavirus) update: The federal government is allowing new options for states to amend their laws to provide unemployment insurance benefits related to COVID-19. For example, federal law allows states to pay benefits where:

An employer temporarily ceases operations due to COVID-19, preventing employees from coming to work;

An individual is quarantined with the expectation of returning to work after the quarantine is over; and

An individual leaves employment due to a risk of exposure or infection or to care for a family member.

In addition, federal law does not require an employee to quit in order to receive benefits due to the impact of COVID-19.

 

Select your state below to find details on their UI program, including and additional flexibility offered to those impacted by coronavirus. Many states require you to file for unemployment benefits on the web. Some provide toll-free numbers or other ways to obtain assistance in filing."

[Jazzmammal]

What I posted is focused on the tax side of this only to aid tax pros to advise clients and prepare their tax returns. Things like who qualifies for UI bene's is not my specialty although the question about self employed qualifying for this seems correct to me. UI has always been taxable and I don't see anything here that changes that which is why the NAEA article didn't address that because there's nothing new. The other thing is this is just the Act itself, the IRS still has to issue regulations in the form of Pubs and Revenue Procedures instructing us how to apply these code sections under various scenarios. That's professionally known as the devil in the details and there could be surprises. Stay tuned there will be more to come but this is for preparing taxes next year, I posted this as a heads up to aid people in planning. The immediate thing that concerns everybody is when will I get some money and how much will I get. That's a separate issue and that article from the law firm handled that pretty good so thanks for posting that one Jazz+.

 

I didn't know any of this because I learned years ago to not pay attention to Congressional debates about proposed legislation and news reports. It's all noise until a bill is actually signed into law. Then we have something to talk about.

 

Bob

[Jazzmammal]

Just got this from the IRS:

 

Everybody knows the first two paragraphs but the rest I didn't know. Things like how to get them your bank info if they don't already have it so the payment can be deposited and the biggie is if you're a person who has had no need to file a return like you're on Social Security with low enough income you don't have a filing requirement, you need to file a simple return in order to get the money. I've been wondering about that. Also, there is possible gotcha and that is if you've moved since you filed your last return, and did not put the direct deposit info on that return. In that case they'll send a check to your last known address and you're not there. If the Post Office doesn't forward it to you it will get returned to them. File right now so they have your current address.

 

Who is eligible for the economic impact payment?

 

Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible.

 

Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples. Parents also receive $500 for each qualifying child.

 

How will the IRS know where to send my payment?

 

The vast majority of people do not need to take any action. The IRS will calculate and automatically send the economic impact payment to those eligible.

 

For people who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. The economic impact payment will be deposited directly into the same banking account reflected on the return filed.

 

The IRS does not have my direct deposit information. What can I do?

In the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail.

 

I am not typically required to file a tax return. Can I still receive my payment?

Yes. People who typically do not file a tax return will need to file a simple tax return to receive an economic impact payment. Low-income taxpayers, senior citizens, Social Security recipients, some veterans and individuals with disabilities who are otherwise not required to file a tax return will not owe tax.

 

How can I file the tax return needed to receive my economic impact payment?

IRS.gov/coronavirus will soon provide information instructing people in these groups on how to file a 2019 tax return with simple, but necessary, information including their filing status, number of dependents and direct deposit bank account information.

 

I have not filed my tax return for 2018 or 2019. Can I still receive an economic impact payment?

Yes. The IRS urges anyone with a tax filing obligation who has not yet filed a tax return for 2018 or 2019 to file as soon as they can to receive an economic impact payment. Taxpayers should include direct deposit banking information on the return.

 

I need to file a tax return. How long are the economic impact payments available?

For those concerned about visiting a tax professional or local community organization in person to get help with a tax return, these economic impact payments will be available throughout the rest of 2020.

 

Where can I get more information?

The IRS will post all key information on IRS.gov/coronavirus as soon as it becomes available.

