Updates & News
MASSACHUSETTS PASSES NEW COVID 19 RELIEF BILL ALLOWING TAXPAYERS TO EXEMPT UNEMPLOYMENT FROM TAXATION AND ALSO EXEMPT FROM TAXABLE INCOME ALL PPP LOAN FORGIVENESS
Governor Charlie Baker signed a new law on Thursday April 1, allowing Massachusetts taxpayers who have household income 200% below the poverty line to exempt the first $10,200 of unemployment compensation from Massachusetts income tax. The new law also exempts from taxable income PPP loans and EIDL grants that many Massachusetts businesses had forgiven under the federal program. Prior to the new law these loans were considered taxable income upon forgiveness by the SBA. The Massachusetts Department of Revenue has stated that for those taxpayers who have already filed their tax returns and qualified for the newly enacted unemployment exemption, do not have to file an amended return. Those taxpayers will be refunded their tax overpayment directly from the MASS DOR. Answers to FAQ regarding the new law can be found here:
IRS ANOUNCES 2020 TAX FILING DEADLINE EXTENSION
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. The IRS will be providing formal guidance in the coming days.
"This continues to be a tough time for many people, and the IRS wants to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities," said IRS Commissioner Chuck Rettig. "Even with the new deadline, we urge taxpayers to consider filing as soon as possible, especially those who are owed refunds. Filing electronically with direct deposit is the quickest way to get refunds, and it can help some taxpayers more quickly receive any remaining stimulus payments they may be entitled to."
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.
AMERICAN RESCUE PLAN ACT PROVIDES $10,200 TAX EXEMPT UNEMPLOYMENT RETROACTIVE TO JAN 2020
The American Rescue Plan Act was signed into law on March 11, 2021 and one of its many provisions allows a $10,200 exclusion of unemployment income from federal income tax. The exclusion applies retroactively to unemployment benefits received in 2020. The IRS is still developing procedures on how treat this exemption on your tax returns, and as it looks now, if you have already filed your 2020 Federal Income Returns, you will have to amend your return to claim any additional refund owed to you as a result of the new exclusion. The exclusion applies to all unemployment benefits received in 2020 up to a maximum of $10,200. You must have adjusted gross income below $150,000 in order to claim this exclusion. See section 2901 of the Act for full text concerning unemployment benefits.
SECOND DRAW PAYROLL PROTECTION PROGRAM (PPP) LOANS AVAILABLE
The Paycheck Protection Program (PPP) now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP Loan with the same general loan terms as their First Draw PPP Loan.
Second Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.
Who May Qualify - borrower is generally eligible for a Second Draw PPP Loan if the borrower:
Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses
Has no more than 300 employees; and
Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020
MILLIONS OF TAXPAYERS TO RECEIVE THEIR SECOND ECONOMIC IMPACT PAYMENTS BY DEBIT CARD
The Treasury Department and the IRS are issuing millions of second Economic Impact Payments by prepaid debit card to speed delivery of the payments to as many people as possible.
If the Get My Payment tool on IRS.gov shows a date that a recipient’s payment was mailed, they should watch their mail for either a paper check or debit card. The debit cards arrive in a white envelope that prominently displays the U.S. Department of the Treasury seal.
The prepaid debit card, called the Economic Impact Payment card, is issued by Treasury's financial agent, MetaBank®, N.A.
$688 MILLION AVAILABLE IN MASSACHUSETTS SMALL BUSINESS GRANTS
Gov. Charlie Baker announced a $668 million program to provide help for small businesses affected by the pandemic.
The program offers grants of up to $75,000 or three months of operating expenses.
Businesses that are eligible for the program include restaurants, bars, caterers, indoor recreation, gyms, photographers, personal services, retail and other businesses hit hard by the pandemic.
An online application portal for the program is available here:
UPDATED OFFICE HOURS
Due to the May 17 extended due date - We have ended our Saturday hours
We are open Monday - Friday 9am to 5pm. Please note that you can drop off your information during these hours, or leave it in our drop box just outside our door. The drop box is checked daily. You can also email us at any information or questions. We are currently accepting telephone appointments only. You may pick up or we can ship or email all of your completed tax materials to you when completed.
No doubt these are difficult times, we are here to assist you with your tax and legal compliance issues. If you have any questions or concerns, please do not hesitate to reach out to us... be safe and healthy... Scott
Experienced Attorney | CPA
Real Estate, Probate Administration, Wills, Trusts, Estates, Business Sales, Accounting, Audit and Tax Law...
Scott M. Sawyer, is an Attorney admitted to practice in Massachusetts. He is also a Certified Public Accountant licensed to practice in Massachusetts, Vermont and New York.
Scott M. Sawyer is a graduate of Western New England University School of Law.
He received his Master’s Degree in Business at the Franklin W. Olin Graduate School of Business from
Babson College in Wellesley, Massachusetts and his undergraduate degree from the University of Massachusetts, Lowell.
His experience includes more than thirty five years of working with businesses in such diverse industries as non-profit organizations, municipalities, retailers, wholesalers, manufacturers, law firms, real estate, forestry, aviation, and many others.
Please contact Scott M. Sawyer, Attorney at Law -CPA for a complimentary review of your business or personal legal, accounting and tax compliance needs.
Material presented on this website is intended for information purposes only. It is not intended as professional advice and should not be construed as such.