Be on “high alert” for scams related to the coronavirus (COVID-19) pandemic. The Treasury Inspector General for Tax Administration (TIGTA) has issued this urgent warning to taxpayers related to the government Economic Impact Payments that are being made to taxpayers to mitigate the effects of the crisis. TIGTA stresses that taxpayers shouldn’t respond if they receive letters, calls, emails or other communications from individuals claiming to be from IRS and offering COVID-19 payments in exchange for personal information, an advance fee or other charge.
Taxpayers should also remain aware of other related scams and solicitations “that fraudulently claim to be from the IRS,” TIGTA said. Read the TIGTA warning here: https://bit.ly/3c62xSQ
The IRS’ “Get My Payment” tool is up and running. But many taxpayers are experiencing problems with it. The tool allows taxpayers to check on the status of their Economic Impact Payments (EIPs), which are being sent to help ease the coronavirus (COVID-19) crisis. If you filed a 2018 or 2019 tax return, you can use the application to find out the projected date for when your payment will be deposited into your bank account. Also, taxpayers who didn’t use direct deposit on their last tax return will be able to input information to receive their payments via direct deposit into their bank accounts, expediting receipt. The IRS has reported that millions of EIPs have hit bank accounts so far. However, many people are still waiting. Some people are getting an error message (“payment status not available”) when using the Get My Payment tool. Hopefully, the IRS will have it operating seamlessly soon. Try the tool here: https://bit.ly/34LljfJ
Do you know someone who receives Supplemental Security Income (SSI)? If so, that person should automatically receive a $1,200 Economic Impact Payment “no later than early May,” according to the IRS. No further action is required on his or her part, even though SSI recipients typically aren’t required to file tax returns. The SSI program provides monthly payments to people with limited income.
Moving SSI recipients to automatic EIP payments required interagency effort. IRS Commissioner Chuck Rettig indicated that “additional programming work remains” to get the payment process working fluidly. EIP payments are being sent to help mitigate the coronavirus (COVID-19) emergency.
What might the price tag for the Coronavirus Aid, Relief and Economic Security (CARES) Act be? In a letter to the U.S. Senate Budget Committee, the Congressional Budget Office and the Joint Committee on Taxation estimated that the CARES Act will add more than $1.8 trillion to the federal deficit in the period of 2020-2030. The estimate included: a $988 billion rise in mandatory outlays; a $446 billion drop in revenues and more.
This increase is less than $2 trillion in financial aid provided by the law, according to the letter, “because some of that assistance is in the form of loan guarantees, which are not estimated to have a net effect on the budget.” Here’s the letter: https://bit.ly/3bsAflm
Self-employed individuals may be eligible to defer payment of self-employment tax on net earnings from self-employment income. Under the CARES Act, the IRS states that self-employed persons may defer payment of 50% of Social Security tax due on net earnings from their self-employment income, for the period of March 27, 2020 through Dec. 31, 2020.
Also, for any tax year that includes part of the same deferral period, no penalty will be imposed for failure to make estimated tax payments of 50% Social Security tax due on their net self-employment earnings. See questions 9 and 10 of these IRS FAQs about employment tax deferral: https://bit.ly/2ybKCLV