IRS Reminds Taxpayers to Make April 15th Estimated Tax Payment

IR-2021-78, April 8, 2021

WASHINGTON — The Internal Revenue Service today reminded self-employed individuals, retirees, investors, businesses, corporations, and others who pay their taxes quarterly that the payment for the first quarter of 2021 is due Thursday, April 15, 2021.

The extension to May 17, 2021 for individuals to file their 2020 federal income taxes does not apply to estimated tax payments. The 2021 Form 1040-ES, Estimated Tax for Individuals, can help taxpayers estimate their first quarterly tax payment.

Income taxes are pay-as-you-go. This means, by law, taxes must be paid as income is earned or received during the year. Most people pay their taxes through withholding from paychecks, pension payments, Social Security benefits or certain other government payments including unemployment compensation.

Most often, those who are self-employed or in the sharing economy need to make estimated tax payments. Similarly, investors, retirees and others often need to make these payments because a substantial portion of their income is not subject to withholding. Other income generally not subject to withholding includes interest, dividends, capital gains, alimony and rental income. Paying quarterly estimated taxes will usually lessen and may even eliminate any penalties.

Exceptions to the penalty and special rules apply to some groups of taxpayers, such as farmers, fishermen, casualty and disaster victims, those who recently became disabled, recent retirees and those who receive income unevenly during the year. See Form 2210, Underpayment of Estimated Tax by Individuals, Estates and Trusts, and its instructions for more information.

How to pay estimated taxes

Form 1040-ES, Estimated Tax for Individuals, includes instructions to help taxpayers figure their estimated taxes. They can also visit IRS.gov/payments to pay electronically. The fastest and easiest ways to make an estimated tax payment is by using IRS Direct Pay, the IRS2Go app or the Treasury Department’s Electronic Federal Tax Payment System (EFTPS). For information on other payment options, visit IRS.gov/payments. If paying by check, taxpayers should be sure to make the check payable to the “United States Treasury.”

Publication 505, Tax Withholding and Estimated Tax, has additional details, including worksheets and examples, that can be especially helpful to those who have dividend or capital gain income, owe alternative minimum tax or self-employment tax, or have other special situations.

IRS.gov assistance 24/7

Tax help is available 24/7 on IRS.gov. The IRS website offers a variety of online tools to help taxpayers answer common tax questions. For example, taxpayers can search the Interactive Tax AssistantTax TopicsFrequently Asked Questions, and Tax Trails to get answers to common questions.

The IRS is continuing to expand ways to communicate to taxpayers who prefer to get information in other languages. The IRS has posted translated tax resources in 20 other languages on IRS.gov. For more information, see We Speak Your Language.

IRS and Some States Extending the Deadline to File Individual Tax Returns and Pay Owed Taxes

IR-2021-59, March 17, 2021

WASHINGTON — The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021.

Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021. Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17.

Individual taxpayers do not need to file any forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the May 17 deadline can request a filing extension until Oct. 15 by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Filing Form 4868 gives taxpayers until October 15 to file their 2020 tax return but does not grant an extension of time to pay taxes due. Taxpayers should pay their federal income tax due by May 17, 2021, to avoid interest and penalties.

The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds associated with e-filed returns are issued within 21 days.

This relief does not apply to estimated tax payments that are due on April 15, 2021. These payments are still due on April 15. Taxes must be paid as taxpayers earn or receive income during the year, either through withholding or estimated tax payments. In general, estimated tax payments are made quarterly to the IRS by people whose income isn’t subject to income tax withholding, including self-employment income, interest, dividends, alimony or rental income. Most taxpayers automatically have their taxes withheld from their paychecks and submitted to the IRS by their employer.

Wisconsin:

Wisconsin individual income tax return filing and payment due dates are extended to May 17, 2021. Wisconsin law provides for an extension of time and waiver of interest and penalties when the IRS extends filing deadlines during a presidentially-declared disaster. Individuals do not have to file any extension forms to be eligible for this new due date.


