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April 2020

Employee Retention Credit: An Essential Guide

The Covid-19 outbreak has disrupted economic activities all over the country. Therefore, the Internal Revenue Service (IRS) has implemented measures to offer financial relief to businesses.

One of those provisions is the Employee Retention Credit (ERC). This initiative aims to help small businesses keep their employees on their payroll.

What Businesses Qualify for the Employee Retention Credit?

The credit is geared towards businesses that have been impacted by the coronavirus outbreak. The qualifying businesses fall into two basic categories:

  • The business is in total or partial suspension by government order due to the coronavirus outbreak during the calendar quarter.
  • The employer’s gross receipts are below 50% of the comparable quarter in 2019.

It’s important to note that once your receipts go above 80% of a comparable quarter in 2019, you no longer qualify for the credit.

How Much Is the Employee Retention Credit Worth?

The amount of the Employee Retention Credit is equal to 50% of qualifying wages paid up to $10,000. Wages paid after March 12, 2020, and before January 1, 2021 are eligible. The wages considered include as well as portion of the cost of employer provided health care.

What Wages Qualify for the ERC?

The qualifying wages are determined considering the size of the business.

  • If the employer had 100 employees or fewer on average in 2019, the credit is based on wages paid to all employees, regardless if they worked or not.
  • For employers with more than 100 employees on average in 2019, the credit applies only to wages paid to workers who did not work during the calendar quarter.

How Would I Receive the ERC?

Employers can be immediately reimbursed for the credit by reducing their required deposits of payroll taxes that have been withheld from employees’ taxes by the amount of the credit.

If your tax deposits are not enough to cover the credit, then you may receive an advance payment by submitting form 7200 to the IRS

It’s important to know this and other initiatives to navigate the current circumstances. Our knowledgeable experts at JT Tax Services will help you so you can take advantage of all the relief initiatives you are eligible for.

At JT Tax Services we have the experience, the knowledge and the drive to assist you. With our advice, you can file your taxes with the peace of mind that comes with knowing that you are limiting your liability while staying compliant with federal and state tax regulations.

We are located in Oxnard, California. Contact us by email, telephone or through our social media accounts on FacebookTwitter and LinkedIn to learn more about our services.

The 4 Most Frequently Asked Questions about Economic Impact Payments

Economic Impact Payments are already being sent to taxpayers all over the United States, but questions regarding this stimulus still abound.

In this post we’ll answer the most frequently asked questions regarding Economic Impact Payments, so you can determine whether you are eligible, how much you could get, and how to check the status of your payment.

How Much Would I Get?

Individual taxpayers eligible for Economic Impact Payments get $1,200, while couples filing jointly receive 2,400. Additionally, you can receive $500 extra for every qualifying child you claimed on your tax return.

Do I Qualify for an Economic Impact Payment?

People qualify to Economic Impact Payments based upon their Adjusted Gross Income (AGI). You qualify to an Economic Impact Payment if your AGI is up to:

  • $75,000 for individuals
  • $112,500 for head of household filers
  • $150,000 for married couples filing joint returns

If your AGI exceeds these ranges, don’t worry. You can still get a reduced Economic Impact Payment if you have an AGI between:

  • $75,000 and $99,000 if your filing status was single or married filing separately
  • 112,500 and $136,500 for head of household
  • $150,000 and $198,000 if your filing status was married filing jointly

In this case, the amount of the reduced payment will be based upon your specific AGI.

What if I Receive Social Security or Other Benefits?

You don’t have to make a filing to get your Economic Impact Payment if you receive Social Security, railroad retirement, Social Security Disability Insurance (SSDI and SSI) or veteran’s benefits. In that case, you’ll receive your payment the same way you normally receive your benefits.

On the other hand, People who don’t normally file, such as low-income or no income taxpayers, can use Non-Filers: Enter Payment Info tool to give IRS  basic information to get their Economic Impact Payments.

How Can I Check the Status of My Payment?

The IRS launched recently the Get My Payment Tool. The website will allow you to check the status of your Economic Impact Payment. The information is updated every 24 hours, usually overnight, so use the tool only once a day to allow others to check the status of their payment as well.

It’s important to know this and other initiatives to navigate the current circumstances. Our friendly and knowledgeable experts at JT Tax Services will help you so you can take advantage of all the relief initiatives you are eligible for.

At JT Tax Services we have the experience, the knowledge and the drive to assist you. With our advice, you can file your taxes with the peace of mind that comes with knowing that you are limiting your liability while staying compliant with federal and state tax regulations.

We are located in Oxnard, California. Contact us by email, telephone or through our social media accounts on FacebookTwitter and LinkedIn to learn more about our services.

Now You Can Check Your Economic Impact Payment Online

The first round of Economic Impact Payments is about to be sent to taxpayers, who now have an online tool available to track the status of their stimulus.

The Internal Revenue Service (IRS) has unveiled the website Check My Payment to allow taxpayers to check their Economic Impact Payment or communicate their direct deposit information to the IRS, in case the agency doesn’t have it.

The IRS sends Economic Impact Payments using information included in past tax filings. However, if you haven’t filed your taxes for 2019 or 2018, you can use this website to communicate your direct deposit information. In addition, you can use it if you belong to a category that doesn’t require you to file taxes.

It’s advisable to use the Check My Payment website only once a day. This way you will avoid excessive traffic so other users can track their payment as well.

What Are Economic Impact Payments?

Economic Impact Payments are a provision rolled out by the IRS and the Treasury Department. Above all, the aim is to offer financial relief to taxpayers affected by the coronavirus outbreak.