 

One final thing, the IRS has now closed all the help desks including the one tax pros use called the Practitioner Hotline. If we have any issues with them concerning back taxes, audits or whatever we're all locked out for now. I've not been able to find out how that works concerning them doing Collection activities like liens and levy's. I'm "assuming" they've put all that on hold but I've not confirmed that. Audits are still going on because I just talked to an auditor for 2 1/2 hours yesterday. I asked about this and he didn't know either. A serious one is a Notice of Deficiency also known as a 90 day letter. That gives you 90 days to file a Tax Court petition which is very important to protect your rights if you owe money and want to dispute it. I haven't heard anything about those.

 

This situation is very fluid so if anybody here is having these issues pay attention to the IRS website if you're handling it yourself.

 

Bob

[Jazzmammal]

Ha! I no sooner mention about how will the IRS be handling Collections and other things when I just got this email link five minutes ago:

 

IRS Accepting Email and Digital Signatures

 

I really hope they continue with this after this virus has settled down. They've always required original signatures on everything which can be a total PIA sometimes.

 

Bob

[Jazzmammal]

Here's a clarification on this important point:

 

I am not typically required to file a tax return. Can I still receive my payment?

Yes. People who typically do not file a tax return will need to file a simple tax return to receive an economic impact payment. Low-income taxpayers, senior citizens, Social Security recipients, some veterans and individuals with disabilities who are otherwise not required to file a tax return will not owe tax.

 

The IRS tweeted last night that this does not apply to Social Security recipients which I think is a good thing. We don't need a bunch of seniors who've not used a computer in years having to figure out how to file a tax return. I've not heard anything about everybody else though. If you're a low income person NOT on SS who hasn't filed prior to 2018, you'll need to catch up. Per my previous post IRS will be setting up a website that explains exactly what a "simple" return is. I assume it's not a regular 1040 or they would have said that so stay tuned.

 

Bob

[Docbop]

Here's a clarification on this important point:

 

I am not typically required to file a tax return. Can I still receive my payment?

Yes. People who typically do not file a tax return will need to file a simple tax return to receive an economic impact payment. Low-income taxpayers, senior citizens, Social Security recipients, some veterans and individuals with disabilities who are otherwise not required to file a tax return will not owe tax.

 

The IRS tweeted last night that this does not apply to Social Security recipients which I think is a good thing. We don't need a bunch of seniors who've not used a computer in years having to figure out how to file a tax return. I've not heard anything about everybody else though. If you're a low income person NOT on SS who hasn't filed prior to 2018, you'll need to catch up. Per my previous post IRS will be setting up a website that explains exactly what a "simple" return is. I assume it's not a regular 1040 or they would have said that so stay tuned.

 

Bob

 

 

That's good news I haven't had to file for a few years now. I go to H&R Block and they look at my 1099's and SSI and say you can skip it, they don't even charge me, but I tip them for checking for me.

[Jazzmammal]

Things are moving fast, it's hard to keep up. Some very good news for self-employed with no employees. The SBA Payroll Protection Program also includes Sch C filers meaning a lot of us on this forum! YouTube now has a bunch of vids about this. I found this one done by a CPA:

 

[video:youtube]

 

The application process has been delayed for a week so there is time to find more details about this. This vid explains it pretty well but still near the end he says it's not clear if they're using gross income or net income on Sch C and there is a lot involved in proving income if it's not all coming from 1099's. But the answer to the basic question, can a self employed person with no employees filing a Sch C qualify for this forgivable loan, the answer is yes. I'll be looking into this myself for my tax business.

 

EDIT

 

I just watched two more of his vids. He is more credible than I thought because he is one of the major CPE presenters nationwide. His course may be one that I'll wind up taking for part of my CPE credits this year. He said his course will be ready May 1.

 

This is very deep and I'm not going to even try to get into it on this forum but I'll say this about one vid I just finished. There is a big difference between initially getting a loan then later on qualifying for the forgiveness part. They are two different things and the forgiveness is not based on what happened in the past, it's based on what happened between Feb 15 and June 30, 2020. This means we won't exactly know how much will be forgiven and some of it or all of it may need to be paid back, there's a lot of detail in the new law.

 

If anybody here wants to look into this consult a local tax professional about it.

 

Bob

[Jazzmammal]

I just got this from the IRS E Alert system:

 

1. Economic Impact Payments: More information; graphics available to share with clients, others

 

The Treasury Department and the IRS announced this week that distribution of Economic Impact Payments will begin in the next three weeks and will be distributed automatically, with no action required for most people. More information on these payments, as well as other relief pertaining to COVID-19, will be posted to IRS.gov/coronavirus as it becomes available.