• No interest or penalties will accrue during the period of April 15, 2021 to May 17, 2021. Interest and late filing fees will
apply beginning May 18, 2021.
• No underpayment interest will apply for failure to make quarterly estimated individual income tax payments for the 2020
tax year.
• This relief is solely for 2020 individual income tax returns and payments that are normally due on due April 15, 2021.
• This relief does not apply to:
o 2021 estimated tax payments for individuals, the first payment of which is due April 15, 2021, or to any other returns or tax payments due to the Department of Revenue.

Minnesota:

 In following with the IRS, the Minnesota Department of Revenue has announced a grace period for taxpayers filing their annual Minnesota Individual Income Tax return for tax year 2020. Those taxpayers now have until May 17, 2021, to file and make their payments without any penalty or interest.

“This grace period for the individual tax filing and payment deadline provides timely relief to Minnesota families,” said Governor Tim Walz. “As we work to get through the COVID-19 pandemic together, my Administration will do everything we can to ease the burden on Minnesotans.”

Minnesota is allowing additional time for making 2020 state individual income tax filings and payments to May 17, 2021, without any penalty and interest being applied.

This grace period does not include individual estimated tax payments.

North Dakota:

Commissioner Ryan Rauschenberger announced that individual income tax filers have until May 17, 2021 to file their income tax return and pay the tax. Taxpayers who can file prior to May 17th do not need to take any additional steps if they are able to file by that date. 

The IRS recently announced it has also extended the federal individual income tax filing deadline to May 17, 2021. Rauschenberger has put in place a waiver of income tax penalty and interest allowing taxpayers until May 17 to file and pay, to provide relief to 2021 individual income tax filers impacted by the coronavirus pandemic.

Others (as of March 19th):

  • Alabama: Unlike the IRS, Alabama grants all taxpayers an automatic six-month extension to file penalty-free beyond the April 15, 2021 due date.
  • Alaska: Alaska does not have an income tax.
  • Arizona: The deadline is still April 15 for state taxes, but the Arizona Department of Revenue says it will consider an extension.
  • Arkansas: The deadline is still April 15 for state taxes, but the Arkansas Department of Finance and Administration says it will consider an extension.
  • California: The deadline for state taxes has been extended to May 17.
  • Colorado: The deadline for state taxes has been extended to May 17.
  • Connecticut: The deadline for state taxes has been extended to May 17.
  • Delaware: The deadline for state taxes remains unchanged, and will be April 30.
  • Florida: Florida does not have a state income tax.
  • Georgia: The deadline is still April 15.
  • Hawaii: Residents still need to file their N-11 Hawaii state form by April 20, but you can also file for a six month extension.
  • Idaho: The deadline for state taxes has been extended to May 17.
  • Illinois: The deadline for state taxes has been extended to May 17.
  • Indiana: The deadline is still April 15.
  • Iowa: The deadline for state taxes is April 30, although it looks like it will be extended soon.
  • Kansas: The deadline for state taxes is April 15, although it looks like an extension of that deadline is imminent, presumably for May 17.
  • Kentucky: The deadline for state taxes has been extended to May 17.
  • Louisiana: The deadline for state taxes has been extended to June 15.
  • Maine: The deadline for state taxes has been extended to May 17.
  • Maryland: The deadline for state taxes has been extended to July 15.
  • Massachusetts: The deadline for state taxes is expected to be extended to May 17.
  • Michigan: The deadline is still April 15.
  • Mississippi: The deadline is still April 15.
  • Missouri: The deadline for state taxes has been extended to July 15.
  • Montana: The deadline for state taxes has been extended to May 17.
  • Nebraska: The deadline is still April 15.
  • Nevada: Nevada does not have a state income tax.
  • New Hampshire: New Hampshire does not have a state income tax.
  • New Jersey: The deadline is still April 15, although there’s talk of matching the federal deadline of May 17.
  • New Mexico: The deadline for state taxes has been extended to May 17.
  • New York: The deadline is still April 15.
  • North Carolina: The deadline for state taxes has been extended to May 17.
  • Ohio: The deadline is still April 15, although it might be extended.
  • Oklahoma: The deadline for state taxes has been extended to June 15.
  • Oregon: The deadline for state taxes has been extended to May 17.
  • Pennsylvania: The deadline for state taxes has been extended to May 17.
  • Rhode Island: The deadline is still April 15, although an announcement on a possible extension is coming soon.
  • South Carolina: The deadline for state taxes has been extended to May 17.
  • South Dakota: South Dakota does not have a state income tax.
  • Tennessee: Tennessee does not have a state income tax.
  • Texas: Texas does not have a state income tax.
  • Utah: The deadline for state taxes has been extended to May 17.
  • Vermont: The deadline for state taxes has been extended to May 17.
  • Virginia: The deadline for state taxes is May 17.
  • Washington: Washington does not have a state income tax.
  • West Virginia: The deadline for state taxes has been extended to May 17.
  • Wyoming: Wyoming does not have a state income tax.