If you qualify for an Economic Impact Payment these are the amounts you could receive.

  • Up to $1,200 for eligible individuals
  • Up to $2,400 for eligible married couples
  • Up to $500 for each qualifying child for eligible individuals

Taxpayers qualify to Economic Impact Payments based upon their Adjusted Gross Income, as follows:

  • Up to $75,000 for individuals
  • Up to $112,500 for head of household filers and
  • Up to $150,000 for married couples filing joint returns

The government’s response to COVID-19 is fluid. Therefore, the relief initiatives in force may change to better adjust them to future circumstances. Check constantly this blog and the IRS’ website to stay up-to-date as the situation evolves.

It’s important to know this and other initiatives to navigate the current circumstances. Our knowledgeable experts at JT Tax Services will help you so you can take advantage of all the relief initiatives you are eligible for.

At JT Tax Services we have the experience, the knowledge and the drive to assist you. With our advice, you can file your taxes with the peace of mind that comes with knowing that you are limiting your liability while staying compliant with federal and state tax regulations.

We are located in Oxnard, California. Contact us by email, telephone or through our social media accounts on FacebookTwitter and LinkedIn to learn more about our services.

 

Don’t Fall for Coronavirus Tax Scams

The world is going through unprecedented circumstances due to the outbreak of coronavirus. However, scammers and fraudsters are still trying to take advantage of people, tricking them into sharing their personal information.

Scammers target retirees in particular. The fraudsters send false communications related to Economic Impact Payments announced by the Internal Revenue Service (IRS) and the Treasury.

The fraudulent strategy being used is called phishing. This consists in using text, phone calls or social media to send false messages supposedly from trusted institutions to deceive the unknowing recipients.

How to Identify Phising Attempts

  • The term Economic Impact Payment is not used in the message. Instead, they use the terms “Stimulus Check” or “Stimulus Payment.”
  • A fake check with an odd amount is mailed, and you are ordered to call a number or verify information online to cash it
  • You’re asked to check your Economic Impact Payment to someone else.
  • You’re asked by phone, email or social media to verify your information in order to receive or speed up your payment.

The Truth About Economic Impact Payments

These payments are government stimulus to help taxpayers who have been negatively affected by the outbreak of coronavirus.

Those eligible are tax filers with adjusted gross income up to $75,000 for individuals or up to $150,000 for couples filing jointly. If your income is above these amounts, the payment will be reduced by $5 for each $100 above the threshold.

Single filers with adjusted gross income of more than $99,000 or $198,000 for joint filers are not eligible for Economic Impact Payments.

The IRS will deposit your payment directly using the details included in your 2019 tax return (or 2018 if you haven’t filed yet). If they don’t have your direct deposit information, don’t worry: An official website will be online within a few weeks, so you can safely communicate this information.

What to Do?

If you believe you have suffered a phishing or fraud attempt, don’t engage the sender of the message. Report the attempt to the IRS (phishing@irs.gov)

The government’s response to the outbreak of coronavirus is fluid, and fraudsters adapt their strategies accordingly. Check constantly this blog and the IRS’ website to stay updated as the situation evolves.

It’s important to know this and other pitfalls to successfully navigate the current circumstances. Our knowledgeable experts at JT Tax Services will assist you so you can take advantage of all the relief initiatives you are eligible for.

We are located in Oxnard, California. Contact us by email, telephone or through our social media accounts on FacebookTwitter and LinkedIn to learn more about our services.

IRS Launches People First Initiative as a Response to COVID-19

The internal Revenue Service (IRS) has launched its People First initiative to offer relief to those having trouble paying their taxes due to the outbreak of COVID-19.

The project starts April 1 2020 and runs until July 15 2020. During this period certain payments related to installment agreements will be postponed and enforcement actions will be limited. Also, the IRS will avoid person-to-person interactions, although it will continue to protect all applicable statutes of limitations.

Key Actions

If you have an installment plan in place, you can breathe easy, since the payments due between April 1 and July 15 will be suspended, although interest will continue to accrue on unpaid balances.

The agency will suspend field collection activities during this period as well. New delinquent accounts will not be forwarded to private collection companies, but the IRS will continue to purse high-income non-filers. If you haven’t filed taxes before 2019, it’s advisable to seek the assistance of a tax expert to file your delinquent returns.

Offers in Compromise (OIC) and Tax Day

Taxpayers experiencing problems to pay their taxes can apply for a Payment Plan through the IRS’ official website. This way, the will be able to pay their balance over time, if they are eligible.

There are several provisions regarding Offers in Compromise (OIC). This is an agreement between the IRS and a taxpayer to settle the taxpayer’s tax liabilities for less than the full amount they owe. The agency will allow taxpayers until July 15 to provide additional information for a pending OIC and it will not close any pending OIC request before that date without the taxpayer’s consent.

It’s important to note that as part of the IRS’ relief efforts, the federal Tax Day has been moved from April 15 to July 15. You don’t have to take any further actions to take advantage of this extension. It will apply automatically to all taxpayers. However, keep in mind that there are different regulations regarding state taxes. Therefore, make sure to check them in order to stay compliant.

A Fluid Response

The government’s response to COVID-19 is fluid. In fact, the People First Initiative may change to better adjust it to future circumstances. Check constantly this blog and the IRS’ website to stay up-to-date as the situation evolves.

It’s important to know this and other initiatives to navigate the current circumstances. Our knowledgeable experts at JT Tax Services will assist you so you can take advantage of all the relief initiatives you are eligible for.

We are located in Oxnard, California. Contact us by email, telephone or through our social media accounts on Facebook, Twitter and LinkedIn to learn more about our services.