2015 Illinois Tax Refunds

The Illinois Department of Revenue has announced that as a result of new security measures and to help combat tax identity theft, they will not be sending out refunds on 2015 Illinois tax returns filed in the early part of this upcoming tax season until after March 1, 2016.

Here is the anticipated timeframe for when refunds on electronically filed Illinois returns will be issued: 

• Filed prior to March 1 – Within two to three weeks from March 1, 2016. 

• Filed after March 1 – Within two to three weeks from the date the return is accepted.

IRS Announces Start Dates for 2016 Filing Season

The IRS has announced the start dates of the 2016 filing season.

Individual returns (1040): Tuesday, January 19, 2016
Business returns (1120, 1120-S, and 1065): Saturday, January 9, 2016

See the 2016 Tax Season Opens January 19 for Nation's Taxpayers news release (December 21, 2015) on the IRS website for more information on the start date for individual (1040) returns.

Details of the 2015 Tax Extender Legislation Just Passed by Congress

Today, December 18, 2015, Congress passed the Protecting Americans from Tax Hikes Act of 2015 (Amendment to HR 2029). Congress re-enacted all 50+ expired tax provisions that had expired at the end of 2014 by making some of them permanent, extending a few for 5 years, and extending the remainder for 2 years. The legislation also includes additional provisions that are related to the earned income tax credit, due diligence requirements for child tax credit and the education credit, and other administrative items that will affect tax preparers and taxpayers. This legislation will become law once the President signs it.

The tax provisions that expired at the end of 2014 were re-enacted as follows:

Provisions Made Permanent

Listed below are some of the most relevant provisions that were made permanent:

•  Educator Expense Deduction – Form 1040, line 23
•  Itemized Deduction for Sales Tax – Schedule A, line 5
• Increased Section 179 Expense Deduction Amounts

o   Maximum Deduction: $500,000

o   Maximum cost before the limit is reduced: $2,000,000

• Qualified Real Property category for Section 179 Expense Deduction

o   Maximum deduction: $250,000 for 2015, $500,000 after 2015

o   Qualified property includes: leasehold improvements, restaurant property, and retail improvement property

o   Added air conditioning and heating units beginning in 2016

• Exclusion from income for employer-provided mass transit benefits
• 15 year straight line depreciation for qualified leasehold restaurant and retail improvements
• Employer wage credit for active duty members of the uniformed services
• Research and Development Credit
• 5 provisions related to charitable contributions
• 4 additional provisions related to businesses
• 3 provisions related to real estate investment

The following provisions as they currently exist (but were set to expire at the end of 2017) were also made permanent:

•  Income threshold for Additional Child Tax Credit is permanently set at $3,000
•  Enhanced American Opportunity (Education) Credit
•  Expanded Earned Income Tax Credit

Provisions Extended for 5 Years (2015 – 2019)

• 50% Bonus Depreciation
• Work Opportunity Credit and New Markets Credit

Provisions Extended for 2 Years (2015 and 2016)

The remaining 30 expired provisions were extended for two years. Here is a list of some of the more relevant provisions for individuals:

• Exclusion of gain from income of foreclosed home mortgage debt (Form 982, line 1e)
• Tuition and Fees Deduction - Form 8917/Form 1040, line 34
• Nonbusiness Energy Property Credit – Form 5695, Part I
• Ability to treat mortgage insurance premiums as qualified mortgage interest
• 14 provisions related to businesses
• 12 additional provisions related to energy and conservation

Other New Provisions

The legislation also included what Congress is calling “program integrity provisions,” all of which go into effect beginning with Tax Year 2016 as follows:

• The due date for employers to file with SSA and IRS Form W-2s and 1099s will be January 31 beginning in 2017 for 2016 wage and information forms.
• The provisions expand paid preparer EITC due diligence requirements and the associated $500 penalty to include the child tax credit and the American Opportunity Education credit.
• The IRS can now bar an individual whom has fraudulently claimed the earned income tax credit for ten years.
• The IRS can bar an individual whom has intentionally disregarded the rules from claiming the child tax credit and/or the American Opportunity Credit for two years.
• The provisions prohibit a taxpayer from retroactively claiming the earned income tax credit, child tax credit, or American Opportunity Education Credit for any year the individual or qualifying child did not have a taxpayer identification number.
• There is an increase to the penalty for tax preparers who engage in willful or reckless conduct to the greater of $5,000 or 75% of the preparer’s income with respect to the return.
• There is now a requirement that the EIN of an educational institution be reported on Form 8863.