Educators can now deduct out-of-pocket expenses for COVID-19 protective items

IR-2021-28, February 4, 2021

WASHINGTON — Eligible educators can deduct unreimbursed expenses for COVID-19 protective items to stop the spread of COVID-19 in the classroom. COVID-19 protective items include, but are not limited to:

  • face masks;
  • disinfectant for use against COVID-19;
  • hand soap;
  • hand sanitizer;
  • disposable gloves;
  • tape, paint or chalk to guide social distancing;
  • physical barriers (for example, clear plexiglass);
  • air purifiers; and
  • other items recommended by the Centers for Disease Control and Prevention (CDC) to be used for the prevention of the spread of COVID-19.

Rev. Proc. 2021-15 PDF, issued today, provides guidance related to educators and their expenses under the COVID-related Tax Relief Act of 2020, which was enacted as part of the Consolidated Appropriations Act, 2021. The new law clarifies that unreimbursed expenses paid or incurred after March 12, 2020, by eligible educators for protective items to stop the spread of COVID-19 qualify for the educator expense deduction.

The educator expense deduction rules permit eligible educators to deduct up to $250 of qualifying expenses per year ($500 if married filing jointly and both spouses are eligible educators, but not more than $250 each).

Eligible educators include any individual who is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in a school for at least 900 hours during a school year.

This deduction is for expenses paid or incurred during the tax year. Taxpayers claim the deduction on Form 1040Form 1040-SR or Form 1040-NR (attach Schedule 1 (Form 1040)  PDF).

For additional information regarding the deduction for certain expenses of an eligible educator, see the Instructions for Form 1040 and Form 1040-SR PDF or the Instructions for Form 1040-NR.

For more information about this, the COVID-related Tax Relief Act of 2020 and other tax changes, visit IRS.gov.

Important Information About Effect of New Federal Law on 2020 Wisconsin Tax Returns

The federal Consolidated Appropriations Act, 2021 (Public Law 116-260) was enacted on December 27, 2020. The following are significant provisions of the Act that affect the filing of 2020 Wisconsin income/franchise tax returns. As of the date of this publication, there are no pending bills before Wisconsin’s legislature that would change the tax treatment described below.

Note: Instructions to Wisconsin 2020 tax forms have been updated to explain how to report the differences described below.

Earned Income Tax Credit

The Act provides that if a taxpayer’s earned income for 2020 is less than the earned income for 2019, the taxpayer may elect to use their 2019 earned income to compute the 2020 federal earned income tax credit (see sec. 211 of Division EE of Public Law 116-260). Taxpayers must use their 2020 income to compute the Wisconsin earned income tax credit. Therefore, if a taxpayer elects to use their 2019 earned income to compute their 2020 federal earned income tax credit, they must recompute the federal earned income tax credit using their 2020 earned income amount for Wisconsin purposes.

