In response to the COVID-19 pandemic, federal and state governments have made decisions that may impact your income and tax filings. Please pay careful attention to the different deadlines for Idaho state and federal filings below -- they are about a month apart.
Additionally, my office has received many questions about the direct Economic Impact Payments from the CARE Act. Answers to your questions are below, and please feel free to continue sending questions our way-- we are here to serve you.
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Federal Tax Deadline
The Treasury Department and Internal Revenue Service (IRS) announced that the federal income tax filing due date has been extended from April 15, 2020, to July 15, 2020.
Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts, estates, corporations, and other non-corporate tax filers as well as those who pay self-employment tax.
Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing.
Idaho Tax Deadline
In response to the COVID-19 pandemic, Governor Little extended the 2019 Idaho income tax filing and payment deadlines from April 15, 2020, to June 15, 2020. The extension applies to all taxpayers – including individuals, businesses, and entities – regardless of the amount owed. Penalty and interest won’t apply if taxpayers file their return and pay the income tax they owe by June 15.
Governor Little has also extended the deadline to apply for property tax relief programs from April 15 to June 15.
Do I need to file a 2019 return to see any direct payments?
No. If you have filed a 2019 return, the IRS will use that information. If you haven’t filed your taxes for 2019, then the IRS will use your 2018 return. It is tracked by Social Security Number; only those with a Social Security Number qualify for direct payments.
Do Seniors need to file a tax return to see any direct payments?
No. The U.S. Department of the Treasury and the IRS have announced that Social Security beneficiaries who are not typically required to file tax returns will not need to file an abbreviated tax return to receive an Economic Impact Payment.
The IRS will use the information on the Form SSA-1099 and Form RRB-1099 to generate $1,200 Economic Impact Payments to Social Security recipients who did not file tax returns in 2018 or 2019. Recipients will receive these payments as a direct deposit or by paper check, just as they would normally receive their benefits.
Does the direct payment count as income? And, do I have to pay taxes on it?
No. All direct payments are tax free.
What should I do if I did not file a tax return for 2019 or 2018 (but I am required to do so)?
The best way to ensure you receive a direct payment, also known as Economic Impact Payments, is to file a 2019 tax return if you have not already done so, and are required to. This could be accomplished for free online from home using the IRS Free File program. The IRS will also be engaging in a public campaign to alert all individuals of their eligibility for the payments and how to receive it if they have not filed either a 2019 or 2018 tax return.
If I have a past due debt to a federal or state agency, or owe back taxes, will my rebate be reduced?
No, the bill turns off nearly all administrative offsets that ordinarily may reduce tax refunds for individuals who have past tax debts, or who are behind on other payments to federal or state governments, including student loan payments.
The only administrative offset that will be enforced applies to those who have past due child support payments that the states have reported to the Treasury Department.
My income has drastically changed from tax year 2018, how do I correct that?
Direct payments will utilize your 2019 tax return or 2018 return if you have not yet filed your 2019 tax return. Individuals will receive $1,200 and joint filers can receive $2,400 if you make up to $75,000 in Adjusted Gross Income (AGI) for individuals and $150,000 in AGI for joint filers. There is an additional $500 for each child. The payment reduces if you make more than $75,000 in AGI as an individual or $150,000 AGI as a joint filer, zeroing out by $99,000 in AGI for individuals and $198,000 for joint filers.
I receive federal benefits and was not required to file a tax return in 2018 or 2019. How can I make sure receive the extra $500 per eligible child dependent?
Those receiving federal benefits – including Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, Supplemental Security Income (SSI) or Veterans Administration benefits – who have children and who weren’t required file a tax return in 2018 or 2019 should visit the Non-Filer: Enter Payment Info Here tool on IRS.gov. By quickly taking steps to enter information on the IRS website about them and their qualifying children, they can receive the $500 per dependent child payment automatically in addition to their $1,200 individual payment. Otherwise, their payment at this time will be $1,200 and, by law, the additional $500 per eligible child amount would be paid in association with a return filing for tax year 2020.
I want to help by donating. What kind of deduction do I get if I donate a couple of hundred dollars to a needy cause?
- The CARES Act allows Americans to deduct up to $300 in cash contributions in what are called "above the line" deductions. This means a person who contributes up to $300 to a charity can then lower their Adjusted Gross Income (AGI) by $300, paying taxes on an AGI that is $300 less.
- Normally, people have to itemize, using a Schedule A Form. The person can take the $300 off the top whether they itemize or not. A person making $86,300 would pay taxes on $86,000 in AGI (the taxable income). The hope is this will encourage more smaller donations.
What if I want to make a large donation?
- For those individuals who itemize on the Schedule A of their tax return, they can put a larger amount of cash contributions than current law. Normally, people can only claim cash contributions up to 60% of their Adjusted Gross Income. The CARES Act bumps that to 100% of their AGI. The hope is this will encourage more larger donations.
- Finally, the CARES Act allows people to deduct up to 25% of their AGI on food contributions. This is up from 15%. The hope here is it will help with local food banks, church drives, etc.
The latest resources from the IRS on Coronavirus tax relief
In-depth information on the Economic Impact Payments, who qualifies, and how they will be dispersed.
Intuit Aid Assist – a free website with an interactive tool to help small business owners and the self-employed in the U.S. assess potential eligibility for financial relief under the CARES Act,along with a calculator that will help estimate how much they qualify for and how much of a potential loan will be forgiven.
QuickBooks Capital - QuickBooks Capital is a non-bank SBA-approved lender for the Paycheck Protection Program (PPP). QuickBooks Capital will be able to simplify, automate and expedite the PPP application process.
TurboTax Stimulus Registration – a free product designed to help the more than 10 million Americans not required to file a tax return get their stimulus money fast.
During these uncertain times, navigating federal programs can be difficult. If you have any further questions, don't hesitate to contact any of our offices below.