COVID-19 and Your Tax Return
This Friday, on the 12th of February, is the official opening date for tax season. On this day, the Internal Revenue Service (IRS) will begin accepting and processing our 2020 tax returns. This start date is around two weeks later than the usual start of the season due to the COVID-19 pandemic. The IRS has set a goal of 21 days or sooner to issue refunds, but before you quickly file your return here are some things to keep in mind:
The pandemic brought us two economic relief payments stemming from the Coronavirus Aid, Relief and Economic Security (CARES) Act. The first relief payment of $1,200 per person was issued last spring, and the second payment of $600 per person was issued at the end of the year. Because the IRS used prior-year
tax return information to determine taxpayers’ relief amounts and issue the payments, some people did not receive their payments and others did not receive the correct amount. In those cases, taxpayers can apply for the Recovery Rebate Credit amounts where they were shorted. Tax credits are dollar-for-dollar offsets of any tax you owe and the Recovery Rebate Credit is refundable.
The Earned Income Tax Credit (EITC) has also been affected by COVID-19. A temporary relief measure is provided through the Taxpayer Certainty and Disaster Tax Relief Act of 2020. If your earned income was higher in 2019 than in 2020, you may use the 2019 amount to calculate your EITC for 2020.
The professionals at The Center are more than knowledgeable on the effects of COVID-19 on your tax return. For more information, please contact us at (618) 997-3436.