 

Share information: In addition, the IRS is creating special informational graphics about the Economic Impact Payments that can be shared with your clients or posted on your website. These graphics include details about who qualifies for the $1,200 payments. The first graphic is available at IRS.gov/coronavirus and additional ones will be available soon. Please share these to help taxpayers understand important details about these payments.

 

2. Scam alert: Schemes related to coronavirus and Economic Impact Payments

 

The IRS is urging everyone to be on the lookout for calls and email phishing attempts about the coronavirus, or COVID-19. These contacts can lead to tax-related fraud and identity theft. Taxpayers should watch not only for emails but text messages, websites and social media attempts that request money or personal information.

 

"History has shown that criminals take every opportunity to perpetrate a fraud on unsuspecting victims, especially when a group of people is vulnerable or in a state of need," said IRS Criminal Investigation Chief Don Fort. "While you are waiting to hear about your Economic Impact Payment, criminals are working hard to trick you into getting their hands on it. The IRS Criminal Investigation Division is working hard to find these scammers and shut them down, but in the meantime, we ask people to remain vigilant."

 

For some reason when I copy/paste from these emails the links don't show as active but you should be able to copy them into your browser if you want to see more info. The last thing concerning scammers is very important, those **(%^#! never stop.

 

Bob

[Dave Bryce]

Really useful information from brother Bob.

 

With his permission, I moved this thread to SSS from The Keyboard Corner forum.

 

dB

[Nowarezman]

There are lots of details to be worked out, no question.

 

As far as the SBA loans go, the only thing to do is apply asap and see what SBA does. The amount of money allocated to SBA loans as part of the virus legislation has a limit. So it'll be first come first served.

 

So far, the program looks quite inclusive - i.e. self-employeds are included.

 

Try to find a participating lender with a face and a person to actually talk to. Your paperwork might not be filled out just so, and you need someone who can help, not just some remote outfit that will reject an application because some "i" wasn't dotted.

 

However, if there is no such place you can find, then just do your homework quickly, get it submitted before the money is all gone.

 

Get the basics from here:

 

Payroll Protection Program Fact Sheet (from Treasury website)

 

nat

[Anderton]

Thanks for posting this information...a lot to digest!

[Nowarezman]

I should be more explicit about the SBA program - if you are a self-employed person with no employees at all, you might still be able to get an SBA loan via the "Payroll Protection Program".

 

And - this is a biggie - in many cases the loan will be FORGIVEN in which case, free money, not taxable. But do your homework, make the application out very carefully, get pro-level help if you need it, and move quickly.

 

And......don't lie on the paperwork, please. For your and everyone else's benefit -

 

nat

[Jazzmammal]

Good points and watch more vids about this, it's changing daily I think.

 

Now, here's a really important point about the $1,200 stimulus payments we're all going to get (most of us anyway} I just realized this yesterday as I was about to pull the trigger on a client's return and get it efiled. Remember, the IRS will take your 2018 return and give you the payment off of that if your 2019 return isn't filed yet and now we all have until July 15 to file it! That means if your situation changed enough between 2018 and 2019 you may screw yourself out of $1,200 if you file 2019 right now and if you're married it could be $2,400. Example, I almost pulled the trigger on a client yesterday and efiled his return but I suddenly realized he got divorced in 2019 and is now filing single. I checked his AGI for 18 and it was 138K. For 2019 as single his AGI is 114K. Married joint filers can make up to 150K and single filers up to 75K so guess what? DO NOT file 2019, let the IRS pay him the stimulus based on 18! Damn, I was right on the efile page in my tax program and all I had to do was check a box and hit enter when I realized this.

 

There a lot of different scenarios here. If you have dependent children you get $500 for each child. Maybe the kid turned 17 last year and didn't enroll in college so you can no longer claim him for 19 but you did for 18. That's $500 and another reason to hold off on filing 19.

 

Make sure you check those differences from 18 to 19 to make sure you're not about to make the same mistake I almost did. I would really hate to explain that to my client if he caught that after it was filed and called me to ask about it. DUH!! Sorry, I'm a dummy! Not a great phone call.

