Antonio Ray Harvey | California Black Media
For people who have not yet filed their tax returns, the United States Treasury Department and the Internal Revenue Service (IRS) announced March 21 that they are moving the 2019 income tax filing due date from April 15 to July 15 this year, a three month extension.
After the IRS’s announcement, the state of California postponed its tax deadlines until July 15 due to the COVID-19 pandemic. That update superseded the California Franchise Tax Board’s (FTB) previous announcement that extended the period for filing and payment of taxes until June 15, 2020.
With the approval of the federal government’s $2 trillion stimulus package, designed to ease the financial impact of the global Coronavirus pandemic, taxpayers can take full advantage of several breaks federal and state agencies are offering.
Start by paying attention to the California State Controller's summary of the tax credits. By making sense in the simplest terms, taxpayers could learn that there is more tax-return money on the table for them.
“The COVID-19 pandemic is disrupting life for people and businesses statewide,” State Controller Betty Yee said in a statement addressing filing federal returns and paying taxes owed. “Hopefully, this small measure of relief will allow people to focus on the health and safety of themselves and their families during these challenging times.”
Two tax credits specifically — one federal and the other in California — are aimed at giving families and businesses a lifeline.
For starters, eligibility for the California Earned Income Tax Credit (CalEITC) has been expanded. People who earned less than $30,000 in 2019 — including through self-employment — may qualify, and those who also have a child under age six may be eligible to claim the Young Child Tax Credit (YCTC).
California’s YCTC was introduced in 2019. Upon qualifications for CalEITC and having a child under the age of six as of the end of the tax year, taxpayers could qualify for up to $1,000 through this particular tax credit.
Between CalEITC and YCTC, FTB anticipates returning $1 billion to taxpayers this year.
Taxpayers earning less than $55,952 may also qualify for the federal EITC. Through a combination of CalEITC, YCTC, and the federal EITC, a family can receive up to $8,053.
In a simple breakdown, the following are the qualifications for CalEITC and the Young Child Tax Credit:
· You must be at least 18 years old or have a qualifying child, and earned less than $30,000 during the previous year.
· You must have worked during the tax year with income from W-2 wages, or self-employment, or salaries, or tips, or other employee wages, subject to California withholding (any one of these income sources can qualify),
· This credit can be up to $240 (state) and $529 (federal) with no children, up to $2,982 (state) and $6,557 (federal) for 3 or more children, and various other amounts for 1-2 children.
· You must file both a federal and state return if you are interested in receiving money from both sources. This is actual cash (a windfall for those not familiar with this credit) and is intended to equalize the playing field for wage earners in the under $30,000 category.
You can submit retroactive claims for this credit for up to the last four years. The Volunteer Income Tax Assistance (VITA) program provides free tax help for those uncomfortable with submitting tax filings and earn less than $54,000 a year.
Responding to the economic challenges of the Coronavirus crisis, the federal government passed legislation that will provide up to a $1,200 payment for single individuals, $2,400 for married couples and various tax credits to businesses.
Senate Majority Leader Mitch McConnell (R-KY) introduced the Coronavirus Aid Relief and Economic Security Act (CARES) March 19 as a third-phase effort to address the economic fallout the COVID-19 pandemic has caused.
Jerome E. Horton, a former California state legislator and ex-member of the California Board of Equalization, who is now Chairperson for the Poverty Prevention Alliance, said the piece of legislation is a “good beginning.”
“You can actually get $1,200 per individual, and for a family, it doubles,” Horton told California Black Media. “The important thing about the tax credit is that individuals would have had to file their 2018 tax returns. So it’s important to encourage everyone to file.”
The legislation authorizes the IRS to issue to individuals with incomes of up to $75,000 a one-time $1,200 payment, phasing out at a rate of 5 percent for every $100 in income above
$75,000.
The payment is thus phased out entirely for an individual making $99,000. Married couples with combined incomes of up to $150,000 would receive $2,400, subject to the same phaseout guidelines that apply to individuals.
So, for married couples, the payments would be phased out at $198,000. The provision also provides an additional $500 per child, also subject to a similar incremental phaseout.
The most important key to this tax credit for families and businesses is that emphasis is put on filing the 2018 tax returns, Horton said. They must be filed and the parties filing do not have to worry about previous hardships that prevented them from doing it.
“If you didn’t file because you didn’t think that you owed any taxes or the government didn’t take any taxes out of your check, please go ahead and file,” Horton said. “The individuals who wanted to stay off the radar, should file anyway,” he said, “so that they can take advantage of this stimulus.”
Individuals with disabilities, the elderly and limited English speaking abilities need help filling out tax returns qualify. All income-eligible Californians who need help filing a Personal Income Tax (PIT) return can find it through the VITA program at sites statewide until July 15. All VITA volunteers are IRS-certified and can be trusted not to charge money for their services.
This tax season, the FTB expects to process 20 million PIT returns, and the IRS expects to process more than 150 million PIT returns.
Horton stresses that taxpayers should file for the tax break brought on by the stimulus and file with confidence.
“My understanding is that Congress is planning to do another $4 trillion stimulus package down the road,” Horton said. “They are considering it depending on how (the first stimulus) works itself out. But then, you must file your tax returns,” he said.
#taxes #IRS #covid19 #coronavirus #vita #census2020 #californiacensus #blacknews #blackmedia #africanamericannews #YoungChildTaxCredit
コメント