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Tax Resources for Small BusinessSmall Business and Self-Employed One-Stop Resource Small Business Forms & Instructions e-File for Businesses and Self-Employed Other ResourcesTax Information for Charities
| Issue Number: 2021-05Inside This Issue
1. IRS provides guidance for employers claiming the Employee Retention Credit for first two quarters of 2021 The Internal Revenue Service issued guidance for employers claiming the Employee Retention Credit under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) modified by the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act). To review these changes, see Notice 2021-23. Additional coronavirus relief information for businesses is available on IRS.gov.2. Free workshop helps small business owners understand and meet tax obligations The Small Business Virtual Tax Workshop helps educate small business owners about their taxes. It's free and available online 24/7. The updated chapters contain direct links to more specific topics within each lesson, like chapters in a book. Viewers can choose the lessons that apply to their small business. They can also pause and bookmark lessons so they can review information later. 3. The IRS to recalculate taxes on unemployment benefits; refunds to start in May The IRS will take steps to automatically refund money to people who filed their tax return reporting unemployment compensation before the recent changes made by the American Rescue Plan. The legislation was signed on March 11. The new IRS guidance includes details for those eligible taxpayers who have not yet filed. 4. IRS, Treasury disburse more Economic Impact Payments under the American Rescue Plan; Non-filer Social Security and other federal beneficiary stimulus payments As work continues on issuing millions of Economic Impact Payments to Americans, the IRS and Treasury Department announced that they anticipate payments will begin to be issued this weekend to Social Security recipients and other federal beneficiaries who do not normally file a tax return, with the projection that the majority of these payments would be sent electronically and received on April 7, 2021. Many federal beneficiaries who filed 2019 or 2020 returns or used the Non-Filers tool last year were issued Economic Impact Payments, if eligible, during the last three weeks. Most Social Security retirement and disability beneficiaries, railroad retirees and recipients of veterans' benefits who are eligible for an Economic Impact Payment do not need to take any action to receive a payment. 5. IRS urges employers to take advantage of the Work Opportunity Tax Credit Giving someone a work opportunity may translate into a business tax credit for you and greater stability for a family. The Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers for hiring individuals from certain targeted groups who have consistently faced significant barriers to employment. 6. Taxable Fringe Benefit Essentials for Employers Webinar The IRS Tax Exempt and Government Entities Division and the Office of Federal, State and Local Governments would like to invite small businesses to register to watch the free Taxable Fringe Benefit Essentials for Employers Webinar on April 14, 2021 at 1:00 p.m. (ET). This webinar is designed to explain what a fringe benefit is and how to value a fringe benefit. It will cover the most common fringe benefits and explain if those fringe benefits are taxable. For more information, see Webinars for Tax Exempt & Government Entities. 7. IRS extends additional tax deadlines for individuals to May 17 The IRS announced that individuals have until May 17, 2021 to meet certain deadlines that would normally fall on April 15, such as making IRA contributions and filing certain claims for refund. This follows a previous announcement that the federal income tax filing due date for individuals for the 2020 tax year was extended from April 15, 2021, to May 17, 2021. Notice 2021-21 provides details on the additional tax deadlines. 8. Face masks and other COVID-19 personal protective equipment to prevent the spread of COVID-19 are tax deductible The IRS issued Announcement 2021-7 clarifying that the purchase of personal protective equipment for the primary purpose of preventing the spread of coronavirus are deductible medical expenses. In addition to masks, this includes times such as hand sanitizer and sanitizing wipes. The amounts paid for personal protective equipment are also eligible to be paid or reimbursed under health flexible spending arrangements (health FSAs), Archer medical savings accounts (Archer MSAs), health reimbursement arrangements (HRAs), or health savings accounts (HSAs). 9. IRS Criminal Investigation pledges continued commitment to investigating COVID-19 fraud The IRS Criminal Investigation Division (IRS-CI) marks the one-year anniversary of the Coronavirus Aid, Relief and Economic Security Act by pledging its continued commitment to investigating COVID-19 fraud. This includes fraud related to:
IRS-CI encourages the public to share information regarding known or suspected fraud attempts against any of the programs offered through the CARES Act. Here's how to report a suspected crime and learn more about COVID-19 scams and other financial schemes. 10. J5 countries host 'Challenge' aimed at FINtech companies The Joint Chiefs of Global Tax Enforcement (J5) brought together investigators, cryptocurrency experts and data scientists in a coordinated push to track down individuals and organizations perpetrating tax crimes around the world. This year the challenge focused on Financial Technology (FINtech) companies. Many FINtech companies have adopted compliance regulations and are partnering with governments and law enforcement in prohibiting financial crime. However, due to the online nature of the products, the novelty and the lack of regulation and compliance in some areas, the FINtech industry can be used by tax avoiders and money launderers to commit crimes. 11. Low Income Taxpayer Clinic application period now open The IRS announced it will accept applications for an 18-month Low Income Taxpayer Clinic (LITC) matching grant from all qualified organizations. The LITC matching grant news release provides more information, including:
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