 

Bob

[Notes_Norton]

Thanks for the good info, Bob.

 

Your expertise and advice is always appreciated.

 

It's a shame that the criminals take advantage of people in times like this, so the warning to be alert is well received. I've nuked a few phishing attempts already. Keep your guard up everybody.

 

I did finally get through to Florida Unemployment after umpteen crashes and delays. Nobody could have been prepared for the number of people wanting to use the software at the same time. It'll take a couple of weeks to find out if I get some additional FL unemployment, and that should also qualify me for the $600/wk from the congress passed relief bill.

 

Whatever I get will be appreciated.

 

We're staying at home writing more Band-in-a-Box software and hope to have a release in a month. We've been working on this in our spare time for over a year now, but now we seem to have a lot of spare time, so we're putting about 12 hours a day towards it. It's creative and enjoyable, even if often frustrating. But when the frustration is over and it works like we wanted, the satisfaction overrides the hassles.

 

Of course, being locked up with my wife 24/7 is pure delight.

 

Thanks again Bob, keep them coming.

 

Notes

[Jazzmammal]

Just got an email from Drake Software. They now have the ability to create an Economic Impact Payment (EIP) return. I just checked the IRS website and nothing is up there yet but it's got be imminent. I'll post it as soon as I see it or if I get too busy anybody here can post it. It's important to get that in asap. There's millions of low income people and some on this forum who are not on SS who haven't filed in years. They need this money and the IRS has to have their updated information in order to get it.

 

Here is the info someone will need per Drake, but again this is just the software I happen to use but it should be very similar regardless of what software it is:

 

Filing an EIP Return

 

1. From the taxpayer's return, screen 1:

 

Select Filing Status.

Mark the "Economic Impact Payment (EIP) ONLY" box.

Complete the taxpayer's (and spouse's, if applicable) Social Security Number, name, date of birth, and address.

Note: Only taxpayers with a Social Security Number will receive an EIP. Most spouses must have a Social Security Number. If the spouse has an ITIN and is the spouse of an active member of the US military, an EIP can be claimed by checking the box for "EIP Military Spouse with ITIN".

If applicable, check the box for "Dependent of another."

 

2. Only dependents under the age of 17 who have a Social Security Number can be included on an EIP return. If the taxpayer is qualified to claim dependents, go to screen 2 and complete each dependent's:

 

Name

Social Security Number

Relationship

Months in home

Date of birth

IP PIN, if applicable

 

3. On screen DD, enter the taxpayer's bank account information in the "Account #1" section. The entire payment must go into one bank account.

4. Complete screens IDS and PIN. Include IP PINs for taxpayer and spouse, if applicable.

 

IDS is drivers license or other identify card info but if you don't have either of those you should be able to check a box saying that.

 

IP PIN is for people were were victims of identity theft who were issued a PIN by the IRS.

 

People should be able to do this themselves at no cost. I'm sure TurboTax will have this ready to go very soon if they haven't already, there are other online resources plus the IRS themselves will have this up any minute now and you should be able to do it on their website too.

 

Bob

[Jazzmammal]

Here's the latest video from JJ the CPA this morning concerning the PPP, self employed, SBA, federal unemployment and other info. Note the problem with some banks concerning these loans, I already got a call on that from a client. When he shows the links to forms on the IRS and SBA's websites, notice the fields on the forms are highlighted in light blue. Those are active fields you can fill in on screen using your computer keyboard, just put your mouse cursor on a blue field and start typing.. You then save the file as a pdf and print it out.

 

[video:youtube]

 

Bob

[dboomer]

If you are self employed you should go sign up here:

 

Covid19relief.sba.gov

[Jazzmammal]

Finally, here is the info page for non filers to do an EIP return:

 

https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here

 

Bob

[Jazzmammal]

Still no webpage showing where someone who files returns but either always owed or never put in their bank info for a Direct Deposit. Here's the IRS link that doesn't say much that's new other than they should have that bank info page ready by April 17.

 

https://www.irs.gov/newsroom/treasury-irs-launch-new-tool-to-help-non-filers-register-for-economic-impact-payments.

