Covid-19 Tax Deadlines, Updates, Stimulus Checks: All You Need To Know.

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The past one month has seemed like an eternity. The deluge of information from the Internal Revenue Service and the Government has been relentless and I hope that this blog post helps you, my dear reader, to navigate the flood. So brace yourselves, this is going to be a long read and there is no TL; DR version unfortunately!

The Internal Revenue Service on March 20th announced a "Coronavirus Tax Relief" and extended your tax deadline from April 15th to July 15th 2020. This news was updated to include all deadlines that fell between April 15th, 2020 and July 15th, 2020 to be now July 15th, 2020. This relief was extended to Estates, Gift Tax and Non-Profits as well.

 Let's take a quick look at all the deadlines: 

Estimates: Both your 1st and 2nd Quarter estimates are now due on July 15th. These can be combined and paid on the same day without fear of interest and penalties. Some states however do not follow the same timeline for estimates--make sure you know what that is in your state of residence. 

Taxpayer Living Abroad: If you were a taxpayer living abroad for 2019, your original US tax deadline would have been June 15th. Your return is also now due July 15th, 2020. 

Foreign Information Returns/ Forms: The Internal Revenue Service provided clarification that all foreign income information forms such as Forms 3520, 3520-A, 5471, 5472, 8938, 8858, 8825 etc are all now due with your tax return on July 15th, 2020. 

Foreign Bank Account Regulation Forms {aka FBAR}: The deadlines were NOT changed from April 15th, 2020. However there is an automatic extension to file these until October 15th. My firm's practice is to file an extension anyway for those who file FBAR's and are unable to file their return by April 15th. 

Extension Due Date: Extensions can be filed for those who cannot file their returns by July 15th, 2020. This extended due date still remains October 15th, 2020. 

S Corporations and Partnerships which were due on March 16th, 2020 did not get any reprieve from filing. Those who could not file by March 16th, 2020 should have filed an extension to extend their filing to September 15th, 2020 which is the same as every year. 

The Congress' Stimulus Check was put into in to action quite quickly by the Internal Revenue Service I must say and bank deposits started to go out April 15th. 

Here is what we know so far regarding the stimulus check payments {Or if we do not know we in the tax community have deduced from trends so far}: 

Non-Filers: If you did not need to file a tax return in 2018 or 2019 because your income was below the filing threshold, you can go to this link {Non-Filer Link} and fill out your bank information, so the IRS can deposit your Stimulus Check. Be sure to read the FAQ's on this website and see if you qualify to enter your information here. 

Those Who Have Filed their 2018/ 2019 Tax Return: This is where the major chunk of the taxpayers fall and where I have had the most questions. 

It is not known what "cut-off" date the IRS picked to select your 2018 tax return over your 2019 tax return (or vice-versa) if you have filed both years, in order to calculate your stimulus payment. 

If you have not received your stimulus payment as yet, you can check on the status of your payment, at this link. {Get My Payment}.

This link can also be used to update your bank information with the IRS in the instances as detailed next when the IRS may not have your bank information. 

Here is a nifty chart a dear friend and CPA colleague prepared and I am posting it here for you to determine what your payment will be approximately.  

AGI (Adjusted Gross Income)--> Refer To Line 8b, Page 1 on your 2019 Form 1040 / Line 7, Page 2  on your 2018 Form 1040. 

Chart created by my friend Amie K, CPA at Eide Bailley

• If you got a refund in 2018 and 2019 and you had the refund directly deposited into your bank account, the IRS has your bank information and if you are eligible, you should see a deposit in your account anytime soon.

•  If you owed money in 2018/ 2019 and you had the IRS directly debit the tax due via your over-the-counter software/ your tax professional's software OR you sent the IRS a check OR you paid the IRS online via a credit card or a debit to your bank account, the IRS does not have your bank account information. Your stimulus check, if you are eligible to receive one, will be mailed to you at the address on file.

