Every year brings some changes to the tax code, but 2020 has brought more than most as the COVID-19 pandemic upended life in ways we could never have anticipated. Some of these changes have opened up new tax deductions, while others have eliminated some common tax penalties -- at least for this year.

Staying abreast of these changes is crucial for minimizing your tax liability, so I've outlined three of the most important tax-saving opportunities for 2020 below. They may not all apply to you, but take advantage of the ones that do to help you hold on to more of your money this year.

IRS.gov has answers to many questions people may have about their Economic Impact Payment. Here are answers to some of the top questions people are asking about these payments. 

Is this payment considered taxable income?

No, the payment is not income and taxpayers will not owe tax on it. The payment will not reduce a taxpayer’s refund or increase the amount they owe when they file their 2020 tax return next year. A payment also will not affect income for purposes of determining eligibility for federal government assistance or benefit programs.

For those who secured Small Business Administration (SBA) Paycheck Protection Program (PPP) loans, the conversation is now focused on two things:

1. How to calculate and determine loan forgiveness scenarios
2. Loan necessity

In general, some or all of the loan granted under the program may be forgiven if used on allowable expenses over the eight-week period after receiving the loan. This is subject to several rules around the components of the expenses as well as a comparison of the level of full-time equivalent (FTE) during the eight weeks post-funding to a base period.

However, there’s some ambiguity with the criteria and almost daily the SBA is issuing frequently asked questions and responses that impact the interpretation of the CARES Act provisions.

The Coronavirus, Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020. The CARES Act included $349 billion allotted to the PPP.

The initial $349 billion contribution to the program lasted less than two weeks with around 1.7 million businesses receiving loans that averaged just over $200,000 each. On April 21, 2020, Congress announced plans to provide an additional $310 billion, which has now been funded.

So how is loan forgiveness calculated and how is forgiveness granted?

The IRS issued Notice 2020-32 on the deductibility for federal income tax purposes of some otherwise deductible expenses incurred in a taxpayer’s trade or business when the taxpayer receives a loan through the Paycheck Protection Program (PPP).

The PPP loan program was enacted as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Included in the program is a loan forgiveness provision. Amounts eligible for forgiveness are based on funds used to cover certain payroll, mortgage interest, rent and utility costs paid within eight weeks of the loan’s origination date. In enacting the program, Congress stated the debt forgiveness “shall be excluded from gross income,” but did not codify or otherwise clarify the exclusion. Subsequently, the IRS weighed in with guidance under Notice 2020-32.

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Securities (CARES) Act, a $2.3 trillion relief package designed to help individuals and businesses weather the economic damage caused by the COVID-19 pandemic.

The headliner of the CARES Act was the creation of the Paycheck Protection Program (PPP), a new loan package designed to put $350 billion into the hands of small businesses for use in paying employee wages and other critical expenses over the coming weeks and months. As of the morning of April 15 , nearly $250 billion in cash had made its way to over one million small businesses, and Congress had already begun negotiations on a second round of PPP funding.

Getting a quarter of a trillion dollars to small businesses in less than two weeks is no small feat, and predictably, borrowers have encountered no shortage of procedural challenges along the way. When the program initially opened on April 3 , many banks, including large national institutions like Wells Fargo, were not prepared to accept applications. Among those banks that were ready to go, many shut the door on any applicant with whom they didn’t have an existing banking relationship. And when applicants could find a willing lender, they quickly learned that small ambiguities in the legislative text of the CARES Act led to BIG problems in computing the maximum loan proceeds.

You can read about those problems here, but by the time you’re finished with that article, it’s likely that nearly all of the first round of PPP funding will be committed. As a result, it’s time to turn our attention to the next round of potential problems—problems that promise to be far more painful for borrowers than any headaches they endured throughout the application process.

Working with the Treasury Department, the Internal Revenue Service today unveiled the new Get My Payment with features to let taxpayers check on their Economic Impact Payment date and update direct deposit information.

With an initial round of more than 80 million Economic Impact Payments starting to hit bank accounts over the weekend and throughout this week, this new tool will help address key common questions. Get My Payment will show the projected date when a deposit has been scheduled, similar to the “Where’s My Refund tool” many taxpayers are already familiar with.