 

Bob

[Jazzmammal]

The webpage is now up for people who only need to update or add Direct Deposit banking information. If you're a non-filer you still need to use the EIP page.

 

https://www.irs.gov/coronavirus/economic-impact-payments

 

This time the bank info section is on the left. This just came out a few hours ago and it's jammed up right now. I would give it a day or two.

 

Remember, if you're collecting Social Security regardless of which camp you fall into, you're getting the payments through the SS info so you don't have to do anything.

 

EDIT

 

Man, so many little tweaks with these Stimulus Payments. I just got another email that in part says this regarding SSI recipients vs regular Social Security recipients:

 

 

 

WASHINGTON â The Internal Revenue Service, working in partnership with the Treasury Department and the Social Security Administration, announced today that recipients of Supplemental Security Income (SSI) will automatically receive automatic Economic Impact Payments.

 

SSI recipients will receive a $1,200 Economic Impact Payment with no further action needed on their part. The IRS projects the payments for this group will go out no later than early May.

 

Moving SSI recipients into the automatic payment category follows weeks of extensive cooperative work between SSA, Treasury, IRS as well as the Bureau of Fiscal Services.

 

'Since SSI recipients typically aren"t required to file tax returns, the IRS had to work extensively with these other government agencies to determine a way to quickly and accurately deliver Economic Impact Payments to this group,' said IRS Commissioner Chuck Rettig. 'Additional programming work remains, but this step simplifies the process for SSI recipients to quickly and easily receive these $1,200 payments automatically. We appreciate the assistance of SSA and the Bureau of Fiscal Services in this effort.'

 

As a tax guy all I see when a client receives either regular SS or SSI is the same form, The Social Security Benefits Statement. I had no idea that behind the scenes they are handled differently. So, yes SS recipients are starting to get their money now while SSI recipients can take a little longer.

 

Bob

[Jazzmammal]

Another update regarding SSI and VA benefits recipients who have dependent children:

 

Special alert for VA, SSI recipients who don"t file a tax return and have dependents

 

VA, SSI recipients with eligible children need to act by May 5 to quickly add money to their automatic Economic Impact Payment; 'Plus $500 Push" continues

 

WASHINGTON â The Internal Revenue Service today issued a special alert for Supplemental Security Income and Department of Veterans Affairs beneficiaries to act by May 5 if they didn"t file a tax return in 2018 or 2019 and have dependents so they can quickly receive the full amount of their Economic Impact Payment.

 

Their $1,200 payments will be issued soon and, in order to add the $500 per eligible child amount to these payments, the IRS needs the dependent information before the payments are issued. Otherwise, their payment at this time will be $1,200 and, by law, the additional $500 per eligible child amount will be paid in association with a return filing for tax year 2020.

 

'We want to 'Plus $500" these groups so they can get their maximum Economic Impact Payment of $1,200 and their $500 for each eligible child as quickly as possible,' said IRS Commissioner Chuck Rettig. 'They"ll get $1,200 automatically, but they need to act quickly and use the Non-Filers tool on IRS.gov to get the extra $500 per child added to their payment. Everyone should share this information widely and help others with the Plus $500 Push, so that more Americans get more money as fast as possible.'

 

I see they extended this from last Wednesday.

 

Bob

[Jazzmammal]

This is expanded info I just got to add to yesterday's post. We're getting into the weeds now concerning certain specific situations but if this applies to anyone here this should help in understanding how to get your stimulus payment. If anyone needs some clarification just PM me. The vast majority of people have gotten their money already.

 

People in this group who have qualifying children under age 17 can claim the additional $500 per qualifying child and will need to provide their child"s information to the IRS using the Non-Filers: Enter Payment Info Here tool before May 5. Individuals who are married must also provide additional information using the Non-Filer tool to claim the full $2,400 payment if their spouse didn"t receive SSA, SSDI, RRB, SSI or VA benefits in 2019 and didn"t have to file a tax return in the last two years.

 

A qualifying child is someone who:

 

Is the child, stepchild, eligible foster child, sibling, half sibling, step sibling or a descendant of the individual. A descendant includes children like a grandchild, niece or nephew.

