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We're working to keep you informed in a world that changes by the minute. If you have anything you'd like to share, or if we can help you in any way, please reach out to Zach Donah at zdonah@mscpaonline.org or 617.303.2411, or Larry Liuzzo at lliuzzo@mscpaonline.org or 617.303.2405.
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Governor Baker Announces $45.6 Billion Fiscal Year 2022 Budget
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Governor Baker announced a $45.6 billion Fiscal Year 2022 budget yesterday, which includes no tax increases on Massachusetts residents, commits $1.168 billion to municipalities, authorizes a withdrawal of $1.6 billion from the Commonwealth’s stabilization fund and more.
Among the proposals in the FY22 budget include, but are not limited to:
The Governor’s budget now heads to the Legislature where the House and Senate will begin debate and craft respective budgets.
We will keep you updated on these proposals as we continue to learn more information.
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IRS: Tax Filing Season to Start Friday, February 12
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The IRS announced last week it will begin accepting and processing 2020 tax returns on
Friday, February 12.
According to the IRS press release, “The February 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.”
For tax filing tips and key tax filing season dates, click here.
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MSCPA Calls on Legislature to Address State Tax on Forgiven PPP Income
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The MSCPA worked with Senator Eric Lesser’s office to re-file SD.172,
An Act providing financial relief to small businesses during the COVID-19 pandemic
that will address the Massachusetts tax on the inclusion of income associated with forgiven PPP loans.
We have shared your concerns with leaders in the Legislature, Committee staff and various House members calling for swift, corrective action. In a recent interview with the
Boston Globe, MSCPA President & CEO, Amy Pitter, suggested this language be amended to fast-moving legislation, such as the Governor’s Unemployment Insurance bill, so that individuals will have the critical relief available by the time their taxes are filed this season.
We are grateful to Senator Lesser and to all of the bill co-sponsors for understanding the importance of this legislation and the impact it will have on taxpayers.
We will keep you posted on all progress made.
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Massachusetts Department of Revenue: How to Report Fraud
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The Massachusetts Department of Revenue (DOR) and the Department of Unemployment Assistance (DUA) recently released information on how to report unemployment compensation identity fraud.
Please find information from the DOR and DUA below:
Form 1099G: Unemployment Compensation – How to Report Fraud
As you know, anyone who received unemployment benefits or pandemic unemployment benefits from the Commonwealth of Massachusetts during 2020 will receive a Form 1099-G, Certain Government Payments, showing the amount of unemployed compensation received. This income is taxable and must be reported on the 2020 Massachusetts Individual Income Tax Return Form 1 or Form 1-NR/PY.
If a taxpayer receives a Form 1099-G reporting unemployment benefits but did NOT receive unemployment benefits, someone may have used their identity to falsely claim unemployment benefits. Ask them to notify the DUA by filing a fraud report online or call the DUA customer service department at 877-626-6800. Obviously, this income should not be reported on their Massachusetts individual income tax return. After DUA reviews the fraud report, they will send a corrected Form 1099-G. Keep a copy of all Forms 1099-G with the taxpayer’s 2020 tax records and be aware that DOR may ask for an explanation of why the amount shown on the Form 1099-G was not reported on the return.
For more information and resources, click here.
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2020 Earned Income Tax Credit Information
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Included in the last federal COVID-19 financial relief package signed in late December 2020 is a lookback provision that allows taxpayers who qualify for the Earned Income Tax Credit (EITC) to choose either their 2019 or 2020 income earnings, whichever is higher, for this year’s EITC.
To figure the EITC credit, click here.
For more information and resources on the EITC, click here.
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IRS: Tax Filing Season to Start Friday, February 12
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The IRS recently announced it will begin accepting and processing 2020 tax returns on
Friday, February 12.
According to the IRS press release, “The February 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.”
For tax filing tips and key tax filing season dates, click here.
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Guidance for Paycheck Protection Program (PPP)
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DOR & IRS Updates
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