In order to determine whether a client is eligible for the recovery rebate credit (discussed in our post on January 12, 2021), practitioners must know the amount of economic impact payments (EIPs) received by the client in/around April 2020 and again beginning in January 2021. IRS Notice 1444 shows the amount of the first EIP and Notice 1444-B shows the amount of the second EIP. If a client ...
As discussed in our December 22, 2020 post, the Consolidated Appropriations Act of 2021 clarified that expenses paid with funds from the Paycheck Protection Program (PPP) are fully deductible, even though the loans were or will be forgiven. The law also clarifies that the adjusted basis of owners of entities with PPP loans will be increased by the tax-free income resulting from the forgiveness...
Practitioners who have clients that prefer to make certain tax payments using a paper check need to be aware of certain mailing address changes made by the IRS. Form 1040-V For residents of New York, Connecticut, New Jersey, Pennsylvania and certain other states, Form 1040-V, Payment Voucher, for the 2020 tax year is now mailed to: Internal Revenue ServiceP.O. Box 931000Louisville, KY 40293-1000...
While many are focusing on preparing applications for second draw loans under the Payroll Protection Program (PPP), the Small Business Administration has issued a revised form for requesting forgiveness for PPP loans that borrowers have already received. The revision to Form 3508S creates a one-page forgiveness application that requires no documentation to be attached for borrowers who received ...
In January 2021, New York State began sending interest payments to taxpayers who filed their 2019 New York personal income tax returns after April 15, 2020 and on or before July 15, 2020. As discussed in our September 1, 2020 post, the IRS made similar interest payments that occurred much earlier and during 2020. Since taxpayers are receiving the New York interest payments in 2021, the payme...
The IRS has issued final instructions for the 2020 version of Form 1040, which contain an updated worksheet for the recovery rebate credit. (The recovery rebate credit appears on line 30 of the 2020 version of Form 1040.) The new format includes reference to both the economic impact payments that were sent to taxpayers starting in April 2020 (EIP #1) and the economic impact payments that wer...
Rules for Second Draw PPP Loans: The Small Business Administration (SBA) has issued new rules related to the 2nd round of the Payroll Protection Program (PPP). The PPP is discussed on pages 23 to 29 of the Tax Year 2020 M+O=CPE Individual Tax Year-End Workshop Reference Book. The new rules refer to loans received under the first round of the PPP as first draw PPP loans, and they refer to loans...
After initially releasing final instructions for Form IT-558, New York State Adjustments due to Decoupling from the IRC, New York has issued revised instructions that remove some of the adjustment codes that were contained in the earlier version of the form. As a result of the change, the following adjustment codes have been eliminated, and these adjustments are not required to be made on Form...
The IRS has released the 2021 standard mileage rate. For business travel, it is 56 cents per mile (down from 57½ cents in 2020). For medical-related travel, it is 16 cents per mile (down from 17 cents in 2020). The rate for charitable use of an automobile is not subject to adjustment, and it remains 14 cents per mile. ...
The House of Representatives and the Senate both passed the Consolidated Appropriations Act of 2021 on December 21, 2020, and the President is expected to sign it into law. While the main purpose of the Act is funding the federal government through the end of the government’s current fiscal year, it includes many tax-related provisions. The Act allows a deduction for expenses paid with PPP...
