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| Issue Number: 2020-15Inside This Issue
1. IRS provides tax relief for victims of Hurricane Laura; Oct. 15 filing deadline and other dates are extended to Dec. 31 Victims of Hurricane Laura have until Dec. 31, 2020, to file various individual and business tax returns and make tax payments. The tax relief postpones various tax filing and payment deadlines starting on Aug. 22, 2020. As a result, affected taxpayers will have until Dec. 31, 2020, to file returns and pay any taxes that were originally due during this time. This means individuals who had a valid extension to file their 2019 return on Oct. 15, 2020, will now have until Dec. 31, 2020, to file. The IRS noted, however, that because tax payments related to these 2019 returns were due on July 15, 2020, those payments are not eligible for this relief. The IRS is offering this relief to any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual assistance. The current list of eligible localities is always available on the disaster relief page on IRS.gov. 2. Guidance issued to implement Presidential Memorandum deferring certain employee Social Security tax withholding The Department of Treasury and Internal Revenue Service issued guidance implementing the Presidential Memorandum issued on Aug. 8, 2020, allowing employers to defer withholding and payment of the employee's portion of the Social Security tax if the employee's wages are below a certain amount. Notice 2020-65, posted on IRS.gov, makes relief available for employers and generally applies to wages paid starting Sept. 1, 2020, through Dec. 31, 2020. The employee Social Security tax deferral may apply to payments of taxable wages to an employee that are less than $4,000 during a bi-weekly pay period, with each pay period considered separately. No deferral is available for any payment to an employee of taxable wages of $4,000 or above for a bi-weekly pay period. The notice postpones the time for employers to withhold and pay employee Social Security taxes. 3. Failure to deposit penalties on some employers claiming new tax credits The IRS is aware that a small population of employers that reduced tax deposits in anticipation of claiming the sick and family leave credits, or employee retention credit, may have received a notice stating there was a failure to deposit penalty applicable to the Form 941 on which the credits were claimed. The IRS is taking actions to identify these employer accounts and correct them as soon as possible. 4. 13.9 million Americans receiving IRS tax refund interest The Treasury Department and the Internal Revenue Service began sending out interest payments to about 13.9 million taxpayers who timely filed 2019 federal income tax returns and received a refund. The interest payments went to individual taxpayers who filed a 2019 return by this year's July 15 deadline and either received a refund or will receive a refund. Taxpayers who received an interest payment must report the interest on the 2020 federal income tax return. In January 2021, the IRS will send a Form 1099-INT to anyone who receives interest totaling at least $10. 5. IRS reminds taxpayers that unemployment compensation is taxable; Have tax withheld now and avoid a tax-time surprise The Internal Revenue Service issued a reminder that unemployment compensation is taxable. Taxpayers can have tax withheld from these benefits now to avoid owing taxes on this income when the federal income tax return if filed next year. Withholding is voluntary. Federal law allows any recipient to choose to have a flat 10% withheld from the benefits to cover part or all of the tax liability. To do that, a taxpayer should complete Form W-4V, Voluntary Withholding Request, and give it to the agency paying the benefits. They should not send it to the IRS. If the payor has its own withholding request form, taxpayers can use it instead. 6. Tax year 2019 Form 1040-X can now be filed electronically Individuals who need to amend a 2019 Forms 1040 or 1040-SR can now file the Form 1040- X, Amended U.S. Individual Income Tax Return electronically using available tax software products. Taxpayers must have e-filed the original 2019 to be able to electronically file the amended return. Because the IRS continues to work through backlogs, the normal processing time of up to 16 weeks for F1040X submitted on paper also applies to the electronic Forms 1040-X. Taxpayers can still submit a paper version of the 1040-X and should follow the instructions for preparing and submitting the paper form. Taxpayers filing a 1040-X electronically can use the "Where's My Amended Return?" online tool to check the status. 7. First Small Business/Self Employed Annual Report Released The IRS Small Business/Self Employed division released a new annual report covering FY 2019. The new annual report focuses on program highlights, priorities and accomplishments of the SB/SE organization and its employees. The report provides a 28-page overview of one of the largest IRS organizations, which services about 57 million taxpayers, and highlights enforcement priorities including virtual currency and other topics.
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