The first checks from the latest COVID-19 relief bill hit taxpayers accounts last night. These funds are a welcome relief to many individuals impacted by economic shutdowns across the country. This is great news for folks getting a check but bad news for folks who filed early returns. The relief bill is worse news for those who prepare and filing tax returns.
Tax professionals are asking for relief FROM the COVID relief bill because the taxability of some 2020 income was changed when the law was passed. The taxability changes will force some already filed returns to be amended. On top of everyone who is waiting until April to complete and file their return, tax professionals have to help folks who already filed to amend and resubmit their returns.
Taxpayers, tax professionals, and the software companies that assist or interact with the IRS will take some time to adjust to these changes. The AICPA, the world’s largest member association representing the accounting profession, has already been urging the IRS to extend filing deadlines.
Last year, we saw the IRS postpone the individual filing deadline and tax payment due date from April 15th to July 15th. This automatic extension relieved some of the burdens that tax professionals faced, as many had to adapt from their traditional client facing processes. This year, folks who received unemployment benefits in 2020 may need to refile their tax return to reclaim their tax overpayments.