For more details and a complete list of all the provisions included in this legislation see the following:

• House Ways and Means Section-by-Section Summary of the Proposed “Protecting Americans From Tax Hikes Act of 2015 
• Joint Committee on Taxation’s Technical Explanation of  The Protecting Americans From Tax Hikes Act of 2015

Form 1095-A, Health Care Exemptions, and Individual Shared Responsibility Payment (Penalty) for 2015

As we approach the beginning of the 2016 filing season, here are some reminders about the Form 1095-A, exemptions from the requirement to have health insurance, and the increase in the individual penalty (individual shared responsibility payment) amount for 2015 federal income tax returns.

Importance of Form 1095-A 
In early 2016, the Form 1095-A (Health Insurance Marketplace Statement) will be received by the approximately 10 million individuals that obtained their 2015 health insurance at the Federal or a State Marketplace. The Form 1095-A is needed by these taxpayers in order to complete the 2015 Form 8962 (Premium Tax Credit) to calculate their premium tax credit for 2015 and, for those who received a subsidy, to complete the reconciliation of the subsidy with the actual credit.

The 1095-A should be received:

• By those who used the Federal Marketplace – by January 31, 2016
• By those who used a State Marketplace – Early February 2016

A copy of the Form 1095-A will be available online for those who used the Federal Marketplace via their account on healthcare.gov. It may also be available online for those who used a State Marketplace as well.

Also, any taxpayer that received a subsidy must complete the Form 8962 and include it with their 2015 federal return. If the Form 8962 is not included with the original federal return, the processing of the return will not be completed until a completed Form 8962 is sent to the IRS.

Health Care Coverage Exemptions
Most individuals who did not have health insurance for all or part of 2015 probably qualified for an exemption. Therefore, it is important that before any penalty is calculated that an individual determines whether they may qualify for a health care coverage exemption.

If an individual qualifies for a health care coverage exemption, they must complete the applicable parts of the 2015 Form 8965 (Health Coverage Exemptions) and include it with their 2015 federal return.

To see a full listing of the exemptions and whether the applicable exemption must be applied for at the federal marketplace or can be requested when the 2015 federal return is filed, see the Health Care Exemptions section of the How the Affordable Care Act Affects Individuals on the Crosslink Tax Resource Center.

If an individual needs help in determining whether they qualify for an exemption, a Find Exemptions tool is available on the healthcare.gov website.

Individual Penalty (Shared Responsibility Payment) for 2015
If it is determined that an individual does owe a penalty for 2015, it is calculated as the greater of: 

• 2% of the individual’s income that exceeds their 2015 filing threshold (personal exemptions plus standard deduction for their filing status);

Or

• A flat dollar amount that is assessed for the taxpayer, spouse, and dependents as follows:
  • $325 for taxpayer, spouse, and dependents over age 18
  • $162.50 for each dependent under age 18
  The maximum family flat dollar amount for 2015 is $975.

The penalty amount is limited for 2015 to the annual national average premium for a bronze level health plan available through the Marketplace which is $2,484 per individual ($207 per month per individual) with a cap of $12,470 for a family with five or more members ($1,035 per month).

See pages 13 – 17 of the draft 2015 Form 8965 Instructions for more information on how the penalty is calculated.

Additional Affordable Care Act Related Information Returns that Individuals May Receive for Health Care Coverage for 2015

Beginning in early 2016, individuals will begin to receive new Affordable Care Act (ACA) related information returns regarding their 2015 health insurance coverage. It is important to note that the following two information forms are for informational purposes only and are not needed to complete an individual’s 2015 federal tax return. The purpose of these forms is to inform individuals that they had health insurance for 2015, who was covered by their policy, and how many months they had coverage.

