Blog Archives

Update for those who filed pre-March with unemployment!

3/31/2021

Hi folks! Big announcement from the IRS about how they will be handling returns filed before the delightful retroactive tax law change!

They will be automatically adjusting returns and starting to issue refunds in May (they are doing single people first, then married). For a lot of you, that will be sufficient! But for a lot of you it will not, because your reduced income might qualify you for new credits etc, and some of you might want to also amend your state return.

After May 17, I will start going through all the previously filed returns and checking into what your new total should be. I will send you an email checking in with you about how much you got from the IRS and if it matches what I think you should get, great! If it does not, then we will amend and get you more money. There are about 100 of you, so it's going to take me at least a month to get to everybody. Please don't email me unless you haven't heard from me by July 1, I will get to you as soon as I can!

Make sure your address is updated with the IRS - they will probably use your bank account if they have it, but if not they will be mailing checks.

Link to IRS press release: https://www.irs.gov/newsroom/irs-to-recalculate-taxes-on-unemployment-benefits-refunds-to-start-in-may

There have yet to be any announcements (or any guidance at all) about those of you with Health Care Tax Credit issues - my bet is we will need to amend those. I don't even have a patch to file those currently, but hopefully I will get that soon.

State Update

3/21/2021

So the federal law changing unemployment has thrown the state returns into chaos. States that tax unemployment are now having to decide to conform or not, and the extension gives them a little time to decide. I am recommending a 2 week moratorium on filing most states, and I will re-evaluate the situation on April 5. (PA and NJ are mostly unaffected, and so might be able to be filed now)

We can file the federal, there will be no more federal changes. And I know that because you can only use reconciliation so many times a year, and there is no way Republicans would agree to do anything and give 60 votes.

Almost all states have conformed to the new May 17 deadline. Here are the states that have NOT as of today's update, 3/26: Hawaii, Idaho, Iowa, and Ohio.

NY has also extended the deadline! And other news

3/19/2021

States are moving to extend their deadlines to May 17 to match the IRS. NY and CA have announced they are extending as well. No word on NJ, or other states, but they probably will too.

The new patch I got has fixed the federal, but now the states are, to put it mildly, FUBAR. I am not advising filing states until things get fixed and sorted, but at least we can get your federal done, and hopefully with the new law that means a big refund for you!

There are new reports floating around that the IRS is going to automatically issue refunds for already filed returns with unemployment, but no official word yet, and that's to say nothing of any state changes.

I am very very frustrated with the constant changes and uncertainty, but I will keep on working to try and get things done for you as soon as I can! Just hang in there, and wait for an email from me if I need any action from you.

I GOT THE PATCH!

3/18/2021

WOO! I am now starting on the returns that have been on hold waiting for the new unemployment rules, it will probably take me a week or so, so hang tight and I will get to you shortly!

No word on amendments yet, so sit tight on those!

EDIT: At this time, I am advising that you MIGHT want to hold off on filing any states. Now that we have until May 17, assuming states conform to the date, especially if you owe you might want to see if any states also conform to the treatment of unemployment. NY doesn't have anything official, but some state legislators have expressed interest and the governor has expressed support. You might want to give them a couple weeks to see if they do anything concrete. But we can file your Federal now!

Updates

3/17/2021

Today the IRS extended the tax deadline to May 17, giving us an extra month. Here's where we are:

1. We don't have any info about what states will do yet, last year they all conformed to the new date, but if any do not I will keep you apprised. Right now I'm assuming most will. If any states, particularly NY, don't conform, I will contact people about filing or extending.

2. At the moment, there is no extra time for IRA contributions, so if you are planning on doing a 2020 IRA contribution it still needs to be done before April 15. Same if you are hoping to claim a refund for 2017, you need to file by April 15. Estimated payments for first quarter are still due April 15.

3. If you are on hold with me because you have unemployment or payback of health insurance credits, keep hanging tight. I have yet to get a software patch to file these returns, but hopefully I will soon, and once I do I will start working through the backlog and getting you filed. You will get an email from me confirming your amounts and debits etc, then you will sign the efile docs and be filed. There is no need to email me, I will start working on these returns as soon as I get the patch. This extra month gives me some breathing room :) I will update here once I get the patch.

4. If you already filed, keep hanging tight, the IRS is not accepting amended returns yet and is telling people and preparers to hold off until they issue more guidelines. There is some talk of not needing to amend, of the IRS just issuing refunds, but we shall see. Again, no need to email me, I will be going through every filed return if amendments are necessary once the IRS starts accepting them. I will update here as things develop.

5. If you haven't filed yet, continue on as normal! I have extended available appointments through May 17, but I have slowed my pace a little to give me a break and to give me time to work on the backlog of unfiled unemployment returns, but there's no reason to hold off. If you have unemployment you will be on hold til I get the patch, but your return will be done and ready to go as soon as possible.

So to sum up, we're still waiting, but now we hopefully have a little more time!

I am really looking forward to things calming down and things not changing every 5 seconds!!!

Stimulus Note

3/14/2021

Hi folks! Some potential good news about the $1400 stimulus if you haven't filed 2020 yet! If you qualify based on 2020 but not 2019, when you file your 2020 tax return the IRS will send you your stimulus as long as you file within 90 days of the tax deadline. So even if you don't get your check in this first round going out, you will get it once you file as long as you file in a timely manner, you will NOT have to wait all the way til next year! So get filing!

Unemployment News and Stimulus Updates

3/5/2021

UPDATE: The stimulus has now been signed into law. There are LOT of provisions in it, but the most important for me are these 3:

1. The first $10,200 of unemployment is retroactively exempt from Federal taxation.

2. If you would have had to repay Health Insurance Premium Tax Credits for 2020, you now do not. Just for this year.

3. New stimulus checks for $1400 per person on a tax return. This is an advance 2021 tax credit, but it will go out based on the most recent return on file, 2019 or 2020. If you do not qualify based on that return but do based on 2021, you will get your $1400 when you file 2021. You will not have to repay it if you get it despite not qualifying based on 2021. Like the last stimulus, it's going out right away to whatever bank account or address is on file, and if there is any error you may have to do a payment trace, or wait til next year.

So what happens now?

If you have not yet filed, continue as normal, and I will hold your return if you have unemployment or payback of premium tax credits until the IRS issues guidelines and I get a software patch. That might be a couple of weeks. Please do not delay your appt or sending me your info, as of 3/11 there has not been an extension of tax season. 80% of my clients got unemployment, if you all wait then I will run out of space! If we get an extension and get some breathing room, I will update this post!

If you have already filed with me and you had unemployment or paid back health insurance credits (and thus would be affected by this), we will have to amend your return. I won't charge for the amendment and it should be fairly easy, its just a matter of logistics and getting through everyone. Obviously during tax season is not an ideal time for me to amend, so I will likely dedicate a small amount of time each day to doing a few until I get through them all, which also might take a while, but I will get to everyone eventually.

At the moment, this does NOT affect any state returns.

There is a LOT of other stuff in this bill, especially regarding Marketplace insurance and child credits, but I will have deal with that later! :) That all applies to 2021.

Hang tight, be patient, and watch this blog for news!