Is COVID-19 Financial Relief Taxable?

It's a confusing time for Americans wondering how to make sense of changing deadlines and new financial assistance. Here is a summary of what financial help may be taxable and what is not.

Economic Impact Payments (Stimulus Payments)

Federal: The payments are not taxable, and they will not reduce a taxpayer’s refund or increase the amount they owe on their 2020 or 2021 tax returns. The ...

The Treasury Department and IRS announced that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021.

Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021 to May 17, 2021 without penalties and interest, regardless of the amount owed. This ...

The Internal Revenue Service announced Thursday that the next batch of Economic Impact Payments will be issued to taxpayers this week, with many of these coming by paper check or prepaid debit card.

For taxpayers receiving direct deposit, this batch of payments began processing on Friday and will have an official pay date of Wednesday, March 24, with some people seeing these in their accounts ...

The American Rescue Plan Act of 2021 provides additional relief for the nation’s small businesses and hard-hit industries including:

$7.25 billion additional for the Paycheck Protection Program, including to expand eligibility to additional nonprofits and digital news services
Additional funds are allocated for the Shuttered Venue Operators Grant program, and now allows businesses to ...

The IRS urges taxpayers whose identities may have been used by thieves to steal unemployment benefits to file a tax return claiming only the income they actually received.

In 2020, some taxpayers received unemployment compensation from their state; this amount is taxable. However, scammers took advantage of the pandemic by filing fraudulent claims for unemployment compensation using stolen ...

When considering your retirement plans during this pandemic, here are three observations and considerations to keep in mind:

The pandemic has created a systemic disruption to the economy in ways that many financial advisors never imagined.
COVID-19 is not a black swan (an event that is unpredictable and rare, but when it occurs, its results are catastrophic).
It's time to rethink “risk ...

The Treasury Department and the IRS issued guidance allowing deductions for the payments of eligible expenses when such payments would result (or be expected to result) in the forgiveness of a covered loan under the Paycheck Protection Program (PPP).

The COVID-related Tax Relief Act of 2020 amended the Coronavirus Aid, Relief and Economic Security Act (CARES Act) to say that no deduction is ...

The IRS has expanded the Identity Protection PIN Opt-In Program to all taxpayers who can verify their identity. The Identity Protection PIN is a six-digit code known only to the taxpayer and to the IRS. It helps prevent identity thieves from filing fraudulent tax returns using a taxpayers' personally identifiable information.

Here are a few key things to know about the IP PIN Opt-In ...

The U.S. Small Business Administration (SBA), in consultation with the Treasury Department, recently released additional PPP guidance and resources (these are clickable links):  

How to Calculate Maximum Loan Amounts for First Draw PPP Loans and What Documentation to Provide – By Business Type (Released Jan. 17, 2021)

Procedural Notice: PPP Borrower Resubmissions of ...

2021 Tax Filing Season Begins Feb. 12. This allows the IRS time to do additional programming and testing of IRS systems following the Dec. 27 tax law changes that provided a second round of Economic Impact Payments and other benefits and avoid possible delays in issuing refunds to taxpayers. These changes ensure that eligible people will receive any remaining stimulus money as a Recovery Rebate ...