WASHINGTON — The Treasury Department and the Internal Revenue Service today provided tax relief for certain taxpayers affected by the COVID-19 pandemic involved in new markets tax credit transactions.

The taxpayers receiving relief through today's guidance are community development entities (CDEs) and qualified active low-income community businesses (QALICBs) investing and conducting businesses in low-income communities.

Notice 2020-49 (PDF) provides a CDE or QALICB with relief for certain specified time-sensitive acts that are due to be performed between April 1, 2020, and Dec. 31, 2020, in order to meet requirements under section 45D of the Internal Revenue Code and its regulations. A CDE or QALICB may perform these acts by Dec. 31, 2020. The additional time is provided for the following time-sensitive acts:

Making investments

If a CDE is due to invest cash received in a qualified low-income community investment (QLICI) on or after April 1, 2020, and before Dec. 31, 2020, that cash investment is treated as invested in a QLICI to the extent it is invested by Dec. 31, 2020.

Reinvestments

If a CDE is due to reinvest certain amounts of cash or payment in a QLICI on or after April 1, 2020, and before Dec. 31, 2020, the amounts are treated as continuously invested in a QLICI to the extent the amounts are so reinvested by Dec. 31, 2020.

Expending amounts for construction of real property

If a QALICB is due to expend the proceeds of a capital or equity investment or loan by a CDE for construction of real property on or after April 1, 2020, and before Dec. 31, 2020, such proceeds are treated as a reasonable amount of working capital of the QALICB if so expended by Dec. 31, 2020.

Additional information about tax relief for businesses affected by the COVID-19 pandemic can be found on IRS.gov.

Notice 2020-49 postpones to December 31, 2020, the due dates for making investments, making reinvestments, and expending amounts for construction of real property under § 45D of the Internal Revenue Code (Code) due to be performed or expended on or after April 1, 2020, and before December 31, 2020. 

Revenue Procedure 2020-16 provides an automatic procedure for a State or local government in which an empowerment zone is located to extend the empowerment zone designation made under section 1391(a) of the Internal Revenue Code (Code).  Specifically, the automatic procedure under section 3.01 of this revenue procedure provides that a State or local government that nominated an empowerment zone is deemed to extend until December 31, 2020, the termination date designated by that State or local government in its empowerment zone nomination (designated termination date), as described in section 1391(d)(1)(B).  Section 3.02 of this revenue procedure provides a procedure for such State or local government to decline this deemed extension of its designated termination date.

It will be published in IRB 2020-27, dated Monday 06/29/2020.

WASHINGTON – The Internal Revenue Service today provided guidance for employers whose employees forgo sick, vacation or personal leave because of the COVID-19 pandemic.

Notice 2020-46 provides that cash payments employers make to charitable organizations that provide relief to victims of the COVID-19 pandemic in exchange for sick, vacation or personal leave which their employees forgo will not be treated as compensation. Similarly, the employees will not be treated as receiving the value of the leave as income and cannot claim a deduction for the leave that they donated to their employer.

Employers, however, may deduct these cash payments as a business expense or as a charitable contribution deduction if the employer otherwise meets the respective requirements of either section. 

Notice 2020-46 provides further details for employers with leave donation programs.

Additional information about tax relief for those affected by the COVID-19 pandemic can be found on IRS.gov.

Notice 2020-46 provides guidance under the Internal Revenue Code on the federal income and employment tax treatment of cash payments made by employers under leave-based donation programs to aid victims of the ongoing Coronavirus Disease 2019 (COVID-19) pandemic as described in the notice.  The notice provides that cash payments employers make to charitable organizations that provide relief to victims of the COVID-19 pandemic in exchange for sick, vacation, or personal leave which their employees forgo will not be treated as wages (or compensation, as applicable).

Notice 2020-46 will be in IRB:  2020-27, dated June 29, 2020.

WASHINGTON — As the July 15 tax-filing deadline − postponed from April 15 − draws near, the Internal Revenue Service is reminding all taxpayers who have yet to file their 2019 federal tax return to file electronically now, choose direct deposit for their refund, or pay any tax owed electronically.

