by | Aug 5, 2021 | Tax Tips and News
The Internal Revenue Service has updated its guidance on expanded paid sick and family leave tax credits available to employers who provide the leave to their workers. Put in place by the American Rescue Plan Act of 2021, also known as ARP, the credits permit eligible employers to be reimbursed for providing paid sick and family leave to their employees for COVID-19-related reasons.
The IRS has revised its frequently asked questions (FAQs) on the credits to clarify that eligible leave now includes that taken by employees to accompany a family member or another member of their household to get immunized against COVID-19, or to care for them as they recover from an immunization. This expanded eligibility is also extended to credits for self-employed taxpayers.
Coverage was extended by the American Rescue Plan.
The expansion of the paid leave tax credit is the latest improvement in an effort that started in 2020 with the Families First Coronavirus Response Act (FFCRA). While “the tax credits under the FFCRA, as amended and extended by the Tax Relief Act, covered leave taken beginning April 1, 2020, through March 31, 2021,” the IRS notes that ARP has further extended the credit to apply to leave taken from April 1, 2021 to September 30, 2021.
Additionally, under the American Rescue Plan, eligible employers include businesses and tax-exempt organizations that have fewer than 500 employees. Employers deemed eligible can claim tax credits for qualified leave wages and some wage-related expenses, including health plan expense and some benefits obtained through collective bargaining.
How do I learn more about the credit?
The newly expanded IRS FAQs explain how employers can claim the paid sick and family leave credits, as well as how to file for the credits and how to calculate applicable credit amounts. The FAQs also detail how employers can get advance payments or refunds of the credits.
The IRS closes the release by reminding self-employed taxpayers that they can “claim comparable credits on Form 1040, US Individual Income Tax Return.”
Source: IR-2021-160
– Story provided by TaxingSubjects.com
by | Aug 1, 2021 | Tax Tips and News
Tax professionals are a frequent target for identity thieves and cybercriminals, who are interested in accessing client tax records and, in some cases, the software used to file tax returns. The second week of the Security Summit’s “Protect Your Clients; Protect Yourself” campaign focuses on helping taxpayers protect their return by highlighting the benefits of an IP PIN.
The biggest hurdle is getting taxpayers to understand why they need an IP PIN and how they apply for one. While tax pros can’t complete the registration process for their clients, they can explain the benefits and process.
What is an IP PIN?
The IRS lists six tips for anyone considering an IP PIN:
- It’s a six-digit number known only to the taxpayer and the IRS.
- The opt-in program is voluntary.
- The IP PIN should be entered onto the electronic tax return when prompted by the software product or onto a paper return next to the signature line.
- The IP PIN is valid for one calendar year; taxpayers must obtain a new IP PIN each year.
- Only dependents who can verify their identities may obtain an IP PIN.
- IP PIN users should never share their number with anyone but the IRS and their trusted tax preparation provider. The IRS will never call, email or text a request for the IP PIN.
For late or extension filers, there’s still time to get an IP PIN for this year’s return. That said, those who have already filed but want to protect next year’s return will be able to apply for a PIN this coming January. Luckily, the IP PIN registration process is relatively straightforward for most taxpayers.
How do taxpayers sign up for an IP PIN?
The IRS says that those with secure Internet access should first consider the Get an IP PIN tool on IRS.gov. Users will need to have some personal information at hand when registering:
- Email address
- Social Security Number (SSN) or Individual Tax Identification Number (ITIN)
- Tax filing status and mailing address
- One financial account number linked to your name:
- Credit card – last 8 digits (no American Express, debit or corporate cards) or
- Student loan – (Enter the student loan account number provided on your statement. The account number may contain both numbers and letters. Do not include any symbols.) Additionally, we can’t verify student loans issued by Nelnet. or
- Mortgage or home equity loan or
- Home equity line of credit (HELOC) or
- Auto loan
- Mobile phone linked to your name (for faster registration) or ability to receive an activation code by mail
Since this info is required to verify online users’ identity, the agency suggests checking out the IRS.gov page detailing the Secure Access process: “Secure Access: How to Register for Certain Online Self-Help Tools.” Those preferring an analogue approach who make up to $72,000 a year can always file Form 15227, Application for an Identity Protection Personal Identification Number.
Here are a few more IP PIN-related links that taxpayers may find helpful:
Source: IR-2021-158
– Story provided by TaxingSubjects.com
