Mazzeffi & Company

Tax Alerts

June 11, 2021

Tax Briefing(s)

2021 Post-Filing Season Update American Rescue Plan Act of 2021 2020 Tax Year-In-Review

First Monthly Child Tax Credit Payment Coming in July
The IRS and the Treasury Department have announced that the first monthly payment of the new refundable Child Tax Credit (CTC) from the American Rescue Plan will be made on July 15. The increased CTC ...

Late Filers Should File to Limit Penalties
The IRS reminded taxpayers who missed the recent tax-filing deadline but are due a refund that there is no penalty for filing late if a refund is due. Those who owe and missed the deadline without req...

Groups Urged to Share Tax Information With Those Without Permanent Addresses
In an ongoing effort to help those experiencing homelessness, the IRS has reminded people who do not have a permanent address or a bank account that they may still qualify for stimulus payments and ot...

IRS Updates Plug-In Credit for 2022 Vehicles
The IRS has added new 2022 models to the list of vehicles for which the plug-in vehicle credit would be available. The vehicles added include BMW and Mini vehicles. The BMW 745e XDrive has a credit am...

Adjustments for CTC, EITC, PTC Table
The IRS has modified inflation-adjusted amounts for the child tax credit (CTC), the earned income tax credit (EITC/EIC), and the applicable percentage table for Code Sec. 36B for calculating a taxpaye...

2022 HSA Amounts Released
The IRS has released the 2022 inflation-adjusted amounts for health savings accounts (HSAs) under Code Sec. 223. For calendar year 2022, the annual limitation on deductions under Code Sec. 223(b)(2) f...

Drafts of New Schedules K-2 and K-3 Released
The IRS and Treasury have released updated early drafts of new Schedule K-2 and Schedule K-3 for Form 1065, U.S. Return of Partnership Income, Form 1120-S, U.S. Income Tax Return for an S Corporation,...

Temporary Use of Digital Signatures Extended
The IRS has extended the list of federal tax forms that cannot be filed electronically for which it is temporarily allowing digital signatures. The IRS has also extended filing period for which digita...

AL - Employers and state to use IRS test to determine employment status for tax purposes
An employer or state agency responsible for determining an individual’s employment status for Alabama income tax purposes must:use the test enumerated by the Internal Revenue Service in Rev. Rul. 87...

AK - Interest rates announced for Q2 of 2021
The Alaska interest rate for delinquent taxes and overpayment of taxes is set at 5.50%, compounded quarterly, for the period April 1, 2021, through June 30, 2021. The Department of Revenue posting can...

AZ - IRC conformity updated
Arizona has updated its conformity to the Internal Revenue Code (IRC) for income tax purposes. For tax years beginning after 2020, Arizona now conforms to the IRC as amended and in effect on March 11,...

AR - Law enforcement family relief check-off program created
Arkansas corporate and individual taxpayers may contribute a portion of their income tax refund to the Law Enforcement Family Relief Check-Off Program, or may make contributions payable to the program...

CA - Deadline for claiming 2016 tax refunds postponed to May 17
The California State Controller and Franchise Tax Board (FTB) announced that the date for individual income taxpayers to claim a refund for tax year 2016 has been extended to May 17, 2021. Generally, ...

CO - Expiring tax checkoffs extended
Enacted Colorado legislation maintains indefinitely six voluntary contribution options that currently appear on personal income tax returns, unless contributions for a program fall below $50,000 annua...

CT - Individual income tax filing and payment extension reminder
The Connecticut Department of Revenue Services reminds taxpayers that the deadline for filing and payment of 2020 state individual income tax returns has been extended from April 15, 2021, to May 17, ...

DE - Certain sussex county rates changed
The amount of additional Delaware property taxes that may be imposed by a county vocational-technical high school district or county vocational-technical center in Sussex County has changed. The amoun...

DC - Taxpayers warned against scammers
District of Columbia warns taxpayers against scammers pretending to be legitimate tax advisors, tax preparers and tax and business investment advisor. Taxpayers who believe that they are victim of a t...

FL - Florida enacts economic nexus for sales and use tax
Florida has enacted economic nexus for sales and use tax purposes. Out-of-state retailers and marketplace providers with no physical presence in Florida are required to collect Florida’s sales and u...

GA - Federally excluded unemployment must be added back
Georgia released updated income tax guidance stating that unemployment income remains taxable at the state level and must be included in a taxpayer’s income on their Georgia return.Federal LawGeorgi...

