LOANS: what you need to know
A three-week late start to the IRS tax filing season was just one of the many changes we would see in the 2020 tax season affecting taxpayers this year. Below is a list of other changes and information you should be aware of, even for some registrants who have already filed their return.
Many loaners received the first of three payments in the spring of 2020. The second that was paid to taxpayers on the first of the year in 2021 was included in the calculation of the clawback refund credit, a new credit advance for 2020 The third stimulus payment that many taxpayers have recently received and are still waiting for is a payment of $ 1,400 for eligible taxpayers, which will be reconciled in 2021 tax returns. , but who qualify based on their 2020 returns, may be eligible for additional credit upon filing. You can check https://bridgepayday.com/ for more loan informations
- Taxable unemployment benefits
The month of March brought several mid-season changes that affect many current and already filed returns. For individuals and married couples with adjusted gross income less than $ 150,000, up to $ 10,200 in benefits are excluded from federal taxable income. The same does not apply to the state of Idaho. Idaho requires that these benefits be added back to taxable income for state reporting purposes. The IRS expects to send refunds starting in May for the adjustment to previously filed returns, which have included a non-taxable portion of unemployment benefits. No amended declaration is required.
- Excess premium tax credit
Some may have been eligible for the Advance Premiums Tax Credit to help with the cost of health insurance premiums through the Affordable Care Act. If more credit has been received than eligible, taxpayers are generally required to repay that amount. With the changes announced in mid-March, this is yet another element that could affect returns already filed. The IRS has yet to announce how it will handle the correction of previously submitted returns, but said more information was to come and does not submit an amended return at this time.
This is a specific change to the 2021 returns, but some could see benefits in the coming months. The credit for children under 18 (also a change from the previous age of 17) will increase from $ 2,000 per eligible child to $ 3,000. For any child under 6, the credit will go up to $ 3,600. It is not yet clear how the IRS will deploy this, but they expect to be able to make some of this 2021 tax credit payable in monthly installments as an advance credit in the months to come.
While the federal government announced in mid-March that there would be some tax-exempt income, the state of Idaho took a few extra weeks to notify which sections they would comply with. Income from SBA Paidcheck Protection Program (SBA) Loans, SBA Economic Disaster Loans, EIDL Grants, and Advanced Recovery Remission Credit (Stimulus Payments) are all tax exempt at the Federal and State level. States. Rebound Idaho grants of up to $ 10,000 are included in federal income, but Idaho exempt. This and the canceled PPP loans was a late compliance decision by Idaho, and an amended statement may have to be filed if you had any of these before Idaho’s March 23 announcement.
A final and essential change was the IRS approval of an extension of the filing and payment deadline until May 17 for the 2020 tax season only and only for 1040 individual filers. This change has also been made. recently extended to deadlines for making contributions to Individual Retirement Accounts (IRA) and Health Savings Accounts (HSA). This new deadline does not apply to non-1040 filers such as corporate, estate and trust filings, nor to estimated payments due on April 15. The Idaho State Tax Commission announced on March 25 that it would also adhere to the change to the May 17 filing deadline. This change also applies to property tax reduction requests (circuit breaker) normally due on April 15.
The 2021 returns will see additional changes to the tax rules regarding the earned income credit, dependent care credit, premium tax credit, and many other areas too many to list here. If you have any questions about how these or any other changes might affect you, or if you think you may need to amend a return due to some of the above changes, contact your CPA or tax preparer to acquire help.