Form 1095-B (Health Coverage)
All health insurance issuers (insurance companies), self-insured employers, government agencies, and other entities that provided health insurance coverage to individuals during 2015 will be required to send each individual they covered a Form 1095-B (Health Coverage).

All individuals that had health insurance coverage during 2015 will receive a Form 1095-B in early 2016. If the individual had coverage from more than one health insurance provider during the year they will receive a Form 1095-B for each one.

The Form 1095-B will give the individual health insurance policy holder the following information:

• The name, address, and SSN of each person covered by the policy
• The number of months each person was covered during the year
• The name of the health insurance issuer
• Name of Employer (if it is employer sponsored coverage)

The Form 1095-B is proof that the taxpayer and his/her dependents were covered by health insurance for all or part of 2015.

None of the information that is on the Form 1095-B is entered on the 2015 federal tax return. Therefore, it is not necessary for an individual to have received a Form 1095-B in order to complete and file their 2015 federal tax return.

Form 1095-C (Employer Provided Health Insurance Offer and Coverage)
All individuals that worked for a company that was considered an applicable large employer (employed 50 or more full-time equivalent employees) and received or were offered health insurance coverage during 2015 will receive a Form 1095-C (Employer Provided Health Insurance Offer and Coverage) in early 2016 from their employer.

The Form 1095-C will inform the employee of the following:

• Name, address, and SSN of the employee
• Name and SSN of the employee’s dependents that were covered and for which months they were covered during 2015
• Name, address, and EIN of Employer
• For those who elected not to receive coverage, information on the coverage offered

The Form 1095-C is proof that the taxpayer and his/her dependents were covered by health insurance for all or part of 2015 by their employer.

None of the information that is on the Form 1095-C is entered on the 2015 federal tax return. Therefore, it is not necessary for an individual to have received a Form 1095-C in order to complete and file their 2015 federal tax return.

IRS, States, and Tax Industry Announce New Steps to Help Public Protect Personal Data in order to Prevent Tax Identity Theft

The IRS has just announced their new “Taxes. Security. Together.” campaign which is designed to help raise public awareness about how their use of the internet and their personal devices can affect the safety of their financial and tax data. It will urge individuals to take active steps to protect themselves and make them aware of just how sophisticated identity thieves have become.

Included in the “Taxes. Security. Together.” campaign is information about how the IRS, state tax administrators, and the tax software industry are implementing an expanded series of protections for the upcoming 2016 filing season to address tax related identity theft. These added protections will include asking individuals for additional information that will be included with their tax return. The additional information will help government agencies ensure that the return they are accepting is truly the taxpayer’s and not one that is being filed by someone who has stolen their identity.

The “Taxes. Security. Together.” campaign is a direct result of the IRS Security Summit, a collaborative effort started in March 2015 between the IRS, states, and the tax industry to help fight tax identity theft (of which CrossLink Professional Tax Software has been a part of).  This joint campaign will include YouTube videos, weekly Tax Tips, and local events across the country. This information will also be included on state websites and by the professional tax software community during this upcoming filing season.

For more information on this campaign, see the following on the IRS website:

• Taxes. Security. Together webpage – Explains how taxpayers, tax preparers, and businesses can help fight tax identity theft.

• IRS News Article 2015-129 (IRS, States and Tax Industry Announce New Steps to Help Public to Protect Personal Tax Data)

• IRS Fact Sheet 2015-23 (IRS, States and Industry Partners Provide Update on Collaborative Fight Against Tax-Related Identity Theft)

• IRS News Article 2015-117 (IRS, States, Industry Continue Progress to Protect Taxpayers from Identity Theft)

Time to Renew Your PTIN for 2016, PTIN Fee Reduced

The IRS has begun accepting renewals and new applications for PTINs for calendar year 2016.

All paid preparers of federal tax returns must renew their PTINs for 2016. The IRS prefers that tax preparers renew by December 31, 2015. However, if this is not possible, tax preparers must renew before they begin preparing 2015 federal income tax returns.

