Tax & Current Accounting Topics

Returning an Economic Impact Payment 

https://www.irs.gov/newsroom/returnin

https://accountinginstruction.info

Millions of eligible individuals have already received their Economic Impact Payments. Some people, including those who received a payment for a deceased individual, may be unsure whether they should return a payment.  Here is additional information about returning an Economic Impact Payment.  How should an individual return an Economic Impact Payment? Mail the payment to the IRS address – based on the state the person lives in – as indicated in the  FAQs about repayments.

IRS issues guidance on the elimination of the deduction of qualified transportation fringe benefit expenses

 https://www.irs.gov/newsroom/irs-issu

https://accountinginstruction.info

WASHINGTON — The Internal Revenue Service today issued proposed regulations that provide guidance for the deduction of qualified transportation fringe and commuting expenses.  The Tax Cuts and Jobs Act (TCJA) does not allow deductions for qualified transportation fringe (QTF) expenses and does not allow deductions for certain expenses of transportation and commuting between an employee's residence and place of employment.

Relief for taxpayers affected by COVID-19 who take distributions or loans from retirement plans 

https://www.irs.gov/newsroom/relief-f

https://accountinginstruction.info

WASHINGTON — The Internal Revenue Service today released Notice 2020-50 (PDF) to help retirement plan participants affected by the COVID-19 coronavirus take advantage of the CARES Act provisions providing enhanced access to plan distributions and plan loans. This includes expanding the categories of individuals eligible for these types of distributions and loans (referred to as "qualified individuals") and providing helpful guidance and examples on how qualified individuals will reflect the tax treatment of these distributions and loans on their federal income tax filings.

IRS alert: Economic Impact Payments belong to recipient, not nursing homes or care facilities

 https://www.irs.gov/newsroom/irs-aler

https://accountinginstruction.info

WASHINGTON — The Internal Revenue Service today alerted nursing home and other care facilities that Economic Impact Payments (EIPs) generally belong to the recipients, not the organizations providing the care.  The IRS issued this reminder following concerns that people and businesses may be taking advantage of vulnerable populations who received the Economic Impact Payments.  The payments are intended for the recipients, even if a nursing home or other facility or provider receives the person's payment, either directly or indirectly by direct deposit or check. These payments do not count as a resource for purposes of determining eligibility for Medicaid and other federal programs for a period of 12 months from receipt. They also do not count as income in determining eligibility for these programs.

IRS outlines changes to health care spending available under CARES Act

 https://www.irs.gov/newsroom/irs-outl

https://accountinginstruction.info

WASHINGTON — The Internal Revenue Service has advised that new rules under the CARES Act provide flexibility for health care spending that may be helpful in the current environment where more people may need at-home services due to measures to fight the coronavirus.  Telehealth and High Deductible Health Plans Under the CARES Act, a high deductible health plan (HDHP) temporarily can cover telehealth and other remote care services without a deductible, or with a deductible below the minimum annual deductible otherwise required by law. Telehealth and other remote care services also are temporarily included as categories of coverage that are disregarded for the purpose of determining whether an individual who has other health plan coverage in addition to an HDHP is an eligible individual who may make tax-favored contributions to his or her HSA. Thus, an otherwise eligible individual with coverage under an HDHP may still contribute to an HSA despite receiving coverage for telehealth and other remote care services before satisfying the HDHP deductible, or despite receiving coverage for these services outside the HDHP. The temporary rules under the CARES Act, as extended by IRS Notice 2020-29 (PDF), apply to services provided on or after Jan. 1, 2020, with respect to plan years beginning on or before Dec. 31, 2021.

Returning an Economic Impact Payment 

https://www.irs.gov/newsroom/returnin

https://accountinginstruction.info

Millions of eligible individuals have already received their Economic Impact Payments. Some people, including those who received a payment for a deceased individual, may be unsure whether they should return a payment.  Here is additional information about returning an Economic Impact Payment.  How should an individual return an Economic Impact Payment? Mail the payment to the IRS address – based on the state the person lives in – as indicated in the  FAQs about repayments.

https://accountinginstruction.info

Taxpayers will soon be able to file amended tax returns electronically 

https://www.irs.gov/newsroom/taxpayer

https://accountinginstruction.info

Later this summer, for the first time taxpayers will be able to file their Form 1040-X, Amended U.S Individual Income Tax Return electronically.  Making this form electronically fileable has been a long-time goal for the IRS. It will greatly benefit the tax professional community and taxpayers.

Here’s who qualifies a taxpayer for the child and dependent care credit 

https://www.irs.gov/newsroom/heres-wh

https://accountinginstruction.info

Childcare or adult dependent care can be a major expense. Fortunately, the child and dependent care credit can provide some relief. Taxpayers who pay for daycare expenses may be eligible to claim up to 35% of what they spend; limits apply.  For the purposes of this credit, the IRS defines a qualifying person as: A taxpayer's dependent who is under age 13 when the care is provided.

IRS reminder: Deadline postponed to July 15 for those who pay estimated taxes 

https://www.irs.gov/newsroom/irs-remi

WASHINGTON — The Internal Revenue Service reminds taxpayers that estimated tax payments for tax year 2020, originally due April 15 and June 15, are now due July 15. This means that any individual or corporation that has a quarterly estimated tax payment due has until July 15 to make that payment without penalty.  In response to the COVID-19 outbreak, the Treasury Department and the Internal Revenue Service are providing special tax filing and payment relief to individuals and businesses. This relief applies to federal income tax returns and tax payments (including tax on self-employment income) otherwise due April 15, 2020. This relief does not apply to state tax payments or deposits or payments of any other type of federal tax.