Notice 2024-35 provides relief with respect to certain required minimum distributions (RMDs) that are not made in 2024. This relief was provided with respect to certain RMDs in 2021, 2022, and 2023, and is being extended in this notice to certain RMDs in 2024. Specifically, the notice provides that if certain requirements are met, a plan will not fail to be qualified for failing to make a specified RMD in 2024, and a taxpayer will not be assessed an excise tax for failing to take the RMD. This notice also announces that the final regulations intended to be published relating to RMDs are anticipated to apply for purposes of determining RMDs for calendar years beginning on or after January 1, 2025. 

Notice 2024-35 will be in IRB: 2024-19, dated May 6, 2024.

WASHINGTON The IRS encourages taxpayers to use the IRS Tax Withholding Estimator to ensure they’re withholding the correct amount of tax from their pay in 2024. 

This digital toolprovides workers, self-employed individuals and retirees with wage income a user-friendly resource to effectively adjust the amount of income tax withheld from their wages. 

The Tax Withholding Estimator will help taxpayers avoid unwanted results in 2024 if the refund for their 2023 return was too large, too small or if they received a surprise tax amount due. 

Benefits of using the Estimator

For employed individuals, withholding refers to the federal income tax amount deducted from their paycheck. Taxpayers can use the Tax Withholding Estimator's findings to decide whether they should fill out a new Form W-4 and give it to their employer. This process can, for instance: 

• Ensure the correct tax amount is withheld, preventing a surprise tax bill or penalty during tax season, and
• Decide whether to reduce upfront tax withholding, increasing take-home pay and potentially reducing any tax refund at the end of the tax year. 

When should taxpayers use this tool?

The IRS suggests taxpayers review their withholding at least once annually. For anyone who’s recently completed their 2023 return, now is an ideal time to do so. It's also wise to use this tool after significant life events like marriage, divorce, buying a home or having a child. 

When using the withholding calculator taxpayers should consider all forms of income, including part-time work, side jobs or the sale of goods or services commonly reported on Form 1099-K.

What records are needed?

The Tax Withholding Estimator’s results are only as accurate as the information entered. To help prepare, the IRS recommends taxpayers gather: 

• Their most recent pay statements, and if married, for their spouse,
• Information for other sources of income, and
• Their most recent income tax return in 2023, if possible. 

While the Tax Withholding Estimator works for most taxpayers, people with more complex tax situations should instead use the instructions in Publication 505, Tax Withholding and Estimated Tax. This includes taxpayers who owe alternative minimum tax or certain other taxes, and people with long-term capital gains or qualified dividends. 

Additional information

Tax Withholding Estimator FAQs

Paycheck Checkup

WASHINGTON — The Internal Revenue Service today updated frequently asked questions in Fact Sheet 2024-15 to addresses the federal income tax treatment of amounts paid for the purchase of energy efficient property and improvements. 

 

These FAQs supersede earlier FAQs that were posted in Fact Sheet 2022-40, on Dec. 22, 2022. 

 

The FAQs revisions are as follows: 

• General questions— Question 4 

On April 5, 2024, the Internal Revenue Service issued Announcement 2024-19 that addressed the federal income tax treatment of amounts paid for the purchase of energy efficient property and improvements. 

 

Generally, taxpayers who receive rebates for the purchase of energy efficient homes will not include the value of those rebates as income on their tax returns, however they will need to reduce the basis of the property when they sell it by the amount of the rebate.

 

The Inflation Reduction Act (IRA) statutory language describes performance-based incentives and electrification product subsidies as “rebates.” 

 

Announcement 2024-19 provides that amounts received from the Department of Energy (DOE) home energy rebate programs funded through the IRA will be treated as a reduction in the purchase price or cost of property for eligible upgrades and projects.  Accordingly, the consumer that receives an IRA rebate will not be required to report the value of the rebate as income.

 

More information about reliance is available.

WASHINGTON –The Internal Revenue Service today issued frequently asked questions (FAQs) in Fact Sheet 2024-13 related to the tax treatment of work-life referral services provided to employees under an employer’s work-life referral program. 

A work-life referral program is an employer-funded fringe benefit that provides work-life referral services to eligible employees. 

Work-life referral services are restricted to informational and referral consultations that assist employees with identifying, contacting and negotiating with life-management resources for solutions to a personal, work or family challenge.  For example, choosing a suitable child or dependent care program, connecting with a local retirement or financial planner or navigating eligibility for government benefits.   