The IRS has just announced that the annual fee to renew or obtain a new PTIN will now be $50 for the 2016 PTINs. See the IRS Reminds Tax Return Preparers of Limited Practice Changes and Announces Revised PTIN Fee news article on the IRS website for more information about the PTIN fee change.

Although the IRS may not require federal tax return preparers who are not EAs, CPAs, or attorneys to pass a test and complete yearly continuing education, the IRS still has the authority to require all paid federal tax return preparers to register with the IRS and obtain a PTIN.

To renew a PTIN, go to the IRS Tax Professional PTIN System page on the IRS website, log onto your IRS PTIN account, fill out the information requested, and pay the $50 renewal fee.

Failure to renew or obtain a PTIN could result in being penalized under IRS Code Section 6695.

Be sure to renew your PTIN before the 2016 filing season begins.

Taxpayers who received an advance premium tax credit (subsidy) in 2014 and have not filed a 2014 federal return

As of the end of July 2015, approximately 1 million of the 4.5 million taxpayers who received an advance premium tax credit (subsidy) to help pay for their 2014 health insurance premiums had not filed a 2014 federal return and completed the required reconciliation on Form 8962 (Premium Tax Credit).

The IRS has sent these taxpayers Letters 5591, 5591-A, or 5596. These letters explain the importance for the taxpayer to file their 2014 federal return with a completed Form 8962 (Premium Tax Credit) within 30 days of the date of the letter in order to avoid a possible delay in receiving their advance premium tax credit to help pay for their 2016 health insurance premiums.

The automatic renewal process for the Federal and State Marketplaces will take place in early October 2015 for 2016 health insurance coverage. Those who go through the automatic renewal process will not be officially enrolled until December 15, 2015. Individuals who have not filed their 2014 federal return by early September 2015 may experience delays in receiving their advance premium tax credit (subsidy) that helps pay for their 2016 health insurance premiums.

Under the Affordable Care Act, any taxpayer who receives a subsidy to help pay for their health insurance premiums must complete the reconciliation of advance premium tax credit with the actual premium tax credit or they will be denied a subsidy in the following year. This means they must file a federal return and complete Form 8962 (Premium Tax Credit) for each year they receive a subsidy even if they otherwise do not have a filing requirement.

The Marketplace must receive from the IRS a positive indicator that the individual had completed the reconciliation in order to receive a subsidy for the subsequent year. Since it takes time for the IRS to process a return and then make it available to the Marketplace, there is a high likelihood that the IRS will have sent a negative indicator for those tax returns that are filed in mid to late September and October. Therefore, taxpayers may have to go through additional steps to receive their advance premium tax credit for 2016.

For more information see the following:

• IRS Health Care Tax Tip 2015-40 (File Your Tax Return Now to Receive Timely Advance Payments in 2016)
• Reconcile Advance Premium Tax Credits section of the Affordable Care Act Tax Provisions for Individuals and Families page on the IRS website
• Affordable Care Act: What’s Trending page on the IRS website

Status of Federal Extender Tax Provisions that Expired at End of 2014

The federal extender tax provisions expired at the end of 2014. Although it appears that Congress will extend these provisions before the end of the year, it is still helpful to reiterate what these provisions are.

Below is a list of the most used of the expired tax provisions and how the Sec. 179 expense provisions would significantly change for Tax Year 2015 if they are extended.

Provisions that need to be extended by Congress to be applicable for Tax Year 2015:

• $250 Educator Expense Deduction – Form 1040, line 23
• Tuition and Fees Deduction – Form 8917
• Itemized Deduction for Sales Tax
• 50% Bonus Depreciation
• Exclusion of gain from income for foreclosed home mortgage debt (Form 982)
• 15 year straight line depreciation allowed for qualified leasehold restaurant and retail improvements
• Tax-free distributions from IRAs for charitable purposes
• Nonbusiness energy property tax credit  on Form 5695
• Contributions of capital gain real property made for conservation purposes (50% limitation applies instead of 30% limitation)
• Qualified Real Property category for Sec. 179 expensing purposes

Also, the following limits are in effect for Tax Year 2015 unless Congress extends the expired Section 179 expense provisions:

• Maximum Section 179 Deduction amount: $25,000
• Maximum Cost before Section 179: $200,000

Congress has begun discussions on extending these tax provisions. However, an actual bill will probably not be voted on until sometime this fall. With everything else that Congress needs to take care of this fall, it appears that a bill extending these tax provisions will not be passed until December 2015. Check back here later for more information on what occurs with these provisions and what impact the lateness in the passage of any legislation may have on the start of the 2016 filing season.