• If you neither owed tax nor had a refund on your 2018/ 2019 tax return, the IRS does not have your bank information and you will be mailed a check to the address provided via your tax return. 

• If you used an over-the-counter software or went to a big box chain tax preparation store and if you either applied for a refund loan or had the chain take your tax preparation fees out of your refund, the IRS does not have your bank information. Your stimulus check, if you are eligible to receive one, will be mailed to you at the address on file. 

• If you had your 2018 refund applied to your 2019 tax return, the IRS will not have your bank account information. Your stimulus check in this case will be mailed to your address on file. 

Taxpayers Living Abroad: 

If you are taxpayer living abroad, and if your AGI is within the threshold as in the chart above, you are eligible to receive the stimulus payment. Most taxpayers who live abroad may not have filed their 2019 taxes yet. 

1. If living abroad and you filed a return for tax year 2018 and had a refund for 2018 and had it deposited in your US bank account, the IRS has your bank information and will deposit your check. If not chances are this check will be mailed to your foreign address or the US care of address they have on file. 
2. If living abroad and you have not filed returns for 2018, you will not receive a stimulus check. The IRS will only make a deposit into your US bank account if they have a return on file for tax year 2018/ 2019. 

**For those claiming the Foreign Earned Income Exclusion**: As per IRS guidance to date, you are eligible for the stimulus check if your AGI is within the thresholds as stated in the chart above. 

If you have not filed your US tax returns, this would be a good time to catch up on your previous years' filings. There are several programs you can be eligible for to bring your delinquent returns into compliance. Do explore your options with a tax professional experienced with this. 

Taxpayers on Immigrant Visas, SSN's and ITIN's:  

The stimulus payment in theory is based on your residency status and your social security number. If you are on an immigrant visa like H1-B/ L1 etc., have a SSN and have fulfilled substantial presence requirements in the US for 2018/ 2019 and are therefore considered a "resident alien", you should be eligible for the stimulus check. If you have a spouse in the US with whom you file jointly and who has a social security number, you are both eligible for the stimulus check. Same goes for dependents who have SSN's and you claim on your return. 

Any dependents or your spouse with an ITIN { Individual Taxpayer Identification Number} are not eligible to be counted for the stimulus check. However, there has been anecdotal evidence that payments have gone out to those with ITIN's as well. At this time, we do not know if the amount is to be re-paid to the IRS. 

Dependents/ Children Over 17 Years Old or Parents Claimed As Dependents: 

If they did not have any income in 2018/ 2019 and you provided more than half their support, they are ineligible for the stimulus check at the time this post is being published.

Advance Credit: 

If for some reason, you do not receive the stimulus check, know that this is an advance credit for your 2020 taxes and will be eligible to be claimed while filing your 2020 tax return. I understand that your need for cash may be right now unfortunately.

Get My Payment Messages Regarding Ineligibility: 

Tax professionals who have been observing trends over the past few days conclude that most instances of the IRS website ineligibility messages is due to the fact that you have not yet filed your 2019 tax return. They encourage you to file your 2019 tax return ASAP. 

The Internal Revenue Service will start mailing out checks to those who qualify but whose bank account information is not known. We have been informed that this date is April 24th, 2020. If your check is already in the pipeline to be mailed, you may not be able to update your bank information on the IRS' website. 

The IRS has an updated FAQ page for these messages. 

If you have any questions regarding the above, please reach out to a tax professional or please contact our office. 

 --
I am an Enrolled Agent and owner of MN Tax and Business Services PLLC (www.mntaxbiz.com), based in the Metro Detroit area in Michigan, USA. The firm provides Tax Preparation, Planning services to Individuals, Small Businesses, Trusts and Non-Profit Organizations. Get my latest posts by subscribing to my blog.

You can also find me tweeting @ManasaSogNadig where I have been @Forbes Top 100 Tax Tweeters for 2018, 2019 and 2020.