The FAQs released today clarify that, under certain circumstances, the value of work-life referral services provided to employees through a work-life referral program can be excluded from income and employment taxes as de minimis fringe benefits.

Revenue Ruling 2024-09 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, and 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 2024-09 will be in IRB:  2024-19, dated May 6, 2024.

Inside This Issue

1. IRS Commissioner thanks tax community for hard work, long hours this filing season
2. Dirty Dozen: IRS warns tax pros, individuals to be cautious of ongoing scams designed to steal valuable information
3. Register today for the IRS Nationwide Tax Forum
4. Treasury, IRS issue new rules on corporate stock repurchase excise tax
5. Treasury, IRS releases corrected census tracts for the qualified alternative fuel vehicle refueling property credit 
6. Guidance on clean hydrogen production credit and the election to treat clean hydrogen production facilities as energy property
7. Upcoming webinars for tax practitioners
8. News from the Justice Department’s Tax Division
9. Technical Guidance

1.  IRS Commissioner thanks tax community for hard work, long hours this filing season

IRS Commissioner Danny Werfel today thanked the tax community for their continuing efforts to help taxpayers during this filing season. In a news release highlighting IRS resources available as the filing deadline approaches, Werfel highlighted this:

“Delivering tax season is a massive undertaking, and we greatly appreciate people in many different areas working long hours to serve taxpayers as the tax deadline approaches,” Werfel said. “This effort reaches far beyond the IRS and includes hard-working tax professionals, software providers, the payroll community as well as our colleagues in the state tax agencies. Their work helping taxpayers makes a difference.”

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2.  Dirty Dozen: IRS warns tax pros, individuals to be cautious of ongoing scams designed to steal valuable information

The IRS continues to share its Dirty Dozen list of tax scams reminding taxpayers and tax professionals to remain vigilant and protect themselves against fraudsters’ attempts intended to steal valuable information and file false tax returns. The IRS and the Security Summit partners urge tax pros and taxpayers to watch out for:

• Inaccurate or misleading tax advice on social media; 
• “New client” scams;
• Improper art donation deductions, charitable remainder annuity trusts, monetized installment sales; and
• Bogus tax avoidance strategies and offshore schemes.

“It’s crucial for tax professionals and businesses to be wary of creative and evolving cyberattacks designed to access sensitive systems,” said IRS Commissioner Danny Werfel. The IRS urges individuals to report unscrupulous promoters and tax preparers.

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3.  Register today for the IRS Nationwide Tax Forum

Tax pros: Register today to attend an upcoming IRS Nationwide Tax Forum. This year the forums will take place in Chicago, Orlando, Baltimore, Dallas and San Diego. Each forum is a three-day event, running Tuesday through Thursday, with more than 40 continuing education seminars, networking opportunities and more.

The IRS encourages attendees to maximize their time at the forums by participating in special pre-forum events on Monday, including the annual filing season program refresher course and a special practice management session during which IRS association partners will provide advice and strategies on how to improve their individual tax businesses.

Visit IRSTaxForum.com for information on the program, accommodations and registration.

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4.  Treasury, IRS issue new rules on corporate stock repurchase excise tax

The Department of Treasury and the IRS this week announced proposed regulations that would offer taxpayers and tax professionals with new guidance concerning the one percent excise tax owed on corporate stock repurchases. The proposed regulations would impact publicly traded domestic corporations that repurchase their stock or whose stock is acquired by certain affiliates. The regulations also would impact certain publicly traded foreign corporations that repurchase their stock or whose stock is acquired by certain affiliates. These regulations follow Notice 2023-2, published on Jan. 17, 2023, which provided initial guidance on the application of the stock repurchase excise tax.

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5.  Treasury, IRS releases corrected census tracts for the qualified alternative fuel vehicle refueling property credit

The Treasury Department and the IRS corrected Appendix A and Appendix B of Notice 2024-20 to add supplementary eligible census tracts for the qualified alternative fuel vehicle refueling property credit. This correction reflects additional census tracts that were determined to meet the description of eligible census tracts in Notice 2024-20. Additional details about the alternative fuel vehicle refueling property credit can also be found in the frequently asked questions.

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6.  Guidance on clean hydrogen production credit and the election to treat clean hydrogen production facilities as energy property

The Treasury Department and the IRS issued guidance for the collection of information for taxpayers to request an emissions value from the Department of Energy (DOE) to petition the Secretary of the Treasury for a determination of a provisional emissions rate (PER). The guidance complements proposed rules Treasury and the IRS issued in December on the hydrogen production tax credit, which was established in the 2022 Inflation Reduction Act. Those rules have yet to be finalized.