HI - Kauai county property tax reminder
The Kauai County, Hawaii, Department of Finance reminds Kauai property owners that the second installment of real property taxes for the 2020-2021 tax year are due Friday, April 23. The extended deadl...

ID - Provision regarding applicability of tax to nonresidents purchasing vehicles amended
Idaho amended an existing law revising provisions regarding the applicability of sales and use tax to certain nonresidents and nonresident business entities purchasing vehicles in Idaho. Ch. 205 (H.B....

IL - Guidance on personal income tax filing and payment extension issued
The Illinois Department of Revenue issued guidance on the personal income tax filing and payment extension for the 2020 tax year. Informational Bulletin FY 2021-16, Illinois Department of Revenue, Ma...

IN - Withholding tax remittance provisions amended
Indiana has enacted legislation:requiring Indiana to provide electronic notice to employers whose income tax withholding is past due; andproviding for annual payroll service provider withholding regis...

IA - Filing extension, unemployment compensation discussed
Iowa has released information about:the personal income tax filing extension; andthe state unemployment compensation exclusion.Filing ExtensionIowa extended the personal income tax filing and payment ...

KS - Disabled access credit modified
Kansas legislation modified the disabled access credit for eligible personal income taxpayers by increasing:the credit limit;the credit phase out thresholds; andthe tax liability threshold for credi...

KY - Kentucky education opportunity account credit created
Kentucky created a credit for contributions to accounting granting organizations (AGOs) that fund education opportunity accounts (EOAs). Effective for tax years beginning after January 1, 2021, taxpay...

LA - Bill proposing to reduce the maximum personal income tax rate passes senate
The Louisiana Senate has passed legislation that proposes to amend the state constitution to reduce the maximum rate of individual income tax. The proposed constitutional amendment would provide that ...

ME - Instructions issued for claiming unemployment compensation exclusion
Maine Revenue Services has issued instructions for claiming an exemption from Maine personal income tax for unemployment compensation benefits received in 2020. Taxpayers with an annual income of less...

MD - Research and development credit extended, amended
Enacted Maryland legislation amends the research and development income tax credit by:extending the termination date;adding definitions;eliminating the basic credit;increasing the amount of growth tax...

MA - Tax filing season FAQs updated
Massachusetts updated frequently asked questions on a variety of personal income tax topics for the filing season, including:the May 17, 2021 filing and payment deadline for 2020 tax returns andthe ne...

MI - Michigan codifies conformity to 2020 federal filing deadline and creates uniformity for city filing deadlines
Michigan has enacted legislation that:codifies the state’s conformity to the federal income tax filing deadline for the 2020 tax year; andautomatically extends city income tax filing deadlines if th...

MN - Appeal against denial of credit denied as untimely
A taxpayer’s appeal against personal income tax working family credit, and the K-12 education credit as denied as the taxpayer failed to file an appeal within 60-day appeal period from the date of t...

MS - Requirement for certain employers to pay June withholding on or before June 25 removed
Mississippi has removed the requirement for employers with an average monthly withholding tax liability of at least $50,000 for the preceding calendar year to pay, on or before June 25, at least 75% o...

MO - New foster care expense deduction allowed
For tax years beginning on or after January 1, 2022, Missouri will allow an income tax deduction for expenses directly incurred by a taxpayer in providing care as a foster parent to one or more childr...

MT - Partnership audit provisions revised
Montana enacted legislation to generally adopt the Multistate Tax Commission model statute for reporting adjustments to federal taxable income and partnership audit adjustments.Within 90 days after th...

NE - New FAQs about deadline extensions posted
Nebraska posted new frequently asked questions about the extension of the personal income tax filing and payment deadline for the 2020 tax year. Frequently Asked Questions about the Tax Year 2020 Ind...

NV - Home office credit ended December 31; tax treatment of credit discussed
Nevada taxpayers previously issued a 2020 estimated Home Office credit amount based on the previous year’s Ad Valorem may apply the Home Office Credit to the 2020 Insurance Premium Tax Reconciliatio...

NH - Filing deadline unchanged
The tax deadline for the State of New Hampshire will remain April 15, 2021. New Hampshire has determined that any extension to the April 15, 2021 due date, even by one month, risks causing confusion a...

NJ - Alternative minimum assessment preempted
The New Jersey tax court has found that the alternative minimum assessment (AMA) is being imposed in violation of federal P.L. 86-272. The AMA imposes either a gross receipts or profits tax exclusivel...

