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Chaya Kundra

Latest updates from the IRS

| Mar 15, 2021 | blog |

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Employers to Defer WH Tax DEPOSITS(Notice 2020-65, 2020-38 IRB 1).

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Employees who earned less than $4,000 in wages every two weeks between 9/1/20 and 12/31/20 are able to use this deferral. With this deferral, the employer is required to pay all applicable taxes ratably between 1/1/21 and 12/31/21, otherwise interest will begin to accrue by 1/1/22. . (Notice 2021-11, 2021-6 IRB 827) See AnchorIRS updates deferred payroll tax withholding/deposit Notice to reflect CAA (01/20/2021).

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It is important to note that deferral payments must be separate from other tax payments, as this allows the payment to be applied to the deferred payroll tax balance. In addition, any employee who deferred their social security tax but is no longer employed by that employer would be responsible for full repayment of the deferred amount. FTC 2d/FIN ¶S-5501.1.

IRS Updates FAQs on Virtual Currency Transactions

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The IRS released an updated FAQ document that explained that individuals who used real currency to purchase virtual currency but did not have any additional virtual currency transactions throughout the 2020 calendar year did not have to respond with a “yes” answer to the question regarding virtual currency transactions on their 2020 tax return form. see FTC 2d/FIN ¶I-2150 et seq.

Native American Taxpayer

The IRS released a publication for Native American individuals and sole proprietors that provided guidance about the taxability of certain forms of income that they may receive. It also discusses how to report that income.

IRS Guidance on 501(c)(4)

The IRS provided guidance to organizations in this category that do not file the “intent to operate” form by the deadline and discusses the penalties that will be implemented. Code Sec. 501(c)(4) identifies these organizations as charitable organizations that work to promote social welfare. In some cases, employee associations may qualify.

Maryland Comptroller Extends 2020 Income Tax Filing Due Date to July 15, 2021 

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Maryland residents have until July 15, 2021 to file their income tax returns and pay their taxes. No interest or penalty fees will be applied during this time period. It is important to note that this extension is available to individual taxpayers as well as fiduciary, corporate and pass-through taxpayers. (News Release, Maryland Comptroller’s Office, 03/11/2021AnchorTax Alert: Extension of Time to File and Waiver of Interest and Penalty for Certain Filers, Maryland Comptroller’s Office, 03/11/2021.)

Maryland Tangible Personal Property and Services Subject to Tax Updated

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The Maryland Comptroller’s Office has updated a current list of property and services that are subject to sales and use tax. The change was made due to legislation that was recently approved. The sales and use tax rates for electronic smoking devices, digital products and digital codes were increased.. (List of Tangible Personal Property and Services Subject to Sales and Use Tax, Maryland Comptroller’s Office, 03/11/2021.)

Maryland Issues Guidance on the Imposition of Sales and Use Tax on Digital Products and Digital Code

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Digital products, including digital code, are now subject to a 6% sales and use tax in Maryland, beginning March 14, 2021. (Maryland Tax Tips No. 29, 03/09/2021.)

Maryland Comptroller Extends Sales and Use Tax Return Due Date for March, April and May 2021 to July 15, 2021

Taxpayers in Maryland benefit from an automatic extension that allows them to file and pay taxes from March, April and May of this year by July 15, 2021. No interest or penalties will accrue during this time period. (News Release, Maryland Comptroller’s Office, 03/11/2021Tax Alert: Extension of Time to File and Waiver of Interest and Penalty for Certain Filers, Maryland Comptroller’s Office, 03/11/2021.)