Category: blog&news

blog&news

NEW 2021 REJECT CODE: F8962-070

This is the IRS’ top reject so far across the country, across all software vendors. Please disseminate this to your staff as you see fit.

  • This reject occurs when the IRS database has record of any SSN on the return receiving an advance payment.
    • Taxpayer, spouse, dependent.
  • Even if they received an advance payment for just one month, the 8962 is required.
  • Providers have until January 31st to mail the 1095-A to taxpayers, so many have not received theirs yet.
  • If they dispute the need for the 8962, the return will be processed by hand, which will result in significant delays, usually 3-6 months.
  • History also tells us the IRS tends to bypass the bank products on many of these hand processed returns. They simply mail a check to the taxpayer.
  • We are still awaiting guidance from the IRS about attaching a PDF for dispute/calculations.

This website has a great deal of useful information on the subject:

https://www.healthcare.gov/taxes/

blog&news

2022 TAX SEASON TO BEGIN ON JANUARY 24

Ready for your 2021 tax refund? Mark your calendars because January 24 is the date the Internal Revenue Service will start accepting and processing 2021 income tax returns.

The 2022 tax season will start from Monday, January 24, and end on Monday, April 18, the Treasury Department and Internal Revenue Service said Monday — but brace yourself for potentially sluggish service as the unfunded and backlogged IRS juggles another filing season, Treasury officials said.

“Planning for the nation’s filing season is a massive undertaking, and IRS teams have been working non-stop these past several months to prepare,” said IRS Commissioner Chuck Rettig. “The pandemic continues to create challenges, but the IRS reminds people there are important steps they can take to help ensure their tax return and refund don’t face processing delays. Filing electronically with direct deposit and avoiding a paper tax return is more important than ever this year. And we urge extra attention to those who received an Economic Impact Payment or an advance Child Tax Credit last year. To avoid delays, people should report the correct amount on their tax return.”

The IRS encourages everyone to have all the information they need to make sure they file a complete and accurate return. An accurate tax return can avoid processing delays, refund delays, and later IRS notices. This is especially important for people who received advance Child Tax Credit payments or Economic Impact Payments (American Rescue Plan stimulus payments) in 2021; they will need the amounts of these payments when preparing their tax returns. The IRS is mailing special letters to recipients, and they can also check amounts received on IRS.gov.

To read the full article – CLICK HERE.

blog&news

IRS TAX PAYER ID VERIFY TOOLS!

On November 17th IRS unveiled a new online identity verification process for accessing self-help tools.

In our opinion, the IRS ID verify process was way overdue for an upgrade. Successfully verifying their old platform was an act of GOD. Rumor is… this process is much easier… probably because they outsourced it.

To get to the IRS – ID.ME sign in or create a new account link – CLICK HERE

Child Tax Credit Update Portal – CLICK HERE

Online Account – CLICK HERE

Get Transcript Online – CLICK HERE

Get An Identity Protection PIN (IP PIN) – CLICK HERE

Online Payment Agreement – CLICK HERE

Hope this is helpful!

blog&news

CHILD TAX CREDIT/ ADVANCE CHILD TAX CREDIT

Here is a short update on what changed with the child tax credit & advance child tax credit.

  • One year expansion for 2021 tax year only, per the American Rescue Plan Act of 2021)
  • For tax year 2021, the Child Tax Credit is increased from $2,000 per qualifying child to:
    • $3,600 for children ages 5 and under at the end of 2021; and
    • $3,000 for children ages 6 through 17 at the end of 2021

Note: The $500 nonrefundable credit for other dependents amount has not changed.

  • The advance: 50% of it will be paid in advance with monthly payments. But those montly payments will only rund form July to Decemebr 2021. (The payments will be made on July 15, August 13, Spetember 15, October 15, November, 15 and December 15.) The remaining 50% will be calimed as a credit on your 2021 tax return.
  • Filers can OPT-OUT of the advance by going online and selecting to receive the full CTC on their 2021 tax return instead.
  • IF filers are paid too much (i.e., more than the child tax credit they’re entitled to claim for 2021), they might have to pay back some of the money.
    • Filers with 2021 modified AGI no greater than $40,000 (single filers), $50,000 (head-ofhousehold filers), or$60,000 (joint filers) won’t have to repay any child tax credit overpayments.
    • Filers with a modified AGI from $40,000 to $80,000 (single filers), $50,000 to $100,000 (head-of-household filers), or $60,000 to $120,000 (joint filers) will need to repay a portion of any overpayment.
    • Filers with modified AGIs above those amounts will have to pay back the entire overpayment.
  • The $2,500-of-earned-income required is dropped for 2021, too. Children who are 17 years old also qualify for the 2021 credit.

Phaseout-

  • The Child Tax Credit begins to be reduced to $2,000 per child if your modified AGI in 2021 exceeds:
    • $150,000 if married and filing a joint return or if filing as a qualifying widow or widower;
    • $112,500 if filing as head of household; or
    • $75,000 if you are a single filer or are married and filing a separate return.
  • The first phaseout reduces the Child Tax Credit by $50 for each $1,000 (or fraction thereof) by which your modified AGI exceeds the income threshold described above that is applicable to you.
  • The Child Tax Credit won’t begin to be reduced below $2,000 per child until your modified AGI in 2021 exceeds:
    • $400,000 if married and filing a joint return; or
    • $200,000 for all other filing statuses.

The second phaseout reduces the Child Tax Credit by $50 for each $1,000 (or fraction thereof) by which your modified AGI exceeds the income threshold described above that is applicable to you.

If you prefer, here is the link to FAQ – CLICK HERE