Can be claimed as a dependent on the taxpayer"s tax return. For those who don"t usually file a tax return, include the child"s information in the Non-Filers: Enter Your Payment Info Here tool before May 5.

Was younger than 17 at the end of the 2019 tax year.

Is a U.S. citizen, U.S. national, or U.S. resident alien.

Has a valid Social Security number or an adoption taxpayer identification number.

 

Some people have older dependents. This includes people like an individual"s parent or a college student. Here are a couple things to know about dependents 17 or older:

 

Individuals with dependents 17 and older won"t get more money for those dependents.

The person claimed as a dependent on another person"s tax return isn"t eligible for the $1,200 Economic Impact Payment.

 

In addition to those receiving SSI and VA recipients who receive Compensation and Pension (C&P) benefit, payments are also automatic for people who don"t normally file a tax return but receive certain payments. These payments are:

 

Social Security benefits for retirement,

Social Security Disability insurance

Survivor benefits

Railroad Retirement benefits

 

Bob

[Jazzmammal]

Finally, something new. There have been some complaints and comments concerning people who have gotten their stimulus checks and didn't deserve them. The IRS just issued guidance showing how to return the money:

 

More About the Economic Impact Payment

 

Q41. What should I do to return an Economic Impact Payment (EIP)? (added May 6, 2020)

 

A41. You should return the payment as described below.

 

If the payment was a paper check:

 

Write "Void" in the endorsement section on the back of the check.

Mail the voided Treasury check immediately to the appropriate IRS location listed below.

Don't staple, bend, or paper clip the check.

Include a note stating the reason for returning the check.

 

If the payment was a paper check and you have cashed it, or if the payment was a direct deposit:

 

Submit a personal check, money order, etc., immediately to the appropriate IRS location listed below.

Write on the check/money order made payable to 'U.S. Treasury' and write 2020EIP, and the taxpayer identification number (social security number, or individual taxpayer identification number) of the recipient of the check.

Include a brief explanation of the reason for returning the EIP.

 

Following this is a list of all the IRS mailing addresses by state that I'm not going to post. If this applies to anyone here they can easily Google the correct address. If people don't do this I'm sure the IRS will contact them once all this is over.

 

Bob

[Jazzmammal]

Something new for small business that just came out today:

 

Issue Number: COVID Tax Tip 2020-53

 

COVID-19 paid leave tax credits for small and midsize businesses

 

Small and midsize employers can claim two new refundable payroll tax credits. The paid sick leave credit and the paid family leave credit are designed to immediately and fully reimburse eligible employers for the cost of providing COVID-19 related leave to their employees.

 

Here are some key things to know about these credits.

 

Coverage

⢠Employers receive 100% reimbursement for required paid leave.

⢠Health insurance costs are also included in the credit.

⢠Employers do not owe their share of social security tax on the paid leave and get a credit for their share of Medicare tax on the paid leave.

⢠Self-employed individuals receive an equivalent credit.

 

Fast funds

⢠Reimbursement will be quick and easy.

⢠The credit provides a dollar-for-dollar tax offset against the employer"s payroll taxes

⢠The IRS will send any refunds owed as quickly as possible.

 

To take immediate advantage of the paid leave credits, businesses should use funds they would otherwise pay to the IRS in payroll taxes. If those amounts are not enough to cover the cost of paid leave, employers can request an expedited advance from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19.

 

For details about these credits and other relief, visit Coronavirus Tax Relief on IRS.gov.

 

Bob

[Jazzmammal]

Here is the latest IRS update concerning stimulus payments for those who haven't gotten theirs yet:

 

May 8, 2020

 

Act by Wednesday for chance to get quicker Economic Impact Payment; timeline for payments continues to accelerate

 

WASHINGTON â With a variety of steps underway to speed Economic Impact Payments, the Treasury Department and the Internal Revenue Service urged people to use Get My Payment by noon Wednesday, May 13, for a chance to get a quicker delivery.

 

The IRS, working in partnership with Treasury Department and the Bureau of Fiscal Services (BFS), continues to accelerate work to get Economic Impact Payments to even more people as soon as possible. Approximately 130 million individuals have already received payments worth more than $200 billion in the program"s first four weeks.

