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

13.9 Million Americans to Receive IRS Tax Refund Interest

IR-2020-183, August 18, 2020

WASHINGTON — This week the Treasury Department and the Internal Revenue Service will send interest payments to about 13.9 million individual taxpayers who timely filed their 2019 federal income tax returns and are receiving refunds.

The interest payments, averaging about $18, will be made to individual taxpayers who filed a 2019 return by this year’s July 15 deadline and either received a refund in the past three months or will receive a refund. Most interest payments will be issued separately from tax refunds.

In most cases, taxpayers who received their refund by direct deposit will have their interest payment direct deposited in the same account. About 12 million of these payments will be direct deposited.

Everyone else will receive a check. A notation on the check − saying “INT Amount” − will identify it as a refund interest payment and indicate the interest amount.

See more at https://www.irs.gov/newsroom/13-point-9-million-americans-to-receive-irs-tax-refund-interest-taxable-payments-to-average-18-dollars

Economic Impact Payment “Get Your Payment” Link Live

The Economic Impact Payment “Get Your Payment” web service went live today. From the IRS: Use the “Get My Payment” application to check your payment status, confirm your payment type (either direct deposit or paper check), enter your bank account information for direct deposit if the IRS doesn’t have your direct deposit information and they haven’t sent your payment yet.  Click the link below to be redirected to the IRS’ Economic Impact Payments page.

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

Are You A Non-Filer?: Enter Your Economic Impact Payment Information Here

From the IRS:

Who is eligible for the Economic Impact Payment?

U.S. citizens or resident aliens who:

  • Have a valid Social Security number,
  • Could not be claimed as a dependent of another taxpayer, and
  • Had adjusted gross income under certain limits.

Who will receive the Economic Impact Payment automatically without taking additional steps?

Most eligible U.S. taxpayers will automatically receive their Economic Impact Payments including:

  • Individuals who filed a federal income tax for 2018 or 2019
  • Individuals who receive Social Security retirement or Social Security Disability Insurance benefits
  • Individuals who receive Railroad Retirement benefits

Who should use Non-Filers: Enter Payment Info to provide additional information to receive the Economic Impact Payment?

Eligible U.S. citizens or permanent residents who:

  • Had gross income that did not exceed $12,200 ($24,400 for married couples) for 2019
  • Were not otherwise required to file a federal income tax return for 2019, and didn’t plan to

You can provide the necessary information to the IRS easily and quickly for no fee through Non-Filers: Enter Payment Info. We will use this information to determine your eligibility and payment amount and send you an Economic Impact Payment. After providing this information you won’t need to take any additional action.

Who should use Non-Filers: Enter Payment Info to provide additional information to receive the Economic Impact Payment?

Eligible U.S. citizens or permanent residents who:

  • Had gross income that did not exceed $12,200 ($24,400 for married couples) for 2019
  • Were not otherwise required to file a federal income tax return for 2019, and didn’t plan to

You can provide the necessary information to the IRS easily and quickly for no fee through Non-Filers: Enter Payment Info. We will use this information to determine your eligibility and payment amount and send you an Economic Impact Payment. After providing this information you won’t need to take any additional action.

 

Non-Filers: Enter Payment Info Here

 

Information You will Need to Provide

  • Full name, current mailing address and an email address
  • Date of birth and valid Social Security number
  • Bank account number, type and routing number, if you have one
  • Identity Protection Personal Identification Number (IP PIN) you received from the IRS earlier this year, if you have one
  • Driver’s license or state-issued ID, if you have one
  • For each qualifying child: name, Social Security number or Adoption Taxpayer Identification Number and their relationship to you or your spouse

What to Expect

Clicking “Non-Filers: Enter Payment Info Here” above will take you from the IRS site to Free File Fillable Forms, a certified IRS partner. This site is safe and secure.

Follow these steps in order to provide your information:

  • Create an account by providing your email address and phone number; and establishing a user ID and password.
  • You will be directed to a screen where you will input your filing status (Single or Married filing jointly) and personal information.
  • Note: Make sure you have a valid Social Security number for you (and your spouse if you were married at the end of 2019) unless you are filing “Married Filing Jointly” with a 2019 member of the military. Make sure you have a valid Social Security number or Adoption Taxpayer Identification Number for each dependent you want to claim for the Economic Impact Payment.
  • Check the “box” if someone can claim you as a dependent or your spouse as a dependent.
  • Complete your bank information (otherwise we will send you a check).
  • You will be directed to another screen where you will enter personal information to verify yourself. Simply follow the instructions. You will need your driver’s license (or state-issued ID) information. If you don’t have one, leave it blank.

You will receive an e-mail from Customer Service at Free File Fillable Forms that either acknowledges you have successfully submitted your information, or that tells you there is a problem and how to correct it. Free File Fillable forms will use the information to automatically complete a Form 1040 and transmit it to the IRS to compute and send you a payment.

Like the IRS, Wisconsin Extends Tax Deadline to July 15th

Both federal and Wisconsin income tax payment and return due dates are automatically extended to July 15, 2020. Wisconsin law will automatically extend time and waive interest and penalties for taxpayers due to a presidentially declared disaster.

Points of interest with this notice:

• Tax filers do not have to file any extension forms to be eligible for this new due date.
• There is no limit on the amount of payment to be postponed, and there are no income exclusions.
• This applies to individuals, trusts, estates, partnerships, associations, companies or corporations.
• This relief is solely for income tax payments, estimated income tax payments and returns due April 15, 2020.
• There will be no interest or penalty for the period of April 15, 2020 to July 15, 2020.
• Interest, penalties, and underpayment interest for failure to make quarterly estimated tax payments with respect to such postponed federal income tax filings and payments will begin to accrue on July 16, 2020.

To see the full release, visit: https://www.revenue.wi.gov/Pages/News/2020/Tax-Deadline-Extended.pdf

From the Wisconsin Department of Revenue

Protect Yourself from Medicare Fraud

From Medicare.gov: Scammers may use COVID-19 as an opportunity to steal your identity and commit Medicare fraud. In some cases, they might tell you they’ll send you a Coronavirus test, masks, or other items in exchange for your Medicare number or personal information. Be wary of unsolicited requests for your Medicare number or other personal information.

It’s important to always guard your Medicare card like a credit card and check your Medicare claims summary forms for errors. Only give your Medicare number to participating Medicare pharmacists, primary and specialty care doctors or people you trust to work with Medicare on your behalf. Remember, Medicare will never call you to ask for or check your Medicare number.

For more information on protecting yourself from fraud and reporting suspected fraud, visit Medicare.gov/fraud.