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7.  Upcoming webinars for tax practitioners

The IRS offers the upcoming live webinars to the tax practitioner community. For more information or to register, visit the Webinars for Tax Practitioners webpage:

• Impacts of Gaming on Tax Exempt Organizations on April 18 at 2 p.m. ET. Earn up to 1 CE credit (Federal Tax). Certificates of completion are being offered.
• Tax Implications of Chapter 11 Bankruptcy Filing for Individuals on May 1, at 1 p.m. ET. Earn up to 2 CE credits (Federal Tax). Certificates of completion are being offered. 

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8.  News from the Justice Department’s Tax Division

The U.S. District Court for the Middle District of Florida permanently enjoined Kenia Rodriguez from preparing returns for others and from owning, managing or working at any tax return preparation business in the future. The complaint alleges Rodriguez, through a fictitious entity called Rodriguez Tax Services, claimed extensive fraudulent deductions and credits on customers’ tax returns to purposely underreport their tax liabilities and claim refunds they were not entitled to receive. The complaint also alleged that Rodriguez hid her tax preparation activity by failing to properly identify herself on the tax returns that she prepared.

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9.  Technical Guidance

Announcement 2024-19 addresses the Federal income tax treatment of amounts paid for the purchase of energy efficient property and improvements as part of the Department of Energy’s “Home Energy Rebate Programs” under sections 50121 and 50122 of the Inflation Reduction Act.

Notice 2024-34 sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for March 2024 used under section 417(e)(3)(D), the 24-month average segment rates applicable for April 2024, and the 30-year Treasury rates, as reflected by the application of section 430(h)(2)(C)(iv). 

WASHINGTON – With the April tax filing deadline here, the Internal Revenue Service highlighted a variety of improvements that dramatically expanded service for millions of taxpayers during the 2024 filing season.

Through Inflation Reduction Act funding, the IRS continued to expand taxpayer service levels not seen in more than a decade with double-digit gains occurring in critical areas. Compared to a year ago, the IRS answered over 1 million more taxpayer phone calls this tax season, helped over 170,000 more people in-person and saw 75 million more IRS.gov visits fueled by a new and expanded “Where’s My Refund?” tool.

“Taxpayers continued to see major improvements from the IRS during the 2024 tax season,” said IRS Commissioner Danny Werfel. “A well-funded IRS is like night and day for taxpayers. With the help of more funding and added resources, service for taxpayers this filing season eclipsed levels seen during the past decade. This tax season meant real-world improvements for people looking for help, whether calling, visiting in-person or using IRS.gov.”

“We still have much more work to do, both to finish the 2024 tax season as well as put in place continued improvements made possible by Inflation Reduction Act funding,” Werfel said. “But this filing season marks another important chapter where we’ve improved service for taxpayers, continuing an accelerating trend in the story of transforming the IRS.”

Through April 6, the IRS processed more than 100 million individual tax returns. Tens of millions more will come in advance of the April deadline, the busiest time of the year for tax returns. The IRS also projects about 19 million taxpayers will file extensions, which will be due Oct. 15.

Since the start of the January tax season, the IRS has delivered more than $200 billion in refunds through early April. The average refund was $3,011, a 4.6% increase from last April’s average of $2,878.

Here are major filing season numbers in 10 key areas. These numbers, generally from late March and early April, reflect the historic 2024 tax season taking place at the IRS:

