DebraMyersCPA.com
DebraMyersCPA.com

News

COVID19 Tax Return Filing Payment Relief
pdf format
COVID19 Tax Return Filing Payment Relie[...]
Adobe Acrobat document [79.2 KB]
IRS unveils new People First Initiative
pdf format
IRS unveils new People First Initiative.[...]
Adobe Acrobat document [3.6 MB]

The IRS has announced that they will begin accepting and processing all individual returns on Monday, January 28. Returns transmitted to Drake before this date are being held in a queue and will be transmitted to the IRS in the order they were received.

When the IRS starts processing returns, acknowledgments may be unpredictable due to the high volume of returns being processed.

 

Issue Number:    IR-2020-62

Inside This Issue


IRS: Employee Retention Credit available for many businesses financially impacted by COVID-19

WASHINGTON — The Treasury Department and the Internal Revenue Service today launched the Employee Retention Credit, designed to encourage businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.

Does my business qualify to receive the Employee Retention Credit?

The credit is available to all employers regardless of size, including tax-exempt organizations. There are only two exceptions: State and local governments and their instrumentalities and small businesses who take small business loans.

Qualifying employers must fall into one of two categories:

  1. The employer’s business is fully or partially suspended by government order due to COVID-19 during the calendar quarter.
  2. The employer’s gross receipts are below 50% of the comparable quarter in 2019. Once the employer’s gross receipts go above 80% of a comparable quarter in 2019, they no longer qualify after the end of that quarter.

These measures are calculated each calendar quarter.

How is the credit calculated?

The amount of the credit is 50% of qualifying wages paid up to $10,000 in total. Wages paid after March 12, 2020, and before Jan. 1, 2021, are eligible for the credit. Wages taken into account are not limited to cash payments, but also include a portion of the cost of employer provided health care.

How do I know which wages qualify?

Qualifying wages are based on the average number of a business’s employees in 2019.

Employers with less than 100 employees: If the employer had 100 or fewer employees on average in 2019, the credit is based on wages paid to all employees, regardless if they worked or not. If the employees worked full time and were paid for full time work, the employer still receives the credit.

Employers with more than 100 employees:  If the employer had more than 100 employees on average in 2019, then the credit is allowed only for wages paid to employees who did not work during the calendar quarter.

I am an eligible employer. How do I receive my credit?

Employers can be immediately reimbursed for the credit by reducing their required deposits of payroll taxes that have been withheld from employees’ wages by the amount of the credit.

Eligible employers will report their total qualified wages and the related health insurance costs for each quarter on their quarterly employment tax returns or Form 941 beginning with the second quarter. If the employer’s employment tax deposits are not sufficient to cover the credit, the employer may receive an advance payment from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19.

Eligible employers can also request an advance of the Employee Retention Credit by submitting Form 7200.

Where can I find more information on the Employer Retention Credit and other COVID-19 economic relief efforts?

Updates on the implementation of this credit,  Frequently Asked Questions on Tax Credits for Required Paid Leave and other information can be found on the Coronavirus page of IRS.gov.

 

Be Alert to Scammers Who Pose as the IRS

Scammers pretending to be from the IRS continue to target taxpayers. These scams take many different forms. Among the most common are phone calls and fake emails. Thieves use the IRS name, logo or a fake website to try and steal money from taxpayers. Identity theft can also happen with such scams.

Taxpayers need to be cautious of phone calls or automated messages from scammers who claim to be from the IRS. These criminals often say the taxpayer owes money. They also demand immediate payment. Scammers also lie to taxpayers and say they are due a refund. They do this to lure their victims into giving their bank account information over the phone. The IRS warns taxpayers not to fall for these scams.

Below are tips that will help avoid becoming a victim during the summer months and throughout the year:

The IRS will NOT:

  • Call to demand immediate payment using specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS first mails a bill to taxpayers who owe taxes. If the IRS assigns a case to a Private Debt Collector (PCA), both the IRS and the authorized collection agency send a letter to the taxpayer. Payment is always to the United States Treasury.
  • Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
  • Demand payment of taxes without giving the taxpayer the opportunity to question or appeal the amount owed.
  • Ask for credit or debit card numbers over the phone.

If a taxpayer does not owe any tax, they should:

If a taxpayer is not sure whether they owe any tax, they can view their tax account information on IRS.gov to find out.

Taxpayers should also watch out for emails and websites looking to steal personal information. An IRS phishing scam is an unsolicited, bogus email that claims to come from the IRS. Criminals often use fake refunds, phony tax bills or threats of an audit. Some emails link to fake websites that look real. The scammers’ goal is to lure victims to give up their personal and financial information. If they’re successful, they use it to steal a victim’s money and their identity.

For  taxpayers who get a ‘phishing’ email, the IRS offers this advice:

  • Don’t reply to the message.
  • Don’t give out personal or financial information.
  • Forward the email to phishing@irs.gov. Then delete it.
  • Do not open any attachments or click on any links. They may have malicious code that will infect your computer.

More information on how to report phishing or phone scams is available on IRS.gov/phishing.

Avoid scams. The IRS does not initiate contact using social media or text message. The first contact normally comes in the mail. Those wondering if they owe money to the IRS can view their tax account information on IRS.gov to find out.

 

 

Print Print | Sitemap
© DebraMyersCPA.com