COVID-Related Tax Resources

By: Susan B. Anders, PhD, CPA/CGMA

In addition to the human health, remote work environment, and technology challenges presented by the coronavirus (COVID-19) environment, tax practitioners have had to absorb and apply several tax law and related changes in the past two busy seasons. These included the Coronavirus Aid, Relief, and Economic Security (CARES) Act of March 2020 and the Coronavirus Response and Consolidated Appropriations Act of 2021 (passed in December 2020). The American Rescue Plan Act of March 2021 continued many of the previous programs, and it added new economic assistance provisions.

Respondents to the 2021 Tax Software Survey (see p. 20 of this issue) reported minor or significant problems in assisting clients with implementing many of the COVID-related tax law changes and tax benefits, along with generally just keeping up with the many pandemic-related provisions. More than 50% of survey respondents have historically used commercial tax research products to assist them in their practices. Interest in free online tools (e.g., the IRS, state tax department websites), however, has grown.

This column takes a specific look at the COVID-related tax resources available on the IRS, Treasury Department, and New York State tax department websites.

Internal Revenue Service

The IRS (http://www.irs.gov/), quite naturally, has some very helpful resources on its website. One challenge with using the IRS site is that locating materials can sometimes require extra effort. The highlights here should save readers some precious search time.

A good starting point is the Coronavirus Tax Relief web-page (https://bit.ly/3c9XfrC), which focuses on Advanced Child Tax Credit and Economic Impact Payments in the top portion of the page. But if users scroll down, they will find further links to information for individuals and families, businesses and tax-exempt entities, health and retirement plans, and the American Rescue Plan and Employer Tax Credits webpages. The most important resource on this page may be an understated link to the “IRS Operations during COVID-19: Mission-Critical Functions Continue” webpage (https://bit.ly/3c9XhQg), which contains a wealth of information on a large number of issues. For example, “What You Can Expect” covers 11 topics such as filed a tax return, answered a letter or notice, or sent us a check. “Other Services” includes an extensive Need Help listing, which may be overly optimistic given that 89% of Tax Software Survey respondents reported having minor to significant problems reaching the IRS. On a positive note, “IRS Enforcement and Compliance Operations” reports that IRS collection activities have resumed normal operations.

The Coronavirus Tax Relief for Businesses and Tax-Exempt Entities webpage (https://bit.ly/3DeAvlP) presents connections to further information on a dozen different topics affecting businesses, such as the Employee Retention Credit, Paid Sick and Family Leave Credit, and net operating loss carrybacks. Several online tax help links are listed for small business and self-employed taxpayers, as well as tax-exempt and other entities. The Employer Tax Credits webpage (https://bit.ly/3wXgyhr) includes more extensive information on the Sick and Family Leave Credits and the Employee Retention Credit.

The American Rescue Plan Act of 2021 webpage is an extensive news release (IR-2021-106, May 11, 2021) titled “IRS Offers Overview of Tax Provisions in American Rescue Plan; Retroactive Tax Benefits Help Many People Now Preparing 2020 Returns” (https://bit.ly/3nbzllA) that provides highlights of some of the major tax provisions, including retroactive 2020 items, including the exclusion of certain unemployment benefits and the suspension of repayment of the advanced premium tax credit. For 2021, the following tax credits were increased: child and dependent care credit, childless earned income credit, and child tax credit. Some restrictions were eased on the earned income credit for 2021 and future years.

More IRS COVID Tax Relief for Individuals

Advanced Child Tax Credit Payments in 2021 webpage

https://www.irs.gov/credits-deductions/advance-child-tax-credit-paymentsin-2021

Advanced Child Tax Credit Eligibility Assistant

https://www.irs.gov/credits-deductions/advance-child-tax-credit-eligibility-assistant

Child Tax Credit Update Portal

https://www.irs.gov/credits-deductions/child-tax-credit-update-portal

IRS: Economic Impact Payments webpage

https://www.irs.gov/coronavirus/economic-impact-payments

2020 Recovery Rebate Credit webpage

https://www.irs.gov/newsroom/recovery-rebate-credit

U.S. Dept of the Treasury: COVID-19 Economic Relief

The Treasury Department has a useful collection of materials on the COVID-19 Economic Relief section of its website at https://home.treasury.gov/policy-issues/coronavirus. Resources are organized under the subcategories of assistance for American families and workers; assistance for small businesses; assistance for state, local, and tribal governments; and assistance for American industry. Although the information is provided for the general public, it is still quite valuable for professionals—especially for communicating with clients.

Assistance for American Families and Workers (https://bit.ly/3DaD3BA) covers Economic Impact Payments, Unemployment Compensation, Child Tax Credit, and Emergency Rental Assistance. Economic Impact Payments summarizes the three rounds of disbursements and offers multiple links to topic-specific IRS webpages, which might actually be easier than trying to search the IRS website. The Child Tax Credit (CTC) webpage provides direct links to IRS webpages for the nonfiler sign-up tools, the CTC credit portal, and the CTC eligibility assistant. It also presents a link for access to the White House CTC website (https://bit.ly/3ccjahz). Several short information sheets and social media slides may be useful to CPAs who work with community organizations or make presentations to the general public.

Assistance for Small Businesses (https://bit.ly/31TJKu1) houses the topics of Small Business Tax Credit Programs, the Emergency Capital Investment Program, and the Paycheck Protection Program. Small Business Tax Credit Programs include the Employee Retention Credit and Paid Leave Credit, with several one-page reference sheets. Emergency Capital Investment Program presents application materials and a link to the application portal. Paycheck Protection Program (PPP) provides downloadable applications and updated information for borrowers and lenders.

One of the little jewels on the website is the Personal Finance Resources button on the right side of the main COVID-19 Economic Relief webpage, which opens a Personal Finance and Consumer Protection – Steps for Quicker Financial Relief resource (https://bit.ly/3qEDiBs). Although obviously targeted to consumers, this page provides a checklist of talking points for CPAs to discuss with their clients. Topics include basic family needs, bank customer information, mortgage and housing assistance, consumer credit, student loans, utility bills, coronavirus scams, and other help with finances. There are more than 30 links to handy materials.

New York State Department of Taxation and Finance

The New York State tax implications of recent federal COVID relief can be found on the Department of Taxation and Finance website at https://www.tax.ny.gov/pit/cares-act-faq.htm, which states that New York State follows some of the federal provisions of the CARES Act, the Consolidated Appropriations Act (2021), and the American Rescue Plan Act of 2021, but other provisions require state-specific adjustments. This webpage uses the Frequently Asked Question format to cover the “most high-profile” items. Provisions that do follow the federal treatment include the exemption from taxation of economic impact payments, PPP and other CARES Act loan forgiveness, and the waiver of required minimum retirement distributions. New York State is not allowing the charitable contribution deduction for non-itemizers, or the exclusion of unemployment compensation from taxable income. The page also includes links to several specific tax forms, including Form IT-558, “New York Adjustments Due to Decoupling from the IRC,” and all current year forms.

Susan B. Anders, PhD, CPA/CGMA, is the Louis J. and Ramona Rodriguez Distinguished Professor of Accounting at Midwestern State University, Wichita Falls, Tex. She is a member of The CPA Journal Editorial Advisory Board.