• Improved phone service. Continuing a trend seen last year following the addition of 5,000 new telephone assistors, the IRS level of service on its main phone lines reached more than 88%. That’s above the 84% level seen last year and more than a five-fold increase from the phone service levels seen during the pandemic era period, when the level of service was at just 15% in 2022.
• More calls answered. The IRS answered more taxpayer calls on its live assistor lines this year, a 16.8% increase from 2023. IRS assistors handled 7,608,000 calls, up from 6,513,000 the year before. IRS automated lines handled another approximately 7 million calls, 280,000 more than the previous year.
• Faster response times. Taxpayers waited, on average, just over three minutes for help on the IRS main phone lines. This is down from four minutes in 2023 and 28 minutes in filing season 2022.
• More callback options. The IRS offered callback options on 97% of the phone lines this filing season. The agency offered call back for over 4 million taxpayers this tax season, more than double the 1.8 million calls in 2023. This option, offered when phone lines were busy, saved taxpayers nearly 1.4 million hours of wait time on the phones.
• More in-person help. The IRS helped 170,000 more taxpayers in-person this filing season than in 2023. IRS employees at Taxpayer Assistance Centers (TACs) served 648,000 taxpayers this year, up from 474,000 in 2023, a 37% increase.
• Expanded in-person hours. The IRS added extended hours at 242 TAC locations across the nation, generating more than 11,000 extra service hours for taxpayers during the 2024 filing season. In addition to extended service hours, IRS also offered taxpayer assistance on Saturdays in more than 70 locations. These evening and Saturday hours made it more convenient for thousands of hard-working taxpayers to get help.
• Additional free help at volunteer sites. The IRS saw tax return preparation work at volunteer sites increase to more than 2.3 million returns this tax season, up 2000,000 from last year following work at Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites.
• More taxpayers file for free. In addition to volunteer sites, the IRS saw more taxpayers file for free this year; in all, there were over 450,000 more returns filed between volunteer sites, Direct File and Free File. The new Direct File pilot, offered on a limited basis in 12 states, generated more than 60,000 tax returns after opening widely in mid-March. At the same time, the IRS partnership with the Free File partners offering free private-sector software via IRS.gov saw growth with more than 2 million tax returns filed, an increase of 11.2% or more than 200,000 more Free File returns than 2023.
• Higher usage of IRS.gov. Driven by increased use of the expanded information on the “Where’s My Refund?” for the 2024 filing season, IRS.gov saw large increases in traffic. The website had nearly 500 million visits, an 18% increase. And “Where’s My Refund?” accounted for more than 275 million of those visits, up 62 million from 2023 representing a 29% increase.
• More chatbot use. The IRS saw more use of its virtual assistant tool on key IRS.gov pages. There were 832,000 uses this filing season, up nearly 150% from 330,000 uses in 2023. 

“These numbers illustrate the strength of this year’s filing season, but the IRS needs to continue working hard to make more improvements and continue transforming to serve taxpayers – not just through the April tax deadline but throughout the year and into the future,” Werfel said.

With the April deadline approaching, the IRS reminds taxpayers there are many ways to get last-minute help. They can visit the special “free help” page on IRS.gov.

For taxpayers who need an extension of time to file their taxes, there are several options to get an automatic extension through Oct. 15. Although an extension grants extra time to file, it does not extend the obligation to pay taxes due on April 15, 2024. To avoid penalties and late fees, taxpayers who owe should pay either their full tax bill or at least what they can afford to pay by the April 15 deadline.

The IRS estimates 19 million taxpayers will file for an automatic extension.

Taxpayers in Maine and Massachusetts have until April 17 to file and pay taxes due this year. This is because these states observe the Patriots’ Day holiday on April 15 this year and April 16 is the Emancipation Day holiday in the District of Columbia. 

Notice 2024-33 provides limited relief to CAMT taxpayers from the addition to tax under § 6655 of the Internal Revenue Code (Code) for failure to pay estimated income tax with respect to its CAMT liability under § 55 of the Code for the 2024 first quarterly installment of estimated income tax due on or before April 15, 2024 (or on or before May 15, 2024, for taxpayers with taxable years beginning in February 2024).

 

Notice 2024-33 will be in IRB:  2024-18, dated 04/29/2024.

WASHINGTON – The Department of Treasury and Internal Revenue Service today corrected Appendix A and Appendix B of Notice 2024-20 to add additional eligible census tracts for the qualified alternative fuel vehicle refueling property credit.

This correction reflects additional census tracts that were determined to meet the description of eligible census tracts in Notice 2024-20.

Appendix A was corrected to include:

02158000100    Alaska              Kusilvak/Wade Hampton
04019002704    Arizona             Pima
04019005200    Arizona             Pima
36053030101    New York          Madison
36053030102    New York          Madison
36053030200    New York          Madison
46102940500    South Dakota    Oglala Lakota County/Shannon
46102940800    South Dakota    Oglala Lakota County/Shannon
46102940900    South Dakota    Oglala Lakota County/Shannon

Appendix B was corrected to include:

17095000600    Illinois             Knox County
19145490300    Iowa                Page County
20181453700    Kansas            Sherman County

The Inflation Reduction Act amended the credit for qualified alternative fuel vehicle refueling property. The changes apply to qualified alternative fuel vehicle refueling property placed in service after Dec. 31, 2022, and before Jan. 1, 2033.

