Mehanna CPAs & Advisors

Top 3 Available COVID Benefits

Top 3 Available COVID Benefits

There has been innumerable new legislation coming out of Congress recently and a load of guidelines from the IRS to back it up. It changes every month with new rules in the pipeline shortly thereafter. In this article, we summarize the most 3 of the most recent benefits that are available for an individual. 

The $1,400 stimulus check is out now

The $1,400 stimulus checks are part of the American Rescue Plan passed by Congress earlier this month. The checks could amount up to $1,400 per individual, plus $1,400 per dependent, as long as certain criteria are met.

In recent events, the IRS finally sends instructions for those individuals who have not received it yet, including those with Social Security, SSDI, SSI, VA, or RV, low income, no income, and those individuals who filed a tax return or did not file a tax return.

The IRS has confirmed that they have sent out an additional 2,000,000 payments this week.  That number is broken down to 320,000 to VA beneficiaries, while 850,000 individuals who did not have information with the IRS but filed their 2020 returns. 700,000 payments went out to individuals for their “plus up” or those payments owed to individuals who received a partial payment of the $1,400 check. Further, 72,000 from Social Security, SSDI, SSI beneficiaries received or will receive their payments this week. The dispatched payments totaling 1.2M were sent as deposits while 800,000 were sent as checks.

The IRS encourages the taxpayer to file your income tax return for 2020 even if you don’t typically do so, in order for the IRS to get your information needed for such things as the expanded child tax credit that will be going out this July.

While waiting for your check, you might want to look forward to a 4th Stimulus check which seems to already be in the pipelines. We now have 74 lawmakers backing up a 4th stimulus check, calling on the president to include in his infrastructure package a provision for a $2,000 stimulus check. 

The Expanded Child Tax Credit will roll out on July 1

The American Rescue Plan Act expanded the Child Tax Credit to curb child poverty and support additional family earnings. The provision increases the amount of the Child Tax Credit from $2,000 to $3,600 for children under the age of six, and $3,000 for other children under the age of 18 through the rest of the year. However, the change, while welcomed, created a major task for the IRS which added to the already massive undertaking of the agency with regard to the tax season and the lineup of new tax laws created to counter the pandemic. 

The credit payments will be made through advance payments starting July 1, to December 31, 2021. The credit is also now made fully refundable to support low-income households and enable them to receive income now rather than wait for 2022 during the filing of their returns.

The IRS gives penalty relief on employment tax payments 

For employers who are required to pay qualified sick leave wages and qualified family leave wages by the Consolidated Omnibus Budget Reconciliation Act (COBRA), you are in luck. The IRS recently announced an easing of sanctions if the employer fails to deposit employment taxes with the IRS on a timely basis.

In Notice 2021-24, the IRS allowed employers to pay qualified sick leave wages and qualified family leave wages, qualified wages, and COBRA continuation coverage premiums using Employment Taxes that would otherwise be required to be deposited without incurring a failure to deposit penalty. 

Updates are inevitable 

From now on, with the escalating cases of the pandemic and the impending infrastructure package from the president, we can only expect more guidelines and legislation to pass. Subscribe to us for more accessible news updates.

 

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