 

Starting later this month, the number of paper checks being delivered to taxpayers will sharply increase. For many taxpayers, the last chance to obtain a direct deposit of their Economic Impact Payment rather than receive a paper check is coming soon. People should visit Get My Payment on IRS.gov by noon Wednesday, May 13, to check on their payment status and, when available, provide their direct deposit information.

 

'We"re working hard to get more payments quickly to taxpayers,' said IRS Commissioner Chuck Rettig. 'We want people to visit Get My Payment before the noon Wednesday deadline so they can provide their direct deposit information. Time is running out for a chance to get these payments several weeks earlier through direct deposit.'

 

After noon Wednesday, the IRS will begin preparing millions of files to send to BFS for paper checks that will begin arriving through late May and into June. Taxpayers who use Get My Payment before that cut-off can still take advantage of entering direct deposit information.

 

How Get My Payment works

 

The Get My Payment tool provides eligible taxpayers with a projected Economic Impact Payment deposit date. The information is updated once daily, usually overnight. There is no need to check more than once a day. Taxpayers who did not choose direct deposit on their last tax return can use this tool to input bank account information to receive their payment by direct deposit, expediting receipt.

 

Non-Filers portal remains available

 

For those not required to file a federal tax return, the Non-Filers: Enter Payment Info Here tool helps them submit basic information to receive an Economic Impact Payment quickly to their bank account. Developed in partnership between the IRS and the Free File Alliance, this tool provides a free and easy option for those who don"t receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, Supplemental Security Income (SSI) and VA Compensation and Pension (C&P) benefits. The Non-filers tool is also available in Spanish.

 

Eligible taxpayers who filed tax returns for 2019 or 2018 will receive the payments automatically. Automatic payments will also be sent to those receiving Social Security retirement, disability benefits, Railroad Retirement benefits, Veterans Affairs benefits or Supplemental Security Income soon.

 

Watch out for scams related to Economic Impact Payments

The IRS urges taxpayers to be on the lookout for scams related to the Economic Impact Payments. To use the new app or get information, taxpayers should visit IRS.gov. People should watch out for scams using email, phone calls or texts related to the payments. Be careful and cautious: The IRS will not send unsolicited electronic communications asking people to open attachments, visit a website or share personal or financial information.

There are links embedded in this article that don't paste. For more info go here https://www.irs.gov/ and click on Get My Payment or Coronavirus Tax Relief.

 

I have really been surprised it's taken so long for Social Security and SSI recipients to get the payments. Initially it looked like they were going to be the first to go out but not so. I've read that this stimulus program really caused the IRS serious problems in implementing this.

 

Bob

[MoodyBluesKeys]

I can understand the length of time. After looking at both PPP and EIDL, my conclusion was that my very small business would be better to use EIDL. I submitted on 13 April, my submission number is between 3,037,xxx,xxx and 3,038,xxx,xxx; and the GetMyPayment link that I just checked said that whatever amount they decided was proper (don't know amount yet) would be deposited to my account on 15 May. Working in computers as I do, and with this being a totally new program for the IRS to have to code, test, and implement; taking just a bit over a month to process seems very reasonable, especially since over 3 million applications had been filed before mine.

[MoodyBluesKeys]

I can understand the length of time. After looking at both PPP and EIDL, my conclusion was that my very small business would be better to use EIDL. I submitted on 13 April, my submission number is between 3,037,xxx,xxx and 3,038,xxx,xxx; and the GetMyPayment link that I just checked said that whatever amount they decided was proper (don't know amount yet) would be deposited to my account on 15 May. Working in computers as I do, and with this being a totally new program for the IRS to have to code, test, and implement; taking just a bit over a month to process seems very reasonable, especially since over 3 million applications had been filed before mine. And, let me thank you for posting the initial information that got me started with the whole process. Between your assistance and "JJtheCPA" on YouTube; I was able to figure the ramifications of both programs and make the application. While I am a Social Security recipient, have a fully paid for home, and fully paid vehicles; so that I am not in imminent danger of defaulting on anything; my business has been impacted. Most of the impact has been my choice as a 78 year old with COPD, I have only done service work for my largest commercial client in the past couple of months, and have turned down residential calls.