Tax Relief Available to Ida Victims in Pa.
Pennsylvania victims of the devastating storms spawned by Hurricane Ida now have until Jan. 3, 2022, to file various federal and state individual and business tax returns.
The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual or public assistance. This currently includes Bucks, Chester, Delaware, Montgomery, Philadelphia, and York counties, but taxpayers in impacted localities subsequently designated by FEMA will receive the same filing and payment relief. The list of eligible localities is available on the IRS.gov disaster relief page.
The tax relief postpones various tax-filing and payment deadlines starting on Aug. 31, 2021. As a result, affected individuals and businesses will have until Jan. 3, 2022, to file federal returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2020 return due to run out on Oct. 15, 2021, will now have until Jan. 3, 2022, to file. The IRS noted, however, that because tax payments related to these 2020 returns were due May 17, 2021, those payments are not eligible for this relief. The Jan. 3, 2022, deadline also applies to quarterly estimated income tax payments due Sept. 15, 2021, and the quarterly payroll and excise tax returns normally due Nov. 1, 2021.
The IRS has details on returns, payments, and tax-related actions that qualify for the additional time. The tax relief is part of the coordinated federal response to the damage caused by Hurricane Ida and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov.
The Pennsylvania Department of Revenue also extended filing due dates for various individual and business tax returns for taxpayers in parts of Pennsylvania affected by the storms. Please note there is no extension for state tax payments. Additional details are pending.
Based on the passage of Act 10 of 2021, which the PICPA shepherded through the General Assembly earlier this year, local filing due dates for final returns and quarterly estimates are now tied to those in effect for Pennsylvania. Thus, they will be adjusted to match the extensions on the federal and state level.
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DOL to Conduct Audit Quality Assessment of 2020 Plan Year Filings
A study will be conducted by the U.S. Department of Labor Employee Benefit Security Administration Office of the Chief Accountant (OCA) to assess the quality of audit work with respect to financial statement audits of employee benefit plans for the 2020 filing year of Form 5500. The DOL has performed an audit quality assessment previously (the 2011 plan filing year) in which it reviewed 400 audits.
The OCA expects to make sample selections and begin corresponding with plan administrators and independent qualified public accounting (IQPA) firms later this year. If selected, the IQPA firm will be asked to provide a full set of workpapers supporting the audit.
Read our CPA Now blog for more details and resources. Register for Prepare for the DOL’s 2020 Audit Quality Assessment Webcast on Oct. 1 led by Allison Henry, PICPA vice president of professional and technical standards.
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Pa. DOR Updates Remote Help Supply Service, Tax Credit Bulletins
The Pennsylvania Department of Revenue recently updated two tax bulletins that may be of interest to PICPA members.
Sales and Use Tax Bulletin 2021-03 (Remote Help Supply Services) informs persons responsible for charging, collecting, remitting, or accruing sales or use tax of the taxability of remote help supply services. The bulletin was first issued Sept. 16, 2021. The revised bulletin is effective immediately.
Restricted Tax Credit Bulletin 2021-09 provides guidance regarding the application of restricted tax credits and requirements for selling income tax credits. The restricted tax credit programs to which this bulletin applies are as follows: Research and Development Tax Credit (R&D), Film Production Tax Credit (FILM), Neighborhood Assistance Program (NAP), Resource Enhancement and Protection Tax Credit (REAP), Keystone Innovation Zone Tax Credit (KIZ), Keystone Special Development Zone Tax Credit (KSDZ), Historic Preservation Tax Incentive (HPI), Coal Refuse Energy and Reclamation Tax Credit (COAL), Innovate in Pennsylvania Tax Credit (INOV), Mixed Use Development Tax Credit (MUD), Entertainment Economic Enhancement Program (EEEP), Video Game Production Tax Credit (VGP), Waterfront Development Tax Credit (WDT), Manufacturing and Investment Tax Credit (MITC), Pennsylvania Resource Manufacturing Tax Credit (PRM), and the Local Resource Manufacturing Tax Credit (LRM).
This bulletin replaces Restricted Tax Bulletin 2018-01, Corporation Tax Bulletin 2014-04, Corporation Tax Bulletin 2011-03, and Corporation Tax Bulletin 2008-02 issued July 21, 2008, revised Dec. 12, 2008, and Jan. 15, 2010, and reissued Oct. 20, 2010.
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Clarification Provided on Credit Broker Registration Requirement
The Pennsylvania Department of Revenue (DOR) provided additional guidance to the PICPA about a provision in recently enacted Act 25 of 2021, which seeks to strengthen oversight of the state’s tax credit programs to prevent fraud. Among the changes is a requirement that credit brokers register with the state. The PICPA asked the DOR to clarify the broker activities that would require registration.
According to the DOR, broker registrations will be required beginning in 2022 for all transactions that require the submission of a “Sale or Assignment” application between a buyer and seller or assignor and assignee that is submitted to a department administering the sale and assignment provisions for a restricted tax credit. All representatives of the buyer and seller (or assignor and assignee) must be registered as a broker with the DOR. A web-based platform is currently under development to enable registrations.
Members with additional questions should contact the PICPA government relations team at email@example.com.
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Rep. Patty Kim Named Democrat Chair of House Finance Committee
State Rep. Patty Kim (D-Dauphin) has been appointed Democratic Chair of the House Finance Committee. She replaces Rep. Kevin Boyle (D-Philadelphia).
Kim also serves on the Appropriations, Education, Insurance, and Local Government committees. She is vice co-chair of the southeast delegation. During her second term, she served as treasurer for the Legislative Black Caucus.
Prior to her work in the legislature, Kim served two terms on Harrisburg City Council. She was elected council vice president by her colleagues during her second term.
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Senate Committee Disapproves Wolf RGGI Tax on Energy Producers
The state Senate Environmental Resources & Energy Committee passed a concurrent resolution disapproving a regulation by the state Environmental Quality Board to have Pennsylvania join the Regional Greenhouse Gas Initiative (RGGI).
The committee voted 7-4 to adopt Senate Concurrent Regulatory Review Resolution 1, which disapproves a Wolf administration regulation that paves the way for Pennsylvania to join RGGI, a collaboration of 11 Northeast and Mid-Atlantic states that sets a cap on total carbon dioxide emissions from electric power generators in their states.
The resolution now goes to the full Senate for consideration. The Senate has either 10 legislative or 30 calendar days (whichever is longer) to consider the disapproval resolution. If approved by the Senate the resolution goes to the House, which also has the 10 legislative or 30 calendar days window to pass the resolution and present it to the governor. If the governor vetoes the disapproval resolution, the General Assembly can override the veto with a two-thirds vote in both chambers.
On Oct. 3, 2019, Gov. Tom Wolf directed the Department of Environmental Protection to join the RGGI, which includes Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia.
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DCED Waiver Process Flawed, Says DeFoor
Auditor General Timothy DeFoor released a performance audit criticizing the Wolf administration’s waiver process for businesses that asked to remain open early in the COVID-19 pandemic.
“This audit revealed a flawed process that provided inconsistent answers to business owners and caused confusion,” DeFoor said. “While the pandemic certainly presented some unique challenges, the process was hastily assembled on the fly, unevenly administered, and should be reformed before anything like it is ever used again.”
The audit report contains five findings and related recommendations.
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