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.
 
The Social Security Administration (SSA) has issued FAQs on this issue, including how representative payees should handle administering the payments for the recipient. SSA has noted that under the Social Security Act, a representative payee is only responsible for managing Social Security or Supplemental Security Income (SSI) benefits. An EIP is not such a benefit; the EIP belongs to the Social Security or SSI beneficiary. A representative payee should discuss the EIP with the beneficiary. If the beneficiary wants to use the EIP independently, the representative payee should provide the EIP to the beneficiary.

The IRS also noted the Economic Impact Payments do not count as resources that have to be turned over by benefit recipients, such as residents of nursing homes whose care is provided for by Medicaid. The Economic Impact Payment is considered an advance refund for 2020 taxes, so it is considered a tax refund for benefits purposes.
 
The IRS noted the language in the Form 1040 instructions apply to Economic Impact Payments: “Any refund you receive can't be counted as income when determining if you or anyone else is eligible for benefits or assistance, or how much you or anyone else can receive, under any federal program or under any state or local program financed in whole or in part with federal funds. These programs include Temporary Assistance for Needy Families (TANF), Medicaid, Supplemental Security Income (SSI), and Supplemental Nutrition Assistance Program (formerly food stamps). In addition, when determining eligibility, the refund can't be counted as a resource for at least 12 months after you receive it.”
 
Additional information about EIPs and representative payees involving Social Security and Supplemental Security Income benefits can be found at www.ssa.gov/coronavirus/#reppayee.

Additional information on EIPs can be found at www.irs.gov/eipfaq.

Revenue Ruling 2020-14 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by § 1274. 

The rates are published monthly for purposes of sections 42, 382, 412, 642, 1288, 1274, 7520, 7872, and various other sections of the Internal Revenue Code. 

Revenue Ruling 2020-14 will be in Internal Revenue Bulletin 2020-28, dated July 6, 2020.

Notice 2020-45 provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under § 417(e)(3), and the 24-month average segment rates under § 430(h)(2) of the Internal Revenue Code.  In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under § 431(c)(6)(E)(ii)(I), as reflected by the application of § 430(h)(2)(C)(iv). 

Notice 2020-45 will be in Internal Revenue Bulletin 2020-27, dated June 29, 2020.

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.

The new electronic option will allow the IRS to receive amended returns faster while minimizing errors normally associated with manually completing the form. It will also provide the IRS with more complete and accurate data to help customer service representatives answer taxpayer questions.

When the electronic filing option becomes available, taxpayers will only be able to amend tax year 2019 Forms 1040 and 1040-SR returns electronically. In general, taxpayers will still have the option to submit a paper version of the Form 1040-X and should follow the instructions for preparing and submitting the paper form.

Whether an amended return is filed electronically or manually, taxpayers can still use the "Where's My Amended Return?" online tool to check the status of their amended return.

 

Share this tip on social media -- #IRSTaxTip: Taxpayers will soon be able to file amended tax returns electronically. https://go.usa.gov/xwZVT

WASHINGTON — The Treasury Department and the Internal Revenue Service today provided tax relief for certain taxpayers affected by the COVID-19 pandemic involved in new markets tax credit transactions.

The taxpayers receiving relief through today's guidance are community development entities (CDEs) and qualified active low-income community businesses (QALICBs) investing and conducting businesses in low-income communities.

Notice 2020-49 (PDF) provides a CDE or QALICB with relief for certain specified time-sensitive acts that are due to be performed between April 1, 2020, and Dec. 31, 2020, in order to meet requirements under section 45D of the Internal Revenue Code and its regulations. A CDE or QALICB may perform these acts by Dec. 31, 2020. The additional time is provided for the following time-sensitive acts:

Making investments

If a CDE is due to invest cash received in a qualified low-income community investment (QLICI) on or after April 1, 2020, and before Dec. 31, 2020, that cash investment is treated as invested in a QLICI to the extent it is invested by Dec. 31, 2020.

Reinvestments

If a CDE is due to reinvest certain amounts of cash or payment in a QLICI on or after April 1, 2020, and before Dec. 31, 2020, the amounts are treated as continuously invested in a QLICI to the extent the amounts are so reinvested by Dec. 31, 2020.

Expending amounts for construction of real property

If a QALICB is due to expend the proceeds of a capital or equity investment or loan by a CDE for construction of real property on or after April 1, 2020, and before Dec. 31, 2020, such proceeds are treated as a reasonable amount of working capital of the QALICB if so expended by Dec. 31, 2020.

Additional information about tax relief for businesses affected by the COVID-19 pandemic can be found on IRS.gov.

Notice 2020-49 postpones to December 31, 2020, the due dates for making investments, making reinvestments, and expending amounts for construction of real property under § 45D of the Internal Revenue Code (Code) due to be performed or expended on or after April 1, 2020, and before December 31, 2020. 

Revenue Procedure 2020-16 provides an automatic procedure for a State or local government in which an empowerment zone is located to extend the empowerment zone designation made under section 1391(a) of the Internal Revenue Code (Code).  Specifically, the automatic procedure under section 3.01 of this revenue procedure provides that a State or local government that nominated an empowerment zone is deemed to extend until December 31, 2020, the termination date designated by that State or local government in its empowerment zone nomination (designated termination date), as described in section 1391(d)(1)(B).  Section 3.02 of this revenue procedure provides a procedure for such State or local government to decline this deemed extension of its designated termination date.