Taxpayers who owe for tax year 2019 or need to pay 2020 estimated taxes originally due for the first quarter on April 15 or the second quarter on June 15 can schedule an electronic payment up to the July 15 due date.

The IRS continues to process electronic tax returns, issue direct deposit refunds and accept electronic payments. As of May 29, the IRS received over 133.8 million tax returns and issued over $250.9 billion in refunds.

Taxpayers should use electronic options to support social distancing and speed the processing of tax returns, refunds and payments. IRS.gov has a variety of options to help taxpayers.

Most taxpayers that usually have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020 − including individuals, trusts, estates, corporations and other non-corporate tax filers − qualify for the postponed due date. This means that anyone, including Americans who live and work abroad, now have until July 15 to file their 2019 federal income tax return and pay any tax due. A list of forms due July 15 is on the Coronavirus Tax Relief: Filing and Payment Deadlines page.

File electronically for free

Taxpayers whose income was $69,000 or less last year are eligible to use IRS Free File software. There are also Free File Fillable Forms, an electronic version of IRS paper forms. It has no income limitations. Free File options are available at IRS.gov/freefile.

2016 file for unclaimed refunds – deadline postponed to July 15

For 2016 tax returns, the normal April 15 deadline to claim a refund is now July 15, 2020. The law provides a three-year window of opportunity to claim a refund. If taxpayers do not file a return within three years, the money becomes property of the U.S. Treasury. The law requires taxpayers to properly address, mail and ensure the tax return postmark is July 15, 2020, or sooner.

Choose direct deposit for refunds

The safest and fastest way for taxpayers to get their refund is to have it electronically deposited into their bank or other financial account. Taxpayers can use direct deposit to deposit their refund into one, two or even three accounts. Direct deposit is much faster than waiting for a paper check to arrive in the mail.

After filing, use “Where’s My Refund?” on IRS.gov or download the IRS2Go Mobile App to track the status of a refund.

Schedule a payment electronically

Taxpayers can file now and schedule their federal tax payments up to the July 15 due date. They can pay online, by phone or with their mobile device and the IRS2Go app. When paying federal taxes electronically taxpayers should remember:

Request an extension of time to file a tax return electronically

Taxpayers who need more time to prepare their federal tax return should be aware that:

Individual tax filers, regardless of income, can use IRS Free File to electronically request an automatic tax-filing extension. Filing this form gives the taxpayer until Oct. 15 to file a federal tax return. To get the extension, the taxpayers must estimate their tax liability on the extension form and should pay any amount due.

Alternatively, taxpayers can get an extension by paying all or part of their estimated income tax due and indicate that the payment is for an extension using Direct Pay, the Electronic Federal Tax Payment System (EFTPS), or a credit or debit card. This way the taxpayer won’t have to file a separate extension form and will receive a confirmation number for their records.

Get answers to tax questions

Taxpayers may find answers to many of their questions using the Interactive Tax Assistant (ITA), a tax law resource that works using a series of questions and responses. IRS.gov has answers for Frequently Asked Questions. The IRS website has tax information in: Spanish (Español); Chinese (中文); Korean (한국어); Russian (Pусский); Vietnamese (Tiếng Việt); and Haitian Creole (Kreyòl ayisyen).

For more information go to IRS.gov/COVIDtaxdeadlines.

Notice 2020-47 contains the annual Priority Guidance Plan solicitation.

Notice 2020-47 will be in IRB: 2020-27, dated 06/29/2020.

WASHINGTON – The Internal Revenue Service reminds taxpayers that estimated tax payments for tax year 2020, originally due April 15 and June 15, are now due July 15. This means that any individual or corporation that has a quarterly estimated tax payment due has until July 15 to make that payment without penalty. 