Original Paycheck Protection Program Loans

Federal and Wisconsin law provide an exclusion from income for forgiveness of debt on the original Paycheck Protection Program (PPP) loans. The Act provides that expenses paid with original PPP loan proceeds are deductible for federal tax purposes (see secs. 276(a) and 278(a) of Division N of Public Law 116-260). Wisconsin law follows federal law prior to amendments made by the Act. Therefore, expenses incurred that are paid with the forgivable PPP funds (original) are not deductible for Wisconsin income/franchise tax purposes and must be added back to Wisconsin income in the year incurred or paid.

Wisconsin follows federal law prior to modification by the Act, which is described in Revenue Ruling 2020-27:”A taxpayer that received a covered loan guaranteed under the PPP and paid or incurred certain otherwise deductible expenses listed in section 1106(b) of the CARES Act may not deduct those expenses in the taxable year in which the expenses were paid or incurred if, at the end of such taxable year, the taxpayer reasonably expects to receive forgiveness of the covered loan on the basis of the expenses it paid or accrued during the covered period, even if the taxpayer has not submitted an application for forgiveness of the covered loan by the end of such taxable year.”

Note: Although Revenue Ruling 2020-27 was made obsolete as a result of the Act, it still describes federal law prior to the Act.

Subsequent Paycheck Protection Program Loans

The Act provides that subsequent PPP loan proceeds that are forgiven are excluded from gross income for federal purposes (see sec. 276(b) of Division N of Public Law 116-260). For Wisconsin income/franchise tax purposes, taxpayers must include in Wisconsin gross income any subsequent PPP loan proceeds forgiven. However, taxpayers may deduct expenses paid with subsequent PPP loan proceeds that would otherwise be deductible.

Emergency Grants of Economic Injury Disaster Loans (EIDL) and Targeted EIDL Advances

The Act provides that emergency EIDL grants and targeted EIDL advances are excluded from gross income for federal purposes (see sec. 278(b) of Division N of Public Law 116-260). For Wisconsin income/franchise tax purposes, taxpayers must include the grants or advances in Wisconsin gross income. However, taxpayers may deduct expenses paid with EIDL grants or advances that would otherwise be deductible.

Subsidy for Certain Loan Payments

The Act provides that a subsidy for certain loan payments is excluded from gross income for federal purposes (see sec. 278(c) of Division N of Public Law 116-260). For Wisconsin income/franchise tax purposes, taxpayers must include the subsidy in Wisconsin gross income. However, taxpayers may deduct expenses paid with the subsidy that would otherwise be deductible.

Grants for Shuttered Venue Operations

The Act provides that grants for shuttered venue operators are excluded from gross income for federal purposes (see sec. 278(d) of Division N of Public Law 116-260). For Wisconsin income/franchise tax purposes, taxpayers must include the grants in Wisconsin gross income. However, taxpayers may deduct expenses paid with grants that would otherwise be deductible.

Applicable Laws and Rules

This document provides statements or interpretations of the following laws and regulations enacted as of January 22, 2021: Chapter 71, Wis. Stats.

Laws enacted and in effect after January 22, 2021, new administrative rules, and court decisions may change the interpretations in this document. Guidance issued prior to January 22, 2021, that is contrary to the information in this document is superseded by this document, pursuant to sec. 73.16(2)(a), Wis. Stats.

FOR QUESTIONS OR COMMENTS CONTACT:

MS 5-77
WISCONSIN DEPARTMENT OF REVENUE
Customer Service Bureau
PO Box 8949
Madison, WI 53708-8949
Phone: (608) 266-2772
Fax: (608) 267-1030
Email additional questions to DORIncome@wisconsin.gov

The department welcomes your input on our guidance. Submit comments on this guidance document.

Guidance Document Number: 100277

Posted at: https://www.revenue.wi.gov/Pages/TaxPro/2021/news-2021-CAA-Impact.aspx

Get a federal tax refund faster with direct deposit

IR-2021-19, January 22, 2021

WASHINGTON — The Internal Revenue Service today reminds taxpayers that the fastest way to get their tax refund is by filing electronically and choosing direct deposit.