Get My Payment also allows people a chance to provide their bank information. People who did not use direct deposit on their last tax return will be able to input information to receive the payment by direct deposit into their bank account, expediting receipt.

Taxpayers and CPAs across the country are faced with unprecedented challenges this filing season in light of the COVID-19 pandemic and related closures and shelter-in-place orders. Based on member feedback, the AICPA has identified seven key areas in need of immediate relief and provided the latest developments (below) to the 20 most frequently asked questions on tax filing and payment relief.

Correspondence

Q1: Due to office shutdowns in major cities, taxpayers and tax preparers may not timely receive or respond to IRS communications/notices that are sent by mail. Will the IRS provide any relief for late responses due to COVID-19?
A1: Unfortunately, the IRS has not expressly announced any relief for affected taxpayers in regards to correspondence. AICPA will continue to urge Treasury and IRS to provide generous and automatic relief for issues related to administrative actions such as expiring statues of limitations, the processing of correspondence and other actions not already covered by previous relief related to COVID-19.

Emergency Declaration

Q2: If the United States has been declared a disaster area by the President, why is section 7508A relief not granted?
A2: Good point. Typically, when the President invokes the Robert T. Stafford Disaster Relief and Emergency Assistance Act, taxpayers are granted broad payment and filing relief under section 7508A. However, the IRS’s approach to COVID-19 has not been consistent with how the agency treated tax payment and filing deadlines over the last several years following a federally-declared disaster.

The AICPA continues to advocate the need for comprehensive relief with Treasury and IRS officials. This is a priority for our members.

• Nevada Business Closures: The Governor issued Directive 003 within his Declaration of Emergency. Please read it carefully, especially Sections 8 & 9 to determine if your company may continue to operate and the consequences associated with violations. The official directive can be found here.
• Small Business Loans: Nevada is one of the first states to be approved for SBA Disaster Relief Loans. Funds are limited so please encourage your clients (and yourselves if applicable) to apply immediately. Please note: this application can be cumbersome for clients and they may need your assistance. Please visit here  for more information.
• State Income Tax Filing: Many of you file federal and state income taxes for clients. Each state determines its filing due dates. The AICPA has a list of each state’s filing dates. Please be sure to refresh the page as changes are happening hourly.
• Nevada Tax Filing and Payments: The State of Nevada provided the following response regarding state tax filing and payment due dates:

I. PURPOSE
On March 13, 2020, the President of the United States issued an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act in response to the ongoing Coronavirus Disease 2019 (COVID-19) pandemic (Emergency Declaration). The Emergency Declaration instructed the Secretary of the Treasury “to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency, as appropriate, pursuant to 26 U.S.C. 7508A(a).” Pursuant to the Emergency Declaration, this notice provides relief under section 7508A(a) of the Internal Revenue Code for the persons described in section III of this notice that the Secretary of the Treasury has determined to be affected by the COVID-19 emergency.

II. BACKGROUND
Section 7508A provides the Secretary of the Treasury or his delegate (Secretary) with authority to postpone the time for performing certain acts under the internal revenue laws for a taxpayer determined by the Secretary to be affected by a Federally declared disaster as defined in section 165(i)(5)(A). Pursuant to section 7508A(a), a period of up to one year may be disregarded in determining whether the performance of certain acts is timely under the internal revenue laws.

With the start of the 2020 tax filing season near, the Internal Revenue Service is reminding taxpayers to avoid unethical “ghost” tax return preparers.

According to the IRS, a ghost preparer does not sign a tax return they prepare. Unscrupulous ghost preparers will print the return and tell the taxpayer to sign and mail it to the IRS. For e-filed returns, the ghost will prepare but refuse to digitally sign as the paid preparer.

By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a valid Preparer Tax Identification Number, or PTIN. Paid preparers must sign and include their PTIN on the return. Not signing a return is a red flag that the paid preparer may be looking to make a fast buck by promising a big refund or charging fees based on the size of the refund.