Updates for Filing Your 2021 Tax Return
Child Tax Credit
In January 2022, the IRS will send Letter 6419 with the total amount of advance child tax credit payments taxpayers received in 2021. People should keep this and any other IRS letters about advance child tax credit payments with their tax records. Individuals can also create or log in to IRS.gov online account to securely access their child tax credit payment amounts.
Economic Impact Payment (Stimulus Payments)
In early 2022, the IRS will send Letter 6475 that contains the total amount of the third economic impact payment and any plus-up payments received. People should keep this and any other IRS letters about their stimulus payments with other tax records. Individuals can also create or log in to IRS.gov online account to securely access their economic impact payment amounts.
Hannah Erickson, Staff Accountant for Devon A. Gaines, CPA, PC, has been featured in a Central Oregon Community College student success story! Read full article
Update – New legislation introduced on Tuesday May 5 that would allow a deduction for ordinary expenses funded by the Payroll Protection Program. See article for details
IRS issues guidance on the forgiveness of PPP loans
On 4/30/20 the IRS issued a ruling in Notice 2020-32 regarding the taxation of forgiven PPP loans. While advertised in the CARES Act any forgiveness of PPP loans would be tax free the IRS has ruled any corresponding expense would not be deductible under IRS Code S. 265. “Specifically, this notice clarifies that no deduction is allowed under the Internal Revenue Code (Code) for an expense that is otherwise deductible if the payment of the expense results in forgiveness of a covered loan pursuant to section 1106(b) of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)”
While the good news is the forgiveness of the loan is not taxable the bad news is the expenses are not deductible either. This may or may not reduce the incentive to use PPP loans over unemployment if you cannot keep your employees working.