Direct deposit is free, fast, simple, safe and secure. Taxpayers can even split their refund to have it deposited into one, two or three different accounts.

Eight out of 10 taxpayers get their refunds by using direct deposit. The IRS uses the same electronic transfer system to deposit tax refunds that is used by other federal agencies to deposit nearly 98% of all Social Security and Veterans Affairs benefits into millions of accounts.

Direct deposit also avoids the possibility that a refund check could be lost or stolen or returned to the IRS as undeliverable. And it saves taxpayer money. It costs more than $1 for every paper refund issued, but only a dime for each direct deposit.

Easy to use

A taxpayer simply selects direct deposit as the refund method when using tax software or working with a tax preparer, and either they or their tax preparer type in their account and routing number. It’s important to double check entries to avoid errors.

The IRS reminds taxpayers they should only deposit refunds directly into U.S. affiliated accounts that are in their name, their spouse’s name or both if it’s a joint account. Many people do not use checks and may find their routing and account numbers on their online bank account or mobile app.

Taxpayers may have a refund applied to their prepaid debit card. Many reloadable prepaid cards have account and routing numbers that could be provided to the IRS. But check with the financial institution to make sure the card can be used and verify the routing number and account number, which may be different from the card number.

There are mobile apps that may allow for direct deposit of tax refunds. They must have routing and account numbers associated with them that can be entered on a tax return. Check with the mobile app provider to confirm what numbers to use.

Have the bank routing and account number when having taxes prepared. The IRS does not have the ability to accept this information after a return is filed.

Don’t have a bank account?

Visit the FDIC website for information on where to find a bank that can open an account online and how to choose the right account. Veterans can use the Veterans Benefits Banking Program (VBBP) for access to financial services at participating banks. Tax return preparers may also offer electronic payment options.

Split refunds

By using direct deposit, a taxpayer can split their refund into up to three financial accounts, including a bank or Individual Retirement Account. Part of the refund can even be used to purchase up to $5,000 in U.S. Series I Savings Bonds.

A taxpayer can split their refund by using tax software or by using Form 8888, Allocation of Refund PDF (including Savings Bond Purchases), if they file a paper return. Some people use split refunds as a convenient option for managing their money, sending some of their refund to an account for immediate use and some for future savings.

No more than three electronic tax refunds can be deposited into a single financial account or prepaid debit card. Taxpayers who exceed the limit will receive an IRS notice and a paper refund will be issued for the refunds exceeding that limit.

Combining Electronic Filing plus direct deposit yields fastest refunds

The safest and most accurate way to file a tax return is to file electronically. Many people may be eligible to file electronically for free. Most refunds are issued in less than 21 days, but some returns may take longer. Taxpayers can track their refund using Where’s My Refund? on IRS.gov or by downloading the IRS2Go mobile app.

Where’s My Refund? is updated once daily, usually overnight, so there’s no reason to check more than once per day or call the IRS to get information about a refund. Taxpayers can check Where’s My Refund? within 24 hours after the IRS has received their e-filed return or four weeks after mailing a paper return. Where’s My Refund? has a tracker that displays progress through three stages:

  1. Return Received,
  2. Refund Approved, and 
  3. Refund Sent.

Whether through IRS Free File, commercially available software, or a tax preparer, electronic filing vastly reduces tax return errors, as the tax software does the calculations, flags common errors and prompts taxpayers for missing information.

2021 tax filing season begins Feb. 12; IRS outlines steps to speed refunds during pandemic

IR-2021-16, January 15, 2021

WASHINGTON ― The Internal Revenue Service announced that the nation’s tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns.

The February 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.

This programming work is critical to ensuring IRS systems run smoothly. If filing season were opened without the correct programming in place, then there could be a delay in issuing refunds to taxpayers. These changes ensure that eligible people will receive any remaining stimulus money as a Recovery Rebate Credit when they file their 2020 tax return.

