Unemployment, the CARES Act, and more – the tax year 2020 has been interesting. The effects of the COVID-19 pandemic will be felt long-term in many arenas. The tax arena is no different. At the federal and state levels, tax year 2020 looks quite different than previous years. Tax Year 2020: COVID Layoffs In March 2020, millions of Americans were furloughed, laid off, and otherwise out of work due to shutdowns and other pandemic precautions, forcing them to file for unemployment. That, coupled with the stimulus checks that in some cases are still being sent out, means reporting income and expenses for tax year 2020 will look very different for employees. However, employers won’t have it easy, either. In 26 states and the District of Columbia, executive orders have been put into effect that state COVID-19-related layoffs “will not be charged against employers for purposes of calculating the experience ratings that determine their UI [unemployment insurance] tax rates,” according to the Tax Foundation. This is being done to help protect businesses from the unprecedented effects of the pandemic and area- or industry-specific shutdowns. States pay unemployment benefits from UI trust funds, which is where employers’ UI taxes go. Typically, if an employer has an unusually high rate of layoffs within their company, this employer will be hit with higher UI taxes than those businesses who have a history of low layoff rates. For tax year 2020, more than half of U.S. states are waiving this penalty, thus preventing employers who experienced high layoff rates due to COVID from being charged for these “extra” unemployment claims. Keep in mind, many states have not yet decided on a course of action, and six states – Arkansas, Maryland, Mississippi, Nevada, South Dakota, and Washington – have stated that employers will still be charged regularly for this year, regardless of the nature of the layoffs. For more in-depth information about this topic, click …
Understanding your e-filing delivery options
The way you decide to utilize an E-Filing system will depend on your industry, type of department, and the size of your company. Even if specific tax forms must be mailed, there are still options that will help to reduce your global footprint and rely less on a paper-only system and its potential issues. Aside from saving on time and resources, E-Filing can also include services such as TIN verification and correction filing. With E-Filing, you’ll also be less at risk for penalties from the IRS. Find out more about 1099 filing penalties here. eFile360 supports 1099, 1098, W-2, and Affordable Care Act forms. Depending on the filing needs of your department and company, you can choose the relevant add-on services to fulfill your needs. If you file with eFile360, you can choose from the following services: Mailing and E-filing E-Delivery Outsourcing TIN Checking Corrections Filing Combined Federal and State Filing Correction Filing Need a correction on a form from this year or the last three years? Don’t sweat it. eFile360 provides complete correction filing, whether you need it now or in the future. This service is offered for the same price as an original form filing. TIN Checking With our TIN Checking service, you’ll be helping yourself in preventing any penalties, tax withholdings, or B-Notices. Verifying the correct Tax ID of a recipient is crucial to submitting tax forms without issue. As an add-on service, you’ll simply select the option for TIN Checking when you submit your forms. Prior to filing your forms, we check the tax IDs to verify that they match the correct ID and name. If there are any issues, we send the files back to you for additional verification. Once the IDs and names match, the forms are e-filed. This simple clarification can save loads of time on verification and eliminate the possibility of withholdings or other issues. E-Delivery Since the IRS requires that recipients receive either electronic or …
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