The IRS Has 3 Million Unopened Pieces of Mail!
1) Form 1099 NEC for California –
We discovered the IRS is not forwarding the Forms 1099-NEC to most states…as it has for Forms 1099-MISC in past years. This is because the form is new and, oddly, the normal document sharing process between the I.R.S. and state tax authorities has not been established for this particular form.
For California filing purposes, I have attached the link to California FTB 1099 info sheet for your reference.
https://www.ftb.ca.gov/file/business/information-returns.html
The 1099-NECs are due to California 2/28/21 per the attachment. Since that date is a Sunday, it is extended to Monday, 3/1/21.
If you used a service to process your 1099s, please check with them to see if they can (or did) e-file the state copy for you. If you did them manually, you can mail the paper form. The address to file the paper forms is:
Franchise Tax Board
PO Box 942840
Sacramento, CA 94240-6090
As an additional option, GROCO does have an FTB Swift e-filing account. To use this, we will need to input your company information and details from your Tax Year 2020 IRS Form 1099s in our system before we can e-file them. Please let us know if you would like this option.
If you are located in a different state and need assistance with that state’s requirements, please contact us.
2) IRS Apology regarding Notices for unfiled returns:
https://www.irs.gov/newsroom/irs-statement-about-cp59-notices
3) Economic Impact Payments:
IRS Website Information:
https://www.irs.gov/newsroom/as-required-by-law-all-first-and-second-economic-impact-payments-issued-eligible-people-can-claim-recovery-rebate-credit
Forbes Article:
https://www.forbes.com/sites/anthonynitti/2021/02/09/democrats-propose-round-three-of-covid-related-stimulus-checks-what-you-need-to-know/?sh=425638de27f9
4) Educator Deductions for COVID protective supplies:
https://www.irs.gov/newsroom/educators-can-now-deduct-out-of-pocket-expenses-for-covid-19-protective-items
5) PPP forgiveness: One step closer for California businesses (02-18-21)
“Governor Gavin Newsom, Senate President pro tempore Toni G. Atkins, and Assembly Speaker Anthony Rendon announced that they have reached an agreement on a package of immediate actions that will speed needed relief to individuals, families, and businesses suffering the most significant economic hardship from the COVID-19 recession.
Included in the agreement is partial conformity to new federal tax treatment for loans provided through the Paycheck Protection Program, allowing companies to deduct up to $150,000 in expenses covered by the PPP loan. All businesses that took out loans of $150,000 or less would be able to maximize their deduction for state purposes. Firms that took out higher loans would still be subject to the same ceiling of $150,000 in deductibility. This tax treatment would also extend to the Economic Injury Disaster Loans as well.
The proposal also includes stimulus payments to individuals, fee waivers for bars and restaurants, and continued grants of up to $25,000 for California businesses.
Do not start filing returns and excluding up to $150,000 from clients’ PPP loan forgiveness, as this is not law yet.” (Spidell Publishing, Inc.)
News Release: Office of Governor Gaving Newsom:
https://www.gov.ca.gov/2021/02/17/governor-newsom-legislative-leaders-announce-immediate-action-agreement-for-relief-to-californians-experiencing-pandemic-hardship/
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