It will be published in IRB 2020-27, dated Monday 06/29/2020.

WASHINGTON – The Internal Revenue Service today provided guidance for employers whose employees forgo sick, vacation or personal leave because of the COVID-19 pandemic.

Notice 2020-46 provides that cash payments employers make to charitable organizations that provide relief to victims of the COVID-19 pandemic in exchange for sick, vacation or personal leave which their employees forgo will not be treated as compensation. Similarly, the employees will not be treated as receiving the value of the leave as income and cannot claim a deduction for the leave that they donated to their employer.

Employers, however, may deduct these cash payments as a business expense or as a charitable contribution deduction if the employer otherwise meets the respective requirements of either section. 

Notice 2020-46 provides further details for employers with leave donation programs.

Additional information about tax relief for those affected by the COVID-19 pandemic can be found on IRS.gov.

Notice 2020-46 provides guidance under the Internal Revenue Code on the federal income and employment tax treatment of cash payments made by employers under leave-based donation programs to aid victims of the ongoing Coronavirus Disease 2019 (COVID-19) pandemic as described in the notice.  The notice provides that cash payments employers make to charitable organizations that provide relief to victims of the COVID-19 pandemic in exchange for sick, vacation, or personal leave which their employees forgo will not be treated as wages (or compensation, as applicable).

Notice 2020-46 will be in IRB:  2020-27, dated June 29, 2020.

WASHINGTON — As the July 15 tax-filing deadline − postponed from April 15 − draws near, the Internal Revenue Service is reminding all taxpayers who have yet to file their 2019 federal tax return to file electronically now, choose direct deposit for their refund, or pay any tax owed electronically.

Taxpayers who owe for tax year 2019 or need to pay 2020 estimated taxes originally due for the first quarter on April 15 or the second quarter on June 15 can schedule an electronic payment up to the July 15 due date.

The IRS continues to process electronic tax returns, issue direct deposit refunds and accept electronic payments. As of May 29, the IRS received over 133.8 million tax returns and issued over $250.9 billion in refunds.

Taxpayers should use electronic options to support social distancing and speed the processing of tax returns, refunds and payments. IRS.gov has a variety of options to help taxpayers.

Most taxpayers that usually have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020 − including individuals, trusts, estates, corporations and other non-corporate tax filers − qualify for the postponed due date. This means that anyone, including Americans who live and work abroad, now have until July 15 to file their 2019 federal income tax return and pay any tax due. A list of forms due July 15 is on the Coronavirus Tax Relief: Filing and Payment Deadlines page.

File electronically for free

Taxpayers whose income was $69,000 or less last year are eligible to use IRS Free File software. There are also Free File Fillable Forms, an electronic version of IRS paper forms. It has no income limitations. Free File options are available at IRS.gov/freefile.

2016 file for unclaimed refunds – deadline postponed to July 15

For 2016 tax returns, the normal April 15 deadline to claim a refund is now July 15, 2020. The law provides a three-year window of opportunity to claim a refund. If taxpayers do not file a return within three years, the money becomes property of the U.S. Treasury. The law requires taxpayers to properly address, mail and ensure the tax return postmark is July 15, 2020, or sooner.

Choose direct deposit for refunds

The safest and fastest way for taxpayers to get their refund is to have it electronically deposited into their bank or other financial account. Taxpayers can use direct deposit to deposit their refund into one, two or even three accounts. Direct deposit is much faster than waiting for a paper check to arrive in the mail.

After filing, use “Where’s My Refund?” on IRS.gov or download the IRS2Go Mobile App to track the status of a refund.

Schedule a payment electronically

Taxpayers can file now and schedule their federal tax payments up to the July 15 due date. They can pay online, by phone or with their mobile device and the IRS2Go app. When paying federal taxes electronically taxpayers should remember:

Request an extension of time to file a tax return electronically

Taxpayers who need more time to prepare their federal tax return should be aware that:

Individual tax filers, regardless of income, can use IRS Free File to electronically request an automatic tax-filing extension. Filing this form gives the taxpayer until Oct. 15 to file a federal tax return. To get the extension, the taxpayers must estimate their tax liability on the extension form and should pay any amount due.

Alternatively, taxpayers can get an extension by paying all or part of their estimated income tax due and indicate that the payment is for an extension using Direct Pay, the Electronic Federal Tax Payment System (EFTPS), or a credit or debit card. This way the taxpayer won’t have to file a separate extension form and will receive a confirmation number for their records.

Get answers to tax questions

Taxpayers may find answers to many of their questions using the Interactive Tax Assistant (ITA), a tax law resource that works using a series of questions and responses. IRS.gov has answers for Frequently Asked Questions. The IRS website has tax information in: Spanish (Español); Chinese (中文); Korean (한국어); Russian (Pусский); Vietnamese (Tiếng Việt); and Haitian Creole (Kreyòl ayisyen).

For more information go to IRS.gov/COVIDtaxdeadlines.