IRS Response To COVID-19 Pandemic

IRS Response To COVID-19 Pandemic. Businesses and Individuals face numerous challenges as the coronavirus spreads. As COVID-19 continues to extend around the world. Companies and individuals are facing a diverse and challenging set of issues. These issues span several various factors including tax and measures being considered in the United States. Internationally to support taxpayers navigate the abnormal situation. The Internal Revenue Service and Treasury have been active in providing tax relief to impacted taxpayers.

FILE 1099 MISC FORM

Internationally, businesses also face tax factors related to a remote workforce. As businesses implement policies permitting their employees to work from home. Some businesses may pay some of their employees charges relating to setting up a home office, obtaining childcare, or other personal and living charges. This article directs some main factors for U.S. taxpayers related to the COVID-19 efforts.

Extensions Of Time To File

The Department of Treasury and the IRS declared in Notice 2020-17 that corporate taxpayers, Individuals, businesses get some extra time to file the tax returns. Corporate taxpayers would allow to defer up to $10 million in tax payments for 90 days. Additionally, individuals, small businesses and pass-through entities would be able to defer up to $1 million in tax payments for 90 days. Three days after, Treasury and the Internal Revenue Service issued replacing guidance, Notice 2020-18.

Like the past guidance, Notice 2020-18 issues that taxpayers will be allowed to defer tax payments for 90 days, until July 15, 2020. Lifts the before the cap on the payment of the deferral, such that unlimited payment may be deferred. The due date for federal tax returns due on April 15, 2020, filing date postponed until July 15, 2020.

However, the deferrals under Notice 2020-18 request only to the filing of federal income tax returns. Additional directions provided by the IRS in the form of FAQs defer the due date for filers of Form 8966.

Employee Expenses

Another implication of a disaster for purposes of Section 7508A that payments of an employee’s unreimbursed expenses arising from a disaster may be excludable from the individual’s earnings. If paid by an employer, they would not be subject to payroll tax. This service may allow employers to assist employees in addressing COVID-19 related personal charges.

Section 139 grants an individual to exclude from gross income, among other items, amounts paid to reimburse. Or pay reasonable personal, family, living, or funeral charges acquired as a result of a qualified disaster. So long as the charge is not refunded by the individual’s insurance. Although, no instructions have been issued under Section 139.

Employers intend to pay their employee’s charges incurred in working remotely should consider if the payment may qualify as a necessary business expense under Section 162. Payments to non-employees may qualify for the Section 139 exemption if the payments made to refund.

Companies should also consider the tax effects of debt forgiveness. For instance, the cancelation of a debt obligation may give rise to the cancellation of indebtedness amount to the debtor. The creditor on a Form 1099-C report to the Internal Revenue Service.

STARTED FOR FREE

Remote Work By Employees

IRS Response To COVID-19 Pandemic. In some situations, COVID-19 travel restrictions and quarantines require employees to work outside the tax jurisdiction in which their employer placed. Generally, there can be payment and employment tax considerations related to the performance of work.