The credit amount for property not subject to depreciation is 30% of the cost of the qualified property placed in service during the tax year. The credit amount for depreciable property is 6% of the cost of the qualified property placed in service during the tax year but may be increased to 30% of the cost of the qualified property if the prevailing wage and apprenticeship requirements are met. The credit is limited to $100,000 for depreciable property and $1,000 for non-depreciable property.

Property must be placed in service in an eligible census tract to qualify for the credit. An eligible census tract is any population census tract that is a low-income community or any population census tract that is not an urban area.

More information about the alternative fuel vehicle refueling property credit may be found in the frequently asked questions.

 

Anyone who sold crypto, received it as payment or had other digital asset transactions needs to accurately report it on their tax return

The Internal Revenue Service reminds taxpayers they must answer the digital asset question and report all digital asset related income when they file their 2023 federal income tax return. Taxpayers should also keep these reporting guidelines in mind for 2024.

The question appears at the top of Forms 1040, Individual Income Tax Return; 1040-SR, U.S. Tax Return for Seniors; and 1040-NR, U.S. Nonresident Alien Income Tax Return, and was revised this year to update wording. The question was also added to these additional forms: Forms 1041, U.S. Income Tax Return for Estates and Trusts; 1065, U.S. Return of Partnership Income; 1120, U.S. Corporation Income Tax Return; and 1120-S, U.S. Income Tax Return for an S Corporation.

With appropriate variations tailored for corporate, partnership or estate and trust taxpayers, the digital asset question is:

At any time during 2023, did you:

(a) receive (as a reward, award or payment for property or services); or

(b) sell, exchange or otherwise dispose of a digital asset (or a financial interest in a digital asset)?

What is a digital asset?

A digital asset is a digital representation of value that is recorded on a cryptographically secured, distributed ledger or any similar technology. Common digital assets include:

• Convertible virtual currency and cryptocurrency.
• Stablecoins.
• Non-fungible tokens (NFTs).

Digital assets are treated as property for tax purposes, and general property tax principles apply to any of these transactions.

Everyone must answer the question correctly

Everyone who files Forms 1040, 1040-SR, 1040-NR, 1041, 1065, 1120 and 1120S must check one box answering either "Yes" or "No" to the digital asset question. The question must be answered by all taxpayers, not just by those who engaged in a transaction involving a digital asset in 2023.

When to check "Yes"

Normally, a taxpayer must check the "Yes" box if they:

• Received digital assets as payment for property or services provided;
• Received digital assets resulting from a reward or award;
• Received new digital assets resulting from mining, staking and similar activities;
• Received digital assets resulting from a hard fork (a branching of a cryptocurrency's blockchain that splits a single cryptocurrency into two);
• Disposed of digital assets in exchange for property or services;
• Disposed of a digital asset in exchange or trade for another digital asset;
• Sold a digital asset; or
• Otherwise disposed of any other financial interest in a digital asset.

Report digital asset income

In addition to checking the "Yes" box, taxpayers must report all income related to their digital asset transactions. For example, an investor who held a digital asset as a capital asset and sold, exchanged or transferred it during 2023 must use Form 8949, Sales and other Dispositions of Capital Assets, to figure their capital gain or loss on the transaction and then report it on Schedule D (Form 1040), Capital Gains and Losses. A taxpayer who disposed of any digital asset by gift may be required to file Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return.

If an employee was paid with digital assets, they must report the value of assets received as wages. Similarly, if they worked as an independent contractor and were paid with a digital asset, they must report that income on Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship). Schedule C is also used by anyone who sold, exchanged or transferred a digital asset to customers in connection with a trade or business.

Keep in mind that most income is subject to taxation. Failing to accurately report income may result in accrued interest and penalties. This includes various sources of income such as interest earnings, unemployment benefits and income derived from the service industry, gig economy and digital assets. For further details, consult Publication 525, Taxable and Nontaxable Income.

When to check "No"

Normally, a taxpayer who just owned digital assets during 2023 can check the "No" box as long as they did not engage in any transactions involving a digital asset during the year. They can also check the "No" box if their activities were limited to one or more of the following:

• Holding digital assets in a wallet or account;
• Transferring digital assets from one wallet or account they own or control to another wallet or account they own or control; or
• Purchasing digital assets using U.S. or other real currency, including through electronic platforms.

For a set of frequently asked questions (FAQs) and other details, visit the Digital Assets page on IRS.gov.