Federal – Brinker Simpson

On October 6, 2020

The Internal Revenue Service (IRS) has extended the deadline to register for an Economic Impact Payment to November 21, 2020 from October 15. The IRS announced the extended deadline through a press release October 5, 2020. The IRS announcement can be read in full HERE.

The IRS urges people who don’t typically file a tax return – and haven’t received an Economic Impact Payment – to register as quickly as possible using the Non-Filers: Enter Info Here tool on IRS.gov. The tool will not be available after November 21.

This additional time into November is solely for those who have not received their EIP and don’t normally file a tax return.… Read More

1099-C Not Required For PPP Loan Forgiveness

On September 23, 2020

The Internal Revenue Service announced yesterday that lenders are not required to and should not file a 1099-C information return with the IRS or payee statement to the eligible recipient when all or a portion of a Paycheck Protection Program loan is forgiven under section 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES).

Generally, entities are required to file the 1099-C information return with the IRS when they discharge at least $600 of a borrower’s indebtedness and to furnish a payee statement to the borrower.

IRS Announcement 2020-12 is intended to prevent erroneous underreporting notices that may be triggered by the filing of the information returns and confusion caused by the furnishing of payee statements to eligible recipients.… Read More

The New Charitable Deduction for Non-itemizers

Many charitable organizations are now experiencing a decline in giving as the U.S. finds itself grappling with the COVID health crisis. In response, Congress included a provision in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136, intended to provide some relief for charitable organizations. Section 2204 of the CARES Act permits eligible individuals who do not itemize deductions to deduct $300 of qualified charitable contributions as an “above-the-line” deduction, i.e., as an adjustment in determining adjusted gross income (AGI), for tax years beginning in 2020.

QUALIFYING FOR THE DEDUCTION

For tax years beginning in 2020, eligible individuals may deduct up to $300 in qualified charitable contributions made to qualified charitable organizations.… Read More

IRS Addresses Temporary Deviation from Handwritten Signature Requirement for Limited List of Tax Forms

On August 27, 2020, the Department of Treasury and Internal Revenue Service issued a memorandum addressing Temporary Deviation from Handwritten Signature Requirement for Limited List of Tax Forms. Here is the memo content:

As part of our response to the COVID-19 situation, we have taken steps to protect employees, taxpayers and their representatives by minimizing the need for in-person contact. Taxpayer representatives have expressed concerns with securing handwritten signatures during these times for forms that are required to be filed or maintained on paper. To alleviate these concerns while promoting timely filing, we are implementing a temporary deviation with this memorandum that allows taxpayers and representatives to use electronic or digital signatures* when signing the following forms that currently require a handwritten signature:

• Form 3115, Application for Change in Accounting Method;

• Form 8832, Entity Classification Election;

• Form 8802, Application for U.S.… Read More

FFCRA paid leave updates including DOL guidance on eligibility for in a remote learning environment

In Federal, New York, State/Local

On March 18, the Families First Coronavirus Response Act (FFCRA) was signed into law to respond to the economic impact of the COVID-19 pandemic. Included in the legislation was a provision requiring employers (generally businesses with less than 500 employees with an exemption for public health employees) to provide Emergency Paid Sick Leave and Emergency Paid Medical Leave when employees met certain criteria. The paid leave would be funded by the federal government through payroll tax credits.

The effective date for the emergency paid leave provision was April 2, 2020 and the Department of Labor announced the regulations for implementation through a temporary rule issued April 1, 2020 that expires December 31, 2020.… Read More

PPP interim final rule adds provisions for owner-employee compensation exemptions and eligibility of certain non-payroll costs

The Small Business Administration issued an interim final rule (IFR) on August 24, 2020 to address applicability of owner compensation rules for minority interest owners and the eligibility of non payroll costs.

Certain owners exempt from PPP owner-employee compensation rule

The IFR provides guidance to borrowers relative to the applicability of owner-employee compensation rules. Specifically, it exempts owners with less than a 5% ownership stake from applying the owner-employee compensation rule. The exemption is intended to cover owner-employees who have no “meaningful” ability to influence decisions over how loan proceeds are allocated. The exemption from the rule only applies to owner-employees of S or C corporations, not partnerships or limited liability companies.… Read More

Additional guidance released from IRS on President Trump’s payroll tax deferral executive order

On September 2, 2020

President Trump signed four COVID-19 related executive orders on August 8, 2020 after Congress failed to pass economic relief legislation. Included in the executive orders was a payroll tax deferral for American workers earning, generally, less than $100,000 on an annualized basis. The order did not include details on implementation, repayment terms of the deferral, or other critical pieces of information needed to determine if businesses would participate. On August 28^th, the Treasury Department and IRS issued further official guidance on the payroll tax deferral.

According to IRS Notice 2020-65, employers can defer the withholding, deposit, and payment of certain payroll taxes on wages paid from Sept.… Read More

13.9 million Americans to receive IRS tax refund interest; taxable payments to average $18

On August 21, 2020

This week the Treasury Department and the Internal Revenue Service will send interest payments to about 13.9 million individual taxpayers who timely filed their 2019 federal income tax returns and are receiving refunds.

The interest payments, averaging about $18, will be made to individual taxpayers who filed a 2019 return by this year’s July 15 deadline and either received a refund in the past three months or will receive a refund. Most interest payments will be issued separately from tax refunds.

In most cases, taxpayers who received their refund by direct deposit will have their interest payment direct deposited in the same account.… Read More

Why hasn’t the IRS cashed my check yet? Why am I receiving a notice?

On August 17, 2020