NM - Exclusion from base income enacted for marijuana business expenditures
Enacted New Mexico income tax legislation creates an exclusion from base income for marijuana business expenditures eligible to be claimed as a federal income tax deduction, but that are disallowed by...

NY - Penalty for taxpayer's possession of unstamped cigarettes affirmed
The New York Tax Appeals Tribunal (TAT) affirmed the determination of an administrative law judge (ALJ) sustaining the Division of Taxation’s cigarette tax penalty because the taxpayer had possessio...

NC - SST boundary database updated
North Carolina has updated the boundary database under the Streamlined Sales and Use Tax (SST) Agreement.Effective Date of Boundary DatabaseThe database is updated to include changes effective April 1...

ND - Reporting requirements for special event organizers amended
A special event organizer or promoter must provide a list of all participating vendors to the North Dakota State Tax Commissioner for sales and use tax purposes if there are at least 25 vendors at an ...

OH - Tax holiday dates announced
The Ohio sales tax holiday will take place from Friday, August 6, 2021 through Sunday, August 8, 2021. During this period, the following items will be exempt:An item of clothing priced at $75 or less;...

OK - Unemployment guidance issued
Oklahoma has released guidance for personal income taxpayers regarding the treatment of unemployment benefits received because of the American Rescue Plan Act of 2021.Taxpayers Who Have Not FiledIf a ...

OR - Schedule or-529 instructions for college savings plan direct deposit issued
Oregon issued instructions discussing Schedule OR-529 for Oregon College Savings Plan direct deposit and account creation election for personal income tax purposes. Taxpayers may use Schedule OR-529 t...

PA - Pennsylvania amends corporate filing deadline and enacts filing relief
Pennsylvania has enacted legislation amending the state corporate tax deadline and giving the Departments of Revenue (DOR) and Community and Economic Development (DCED) the ability to deal with state ...

RI - Guidance issued on filing extension
The Rhode Island Division of Taxation has issued guidance on the extension for state personal income tax filing and payments. The deadline for Rhode Island resident and nonresident personal income tax...

SC - Honey bees are exempt
Honey bees qualify as livestock and are therefore exempt from South Carolina sales and use tax. An exemption certificate is not required for the exemption. Revenue Ruling 21-6, South Carolina Departm...

SD - Fact sheet providing overview of property tax issued
The South Dakota Department of Revenue has issued a fact sheet that provides a general overview of how property taxes are established. Property tax is an ad valorem tax on all real property (land and ...

TN - Deduction allowed for covid-19 relief payments
A Tennessee excise tax deduction is allowed for payments received between March 1, 2020, and December 31, 2021, through the following Tennessee economic relief programs funded by federal CARES Act fun...

TX - Local tax collection guide for sellers issued
The Texas Comptroller has issued a guide for sellers on collecting local sales and use taxes. The state rate (6.25%) and any appropriate local rate must be collected on sales of taxable goods or servi...

UT - Taxpayer properly issued assessment against additional income protest denied
An Utah taxpayer failed to substantiate that his 401(k) distributions were non taxable for personal income tax purposes. In this matter, the taxpayer filed a resident personal income tax return with a...

VT - IRC conformity updated, PPP loans and unemployment exclusion addressed
Vermont changed its IRC conformity date from December 31, 2019, to December 31, 2020, for taxable years beginning on and after January 1, 2020.Unemployment ExclusionIn addition, Vermont specifically a...

VA - Local tax rate increases in various counties
Effective July 1, 2021, the local Virginia general sales tax rate increases to 6.3% in:Charlotte County;Gloucester County;Northampton County; andPatrick County.Sales Tax Rates, Virginia Department of ...

WA - Certain mini-bottles exempt from spirits tax
Through July 1, 2023, for the purpose of Washington spirits sales taxes, the term "spirits" does not include mini-bottles sold by a person with a valid endorsement and who is licensed as a spirits, ...

WV - Credit created for arms and ammunition manufacturing facility
West Virginia created a credit for qualified investments in a new or expanded small arms and ammunition manufacturing facility in the state. Eligible taxpayers can claim the credit against West Virgin...

WI - Petition dismissed as commission lacked jurisdiction
For Wisconsin sales and use tax purposes, a taxpayer’s petition for redetermination was dismissed because it was filed untimely and therefore the Tax Appeals Commission lacked jurisdiction over the ...

WY - Taxation of natural gas consumed on-site clarified
Natural gas that is consumed on-site, other than for the purpose of (i) being vented and flared on-site, (ii) reinjection or consumption before sale to maintain, treat, or transport crude oil or natur...