In response to the COVID-19 outbreak, the Treasury Department and the Internal Revenue Service are providing special tax filing and payment relief to individuals and businesses. This relief applies to federal income tax returns and tax payments (including tax on self-employment income) otherwise due April 15, 2020. This relief does not apply to state tax payments or deposits or payments of any other type of federal tax.

Who needs to pay quarterly?

Most often, self-employed people, including many involved in the sharing economy, need to pay quarterly installments of estimated tax. Similarly, investors, retirees and others often need to make these payments. That's because a substantial portion of their income is not subject to withholding. Other income generally not subject to withholding includes interest, dividends, capital gains, alimony and rental income.

Special rules apply to some groups of taxpayers, such as farmers, fishermen, casualty and disaster victims, those who recently became disabled, recent retirees and those who receive income unevenly during the year.

Taxpayers can avoid an underpayment penalty by owing less than $1,000 at tax time or by paying most of their taxes during the year. Generally, for 2020 that means making payments of at least 90% of the tax expected on their 2020 return.

Taxes are pay-as-you-go

This means taxpayers need to pay most of their taxes owed during the year as income is received. There are two ways to do that:

Tax Withholding Estimator

If a taxpayer receives salaries and wages, they can avoid having to pay estimated tax by asking their employer to withhold more tax from their earnings. To do this, they would file a new Form W-4.

If a taxpayer receives a paycheck, the new and improved Tax Withholding Estimator can help them make sure they have the right amount of tax withheld from their pay. The tool is now more mobile friendly and replaces the Withholding Calculator on IRS.gov. The Tax Withholding Estimator offers workers, as well as retirees, self-employed individuals and other taxpayers a clear, step-by-step method for effectively checking their withholding to protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year.

How to pay estimated taxes

Form 1040-ES, Estimated Tax for Individuals, includes instructions to help taxpayers figure their estimated taxes. They can also visit IRS.gov/payments to pay electronically. IRS offers two free electronic payment options where taxpayers can schedule their estimated federal tax payments up to 30 days in advance with Direct Pay or up to 365 days in advance with the Electronic Federal Tax Payment System (EFTPS).

IRS.gov assistance 24/7

Tax help is available 24/7 on IRS.gov. The IRS website offers a variety of online tools to help taxpayers answer common tax questions. For example, taxpayers can search the Interactive Tax Assistant, Tax Topics, Frequently Asked Questions, and Tax Trails to get answers to common questions.

More COVID-19 information

The IRS will post frequently asked questions on IRS.gov/coronavirus and will provide updates as soon as they are available.

WASHINGTON – The Internal Revenue Service today released proposed regulations addressing the treatment of certain medical care arrangements under section 213 of the Internal Revenue Code.
 
Section 213 of the Code allows individuals to take an itemized deduction for expenses for medical care, including insurance for medical care, to the extent the expenses exceed 7.5% of adjusted gross income. 
 
The proposed regulations address direct primary care (DPC) arrangements and health care sharing ministry (HCSM) memberships, and provide the following guidance:

The proposed regulations respond to Executive Order 13877, which directs the Secretary of the Treasury, to the extent consistent with law, to “propose regulations to treat expenses related to certain types of arrangements, potentially including direct primary care arrangements and healthcare sharing ministries, as eligible medical expenses under Section 213(d)” of the Code.

Notice 2020-44 provides that the adjusted applicable dollar amount that applies for determining the PCORTF fee for policy years and plan years ending on or after October 1, 2019 and before October 1, 2020 is equal to $2.54. This adjusted applicable dollar amount has been determined using the percentage increase in the projected per capita amount of the National Health Expenditures published by HHS in February 2019.  Sections 4375 and 4376, added to the Code by the Affordable Care Act, impose a fee on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans to help fund the Patient-Centered Outcomes Research Trust Fund (PCORTF). This notice addresses the recent extension of the fee by the Further Consolidated Appropriations Act, 2020, Public Law 116-94, and provides relief for calculating the average number of lives for policy years and plan years that end on or after October 1, 2019, and before October 1, 2020.

Notice 2020-44 will be in IRB:  2020-26, dated 6/22/20.