The IRS today provided guidancePDF on the federal tax status of refunds of state or local taxes and certain other payments made by state or local governments to individuals. The IRS previously provided guidance on state payments made in 2022 in news release IR-2023-23, IRS issues guidance on state tax payments to help taxpayers.
The following is intended to provide an overview of certain legislation enacted during the 2023 regular session of the Connecticut General Assembly. The information below is not intended to be a complete analysis of each and every aspect of recently enacted legislation but is intended to inform and alert taxpayers and practitioners of the enactment of such legislation.
Connecticut officials have debated for years whether raising taxes on its wealthiest families would prompt them to flee the state.
The software that CPA tax preparers use to prepare clients' income tax returns is one of their most important professional tools. These products vary not only in such basic features as how tax return data is input and displayed but also in their adaptability to the myriad variations in tax clients' sources of income, deductions and credits, and other pertinent details. CPAs naturally take a keen interest in how performance of the products compares.
Connecticut’s next study on tax fairness will go even deeper than its first two assessments, which concluded the poor and middle class proportionally pay much more than Connecticut’s wealthy.
New report shows many states, unlike CT, ordered regressive tax cuts that will push their budgets into deficit
It has been five years since the U.S. Supreme Court heard South Dakota v. Wayfair. The court decided on June 21, 2018, that states could tax purchases made from out-of-state sellers, even if the seller does not have a physical presence in the taxing state. Much of what has happened in state tax law since then has been based on that decision.
Critics say last study ignored impacts of several state taxes.
But overall tax-cutting plan is less generous than Gov. Ned Lamont’s proposal
The Connecticut legislature’s finance committee advanced a two-year tax plan on Wednesday that disqualifies some wealthier households from the income tax cuts proposed by Gov. Ned Lamont while broadening an expansion of the Earned Income Tax Credit for the working poor.
While a proposal to exempt all pension and annuity earnings from state taxation has bogged down, the General Assembly’s tax-writing committee has crafted a compromise that would exempt more middle-income retirees from paying taxes on these earnings.
Since its inception, the Employee Retention Credit has been both a boon to employers and a cautionary risk for preparers.
The Employee Retention Credit (“ERC”), originally enacted under the 2020 Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and as subsequently amended, was designed to encourage businesses to keep employees on their payroll through a refundable tax credit based on qualified wages. Like many other credits, businesses claiming an ERC must reduce the deduction for salary and wages by the amount of the credit received.
C-suite individuals receive a plethora of important letters, many of which pertain to certain compliance requirements for their companies. Some of these letters come from states and deal with unclaimed property. Understanding and being familiar with the type of mailing received is important. If handled improperly, unclaimed property notices may result in increased risk for companies.
The IRS must determine the appropriate partial refund amount for tax return preparers who it overcharged for their preparer tax identification numbers (PTINs) from 2011 to 2017, a district court held in an opinion unsealed last week (Steele, No. 1:14-cv-1523-RCL (D.D.C. 1/23/23)).
Better phone service from the Internal Revenue Service, overly aggressive third-party-induced Employee Retention Credit claims, a talent shortage, and the sheer amount of updated tax knowledge necessary for preparers are among the big factors of this year's filing season for tax preparers.
Every filing season brings new and — all too often — bigger challenges. What's the big headache in this year's run to Tax Day?
The IRS is aware of questions involving special tax refunds or payments made by states in 2022; we are working with state tax officials as quickly as possible to provide additional information and clarity for taxpayers. There are a variety of state programs that distributed these payments in 2022 and the rules surrounding them are complex. We expect to provide additional clarity for as many states and taxpayers as possible next week.
This year's tax season, the first post-COVID, began on Jan. 23 with anticipation of a return to normal.
Lamont expected to ignite the debate next month when he presents his budget proposal.