To speed refunds during the pandemic, the IRS urges taxpayers to file electronically with direct deposit as soon as they have the information they need. People can begin filing their tax returns immediately with tax software companies, including IRS Free File partners. These groups are starting to accept tax returns now, and the returns will be transmitted to the IRS starting February 12.

“Planning for the nation’s filing season process is a massive undertaking, and IRS teams have been working non-stop to prepare for this as well as delivering Economic Impact Payments in record time,” said IRS Commissioner Chuck Rettig. “Given the pandemic, this is one of the nation’s most important filing seasons ever. This start date will ensure that people get their needed tax refunds quickly while also making sure they receive any remaining stimulus payments they are eligible for as quickly as possible.”

Last year’s average tax refund was more than $2,500. More than 150 million tax returns are expected to be filed this year, with the vast majority before the Thursday, April 15 deadline.

Under the PATH Act, the IRS cannot issue a refund involving the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) before mid-February. The law provides this additional time to help the IRS stop fraudulent refunds and claims from being issued, including to identity thieves.

The IRS anticipates a first week of March refund for many EITC and ACTC taxpayers if they file electronically with direct deposit and there are no issues with their tax returns. This would be the same experience for taxpayers if the filing season opened in late January. Taxpayers will need to check Where’s My Refund for their personalized refund date.

Overall, the IRS anticipates nine out of 10 taxpayers will receive their refund within 21 days of when they file electronically with direct deposit if there are no issues with their tax return. The IRS urges taxpayers and tax professionals to file electronically. To avoid delays in processing, people should avoid filing paper returns wherever possible.

Tips for taxpayers to make filing easier

To speed refunds and help with their tax filing, the IRS urges people to follow these simple steps:

  • File electronically and use direct deposit for the quickest refunds.
     
  • Check IRS.gov for the latest tax information, including the latest on Economic Impact Payments. There is no need to call.
     
  • For those who may be eligible for stimulus payments, they should carefully review the guidelines for the Recovery Rebate Credit. Most people received Economic Impact Payments automatically, and anyone who received the maximum amount does not need to include any information about their payments when they file. However, those who didn’t receive a payment or only received a partial payment may be eligible to claim the Recovery Rebate Credit when they file their 2020 tax return. Tax preparation software, including IRS Free File, will help taxpayers figure the amount.
     
  • Remember, advance stimulus payments received separately are not taxable, and they do not reduce the taxpayer’s refund when they file in 2021.

Key filing season dates

There are several important dates taxpayers should keep in mind for this year’s filing season:

  • January 15. IRS Free File opens. Taxpayers can begin filing returns through Free File partners; tax returns will be transmitted to the IRS starting Feb. 12. Tax software companies also are accepting tax filings in advance.
     
  • January 29. Earned Income Tax Credit Awareness Day to raise awareness of valuable tax credits available to many people – including the option to use prior-year income to qualify.
     
  • February 12. IRS begins 2021 tax season. Individual tax returns begin being accepted and processing begins.
     
  • February 22. Projected date for the IRS.gov Where’s My Refund tool being updated for those claiming EITC and ACTC, also referred to as PATH Act returns.
     
  • First week of March. Tax refunds begin reaching those claiming EITC and ACTC (PATH Act returns) for those who file electronically with direct deposit and there are no issues with their tax returns.
     
  • April 15. Deadline for filing 2020 tax returns.
     
  • October 15. Deadline to file for those requesting an extension on their 2020 tax returns

Filing season opening

The filing season open follows IRS work to update its programming and test its systems to factor in the second Economic Impact Payments and other tax law changes. These changes are complex and take time to help ensure proper processing of tax returns and refunds as well as coordination with tax software industry, resulting in the February 12 start date.

The IRS must ensure systems are prepared to properly process and check tax returns to verify the proper amount of EIP’s are credited on taxpayer accounts – and provide remaining funds to eligible taxpayers.

