Federal Tax Posts

The Treasury and IRS have proposed regs to help businesses claim credits for carbon capture. The regs provide guidance on two new credits for carbon oxide captured using equipment placed in service on or after Feb. 9, 2018. The credits, which were part of legislation enacted in Feb. 2018, would allow up to 1) $50 per metric ton of qualified carbon oxide for permanent sequestration [...]

In new guidance, the IRS has provided more coronavirus (COVID-19) deadline relief for employment taxes, employee benefit plan and other requirements. Notice 2020-35 postpones deadlines for certain specified time-sensitive actions with respect to certain employment taxes, employee benefit plans, exempt organizations, and Coverdell education savings accounts because of the ongoing COVID-19 pandemic. The notice also provides a temporary waiver of the requirement for a Certified [...]

The IRS and the Social Security Administration (SSA) must work together to fight employment-related identity-fraud, a report by the Government Accountability Office (GAO) warned. The report showed a key source of fraud involves individuals who use another person’s Social Security number. People may do this if they aren’t authorized to work in the United States, are trying to avoid child support payments and other reasons, [...]

The Paycheck Protection Program (PPP) is one way the Small Business Administration (SBA) is helping small employers keep payroll flowing during the novel coronavirus (COVID-19) crisis. The PPP lends businesses the funds to cover payroll, some employee benefit costs, and certain other expenses. Another SBA option is to apply for “employee retention credits,” but only for businesses that don’t also have an outstanding PPP loan. [...]

Did you receive an Economic Impact Payment (EIP) for less than you expected? EIPs are part of the tax relief intended to help mitigate the effects of the novel coronavirus (COVID-19) crisis. Generally, the EIP amounts are predictable (up to $1,200 if you’re under a certain income threshold). But amounts may be less for reasons including: misunderstandings about the eligibility of dependents for $500 per [...]

The IRS has increased the health Flexible Spending Account (FSA) carryover amount. In Notice 2020-33, the IRS stated that the FSA carryover limit (currently fixed at $500) will now be indexed for inflation. For a plan year starting in 2020, the maximum unused amount that can be carried over to the next plan year starting in 2021 is $550. The tax code allows employers to [...]

Proposed regulations clarify estate and non-grantor trust deductions. The IRS has issued proposed reliance regs clarifying that certain deductions allowed to an estate or non-grantor trust wouldn’t be miscellaneous itemized deductions. Thus, these deductions would not be affected by the suspension of the deductibility of miscellaneous itemized deductions for tax years beginning before 2026. The proposed regs also provide guidance on determining the character, amount [...]

Taxpayers have many questions regarding Economic Impact Payments (EIPs) and the IRS is answering some of them in FAQs on its website. Specifically, individuals are wondering whether an EIP is considered taxable income. The IRS said it’s not, and taxpayers won’t owe tax on it. In addition, the payment won’t reduce taxpayers’ refunds or increase the amount they owe when they file their 2020 tax [...]

To address unanticipated health care expenses due to the COVID-19 pandemic, the IRS has issued guidance to increase flexibility in employees’ cafeteria plans. The IRS has added to the situations in which a cafeteria plan may allow employees to make mid-year elections, allowed more flexibility with respect to health flexible spending accounts (FSAs) and dependent care assistance programs under a cafeteria plan, and provided several [...]

More than 130 million individuals have already received Economic Impact Payments (EIPs) worth more than $200 billion, according to the IRS. “Millions more are on the way every week,” said IRS Commissioner Chuck Rettig, to help offset economic damage caused by the novel coronavirus (COVID-19) crisis. The U.S. Treasury Dept. and the IRS have just released a state-by-state breakdown showing how payments made in the [...]

The U.S. House has passed the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act. The bill would provide more than $1 trillion of aid to state, local, territorial and tribal governments to pay first responders and health care workers. It would also provide an additional recovery rebate, similar to the CARES Act economic impact payment. The recovery rebate would be $1,200 per eligible taxpayer [...]

The federal government logged an estimated budget deficit of $1.48 trillion for the first seven months of fiscal year 2020, which a Congressional Budget Office (CBO) report said “appears to be unprecedented.” The deficit was $949 billion more than the same period last year, as receipts fell $200 billion and outlays rose $749 billion. “That substantial difference stems from the economic disruption caused by the [...]

May 13 is the deadline to provide the IRS with information to get an Economic Impact Payment (EIP) via direct deposit. The IRS has stated that taxpayers who qualify for, but haven’t received their EIP, should provide the direct deposit bank information on the IRS’s “Get My Payment” website by noon on May 13. The tax agency said this step will help avoid the delay [...]

Some people have reported receiving Economic Impact Payments from the federal government that were sent in error. These are the payments the IRS is sending to Americans who meet certain requirements to help mitigate the effects of the novel coronavirus (COVID-19) pandemic. What should you do if you receive a payment and you’re not entitled to it or the amount is more than you’re entitled [...]