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IRS issues guidance on state tax payments

August 30, 2023

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.

  • state tax
  • federal tax

2023 Connecticut State Tax Developments

August 16, 2023

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.

  • state tax
  • advocacy - state

Do taxes make people leave CT? Policy group says not so much

August 16, 2023

Connecticut officials have debated for years whether raising taxes on its wealthiest families would prompt them to flee the state.

  • state tax
  • advocacy - state

2023 tax software survey

August 01, 2023

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.

  • state tax
  • technology and cybersecurity
  • federal tax

CT to take a deeper look at whether state taxes are fair

July 14, 2023

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.

  • state tax
  • advocacy - state

Is CT an ‘emerging bright spot’? This national group thinks so

July 14, 2023

New report shows many states, unlike CT, ordered regressive tax cuts that will push their budgets into deficit

  • state tax
  • federal tax

Wayfair at five: No signs of age

June 16, 2023

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.

  • business and industry
  • state tax
  • advocacy - federal
  • federal tax

Finance panel: Next CT tax fairness study must focus on inequality

April 27, 2023

Critics say last study ignored impacts of several state taxes.

  • state tax
  • advocacy - state

CT income tax rate cut OK’d by finance committee

April 19, 2023

But overall tax-cutting plan is less generous than Gov. Ned Lamont’s proposal

  • state tax
  • advocacy - state

Finance Panel Advances Revenue Package, Including Tax Cuts

April 19, 2023

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.

  • state tax
  • advocacy - state

CT income tax exemption for retirement earnings could expand

April 14, 2023

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.

  • personal financial planning
  • state tax
  • advocacy - state

Tax pros need to give ERC claims the 'sniff test'

March 14, 2023

Since its inception, the Employee Retention Credit has been both a boon to employers and a cautionary risk for preparers.

  • coronavirus
  • practice management
  • state tax
  • federal tax

Aggressive Employee Retention Credit Calculations Can Create Professional Liability Risk

March 06, 2023

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.

  • business and industry
  • coronavirus
  • state tax
  • federal tax

How to handle state unclaimed property notices

March 02, 2023

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.

  • state tax
  • federal tax

District Court holds IRS owes tax preparers partial refund of PTIN fees

February 27, 2023

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)).

  • state tax
  • federal tax

Tax season so far: A mixed bag

February 24, 2023

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.

  • state tax
  • federal tax

Too much work, too few warm bodies

February 20, 2023

Every filing season brings new and — all too often — bigger challenges. What's the big headache in this year's run to Tax Day?

  • practice management
  • state tax
  • federal tax

IRS Statement — Taxability of State Payments

February 02, 2023

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.

  • state tax
  • federal tax

Tax season so far: More service, lower refunds

February 02, 2023

This year's tax season, the first post-COVID, began on Jan. 23 with anticipation of a return to normal.

  • state tax
  • federal tax

CT tax cuts are likely, but fierce debate expected over who benefits

January 26, 2023

Lamont expected to ignite the debate next month when he presents his budget proposal.

  • state tax
  • advocacy - state