Although tax seasons frequently begin in late January, there have been five instances since 2007 when filing seasons did not start for some taxpayers until February due to tax law changes made just before the start of tax time.

IRS Expands Identity Protection PIN Opt-In Program to Taxpayers Nationwide

IR-2020-267, December 2, 2020

WASHINGTON — As part of the Security Summit effort, the Internal Revenue Service announced today that starting in January the Identity Protection PIN Opt-In Program will be expanded to all taxpayers who can properly verify their identities.

The Summit partners, including state tax agencies, the nation’s tax industry and the IRS, marked the third day of the National Tax Security Awareness Week by urging taxpayers who want the proactive protection against identity theft to opt into the Identity Protection PIN program in 2021.

The IP PIN is a six-digit number assigned to eligible taxpayers to help prevent the misuse of their Social Security number on fraudulent federal income tax returns. An IP PIN helps the IRS verify a taxpayer’s identity and accept their electronic or paper tax return. The online Get An IP PIN tool at IRS.gov/ippin immediately displays the taxpayer’s IP PIN.

“When you have this special code, it prevents someone else from filing a tax return with your Social Security number,” said IRS Commissioner Chuck Rettig. “The fastest way to get an Identity Protection PIN is to use our online tool but remember you must pass a rigorous authentication process. We must know that the person asking for the IP PIN is the legitimate taxpayer.”

The online tool uses Secure Access authentication which uses several different ways to verify a person’s identity. Before using the “Get an IP PIN” tool, the IRS encourages taxpayers to review the requirements at IRS.gov/secureaccess.

For those who cannot pass Secure Access authentication, there are alternatives. Taxpayers with incomes of $72,000 or less and with access to a telephone should complete Form 15227 and mail or fax it to the IRS. An IRS assistor will call the taxpayer to verify their identity with a series of questions. For additional security reasons, taxpayers who pass authentication will receive an IP PIN the following tax year.

Taxpayers who cannot verify their identities remotely or who are ineligible to file a Form 15227 may make an appointment, visit a Taxpayer Assistance Center and bring two forms of picture identification. Because this is an in-person identity verification, an IP PIN will be mailed to the taxpayer within three weeks.

Taxpayers who obtain an IP PIN should never share their code with anyone but their trusted tax provider. The IRS will never call to request the taxpayer’s IP PIN, and taxpayers must be alert to potential IP PIN scams.

Here’s what taxpayers need to know about the IP PIN before applying:

  • The Get an IP PIN tool will be available in mid-January. This is the preferred method of obtaining an IP PIN and the only one that immediately reveals the PIN to the taxpayer.
  • Taxpayers who want to voluntarily opt into the IP PIN program do not need to file a Form 14039, Identity Theft Affidavit.
  • The IP PIN is valid for one year. Each January, the taxpayer must obtain a newly generated IP PIN.
  • The IP PIN must be properly entered on electronic and paper tax returns to avoid rejections and delays.
  • Taxpayers with either a Social Security number or Individual Tax Identification Number who can verify their identities are eligible for the opt-in program.
  • Any primary taxpayer (listed first on the return), secondary taxpayer (listed second on the return) or dependent may obtain an IP PIN if they can pass the identity proofing requirements.
  • The IRS plans to offer an opt out feature to the IP PIN program in 2022 if taxpayers find it is not right for them.

There is no change in the IP PIN program for confirmed victims of tax-related identity theft. Those taxpayers should still file a Form 14039 if their e-filed tax return rejects because of a duplicate SSN filing. The IRS will investigate their case and once the fraudulent tax return is removed from their account, confirmed victims automatically will receive an IP PIN via postal mail at the start of the next calendar year.

IP PINs will be mailed annually to confirmed victims only and participants enrolled prior to 2019. Because of security risks, confirmed identity theft victims cannot opt out of the IP PIN program. Confirmed victims also can use the Get an IP PIN tool to retrieve lost IP PINs assigned to them.

The IRS, state tax agencies, the private sector tax industry, including tax professionals, work in partnership as the Security Summit to help protect taxpayers from identity theft and refund fraud. This is the third in a week-long series of tips to raise awareness about identity theft. See IRS.gov/securitysummit for more details.

Special $300 tax deduction helps most people give to charity this year – even if they don’t itemize

IR-2020-264, November 25, 2020

WASHINGTON — The Internal Revenue Service today reminded taxpayers of a special new provision that will allow more people to easily deduct up to $300 in donations to qualifying charities this year.

Following special tax law changes made earlier this year, cash donations of up to $300 made before December 31, 2020, are now deductible when people file their taxes in 2021.

“Our nation’s charities are struggling to help those suffering from COVID-19, and many deserving organizations can use all the help they can get,” said IRS Commissioner Chuck Rettig. “The IRS reminds people there’s a new provision that allows for up to $300 in cash donations to qualifying organizations to be deducted from income. We encourage people to explore this option to help deserving tax-exempt organizations – and the people and causes they serve.”

The Coronavirus Aid, Relief and Economic Security (CARES) Act, enacted last spring, includes several temporary tax changes helping charities, including the special $300 deduction designed especially for people who choose to take the standard deduction, rather than itemizing their deductions.

Nearly nine in 10 taxpayers now take the standard deduction and could potentially qualify for this new tax deduction. In tax-year 2018, the most recent year for which complete figures are available, more than 134 million taxpayers claimed the standard deduction, just over 87% of all filers.

Under this new change, individual taxpayers can claim an “above-the-line” deduction of up to $300 for cash donations made to charity during 2020. This means the deduction lowers both adjusted gross income and taxable income – translating into tax savings for those making donations to qualifying tax-exempt organizations.

Before making a donation, the IRS reminds people they can check the special Tax Exempt Organization Search (TEOS) tool on IRS.gov to make sure the organization is eligible for tax-deductible donations.

Cash donations include those made by check, credit card or debit card. They don’t include securities, household items or other property. Though cash contributions to most charitable organizations qualify, some do not. Check Publication 526, Charitable Contributions, and the TEOS for more information.

Though cash contributions to most charitable organizations qualify, those made to supporting organizations and donor-advised funds do not.

The IRS reminds everyone giving to charity to be sure to keep good records. By law, special recordkeeping rules apply to any taxpayer claiming a charitable contribution deduction. Usually, this includes obtaining a receipt or acknowledgement letter from the charity, before filing a return, and retaining a cancelled check or credit card receipt. For details on these recordkeeping rules, see Publication 526, available on IRS.gov.

In addition, the CARES Act includes other temporary provisions designed to help charities. These include higher charitable contribution limits for corporations, individuals who itemize their deductions and businesses that give food inventory to food banks and other eligible charities. For more information about these and other Coronavirus-related tax relief provisions, visit IRS.gov/coronavirus.

October 15 Deadline Nears for Taxpayers who Requested 2019 Tax Filing Extensions

WASHINGTON — The Internal Revenue Service reminds taxpayers who filed an extension that the October 15th due date to file their 2019 tax return is near. Taxpayers should file their tax returns on or before the October 15th deadline. For those who still owe, pay as soon as possible to reduce any penalties and interest.

See more at: https://www.irs.gov/newsroom/october-15-deadline-nears-for-taxpayers-who-requested-tax-filing-extensions

IRS: Deadline to return distributions to retirement accounts is Aug. 31

IR-2020-187, August 24, 2020

WASHINGTON — The Internal Revenue Service today reminds IRA owners, beneficiaries or workplace retirement plan participants who received a Required Minimum Distribution (RMD) this year that they have until August 31 to rollover or repay the distribution to avoid paying taxes.

See full story at: https://www.irs.gov/newsroom/irs-deadline-to-return-distributions-to-retirement-accounts-is-aug-31