For a complete listing of all the expired tax provisions that affect both individuals and businesses, see Things to Know for Current Tax Year section (under Provisions Extended for 2014) of the Tax Resource Center on the CrossLink website.

Tax Update: Voluntary Continuing Education Program for Unenrolled Tax Return Preparers

The IRS started a new voluntary program that allows tax return preparers to show the IRS and their customers that they are keeping up with tax law changes and increasing their tax knowledge by completing tax related continuing education courses each year. It is called the Annual Filing Season Program. Preparers who choose to participate will receive a Record of Completion from the IRS, provided that they complete the required hours of continuing education, have an active PTIN, and consent to adhere to specific obligations under Circular 230.

Any preparer who receives a Record of Completion for the 2016 Filing Season will have limited representation rights before the IRS. This means that they will be able to represent their clients, whose returns they have signed, before revenue agents, customer service representatives, and similar IRS employees. All other unenrolled return preparers will have no representation rights and will only be allowed to complete returns and sign them.

Another advantage for tax return preparers who participate in the Annual Filing Season Program is inclusion in the database of tax return preparers on the IRS website.

This is how the program works:

In order to receive an Annual Filing Season Program – Record of Completion for calendar year 2016, most preparers must meet the following requirements by December 31, 2015:

• Complete 18 hours of continuing education which must include:
• A six hour Annual Federal Tax Refresher course that covers filing season issues and federal tax law updates. The course must also include a knowledge-based comprehensive test (that the tax preparer must pass) that is given at the end of the course by the continuing education provider.
• Seven hours of other federal tax law topics
• Two hours of ethics
• Renew their PTIN
• Consent to adhere to specific practice obligations outlined in Circular 230, Section 10.51

All continuing education courses must be taken from an IRS approved CE provider and completed by the end of each calendar year.

Unenrolled preparers who passed the Registered Tax Return Preparer test, are an established participant in a state based return preparer program, are a VITA volunteer, or have met a limited number of other criteria will be considered exempt. This means their continuing education hours requirement will be 15 hours. For more details on which unenrolled preparers are exempt and the details of their requirements, see the Reduced Requirements for Exempt Individuals on the IRS website.

For more information on the IRS Annual Filing Season Program see the following:

• Main Annual Filing Season Program page on the IRS website
• General Requirements
• Chart of Annual Filing Season Program CE Requirements

Tax Update: New Tax Benefit for the Disabled - ABLE Accounts

The Achieving a Better Life Experience (ABLE) Act of 2014 was signed into law in December 2014. This new provision authorizes any state to offer its residents the option of setting up an ABLE account. The ABLE account allows people with disabilities, and their families, the ability to save and pay for disability related expenses.

These accounts are modeled after Section 529 college savings plans. Once a state enacts legislation, a qualified ABLE account may be set up by a taxpayer. The account will then be maintained by the state and managed by a financial institution. Contributions to an ABLE account are not tax deductible for federal income tax purposes. However, the earnings on the account are not taxable either. An eligible individual is limited to one ABLE account.

Key points for ABLE accounts are:

• An individual is eligible for an ABLE account if that person is diagnosed with blindness or a disability prior to their 26th birthday.
• The yearly contribution limit is the amount of the annual federal gift tax exclusion, which is currently $14,000.
• States must either pass legislation that allows ABLE accounts to be set up or contract with another state that offers ABLE accounts.
• Distributions are tax-free as long as they are used to pay qualified disability expenses.
• Beneficiaries of ABLE accounts can save up to $100,000 in the plan without losing Medicaid and Supplemental Security Income benefits.

At the present time, each state’s legislature is considering legislation to allow the setup of ABLE accounts. As of the end of June, here is the status of ABLE legislation in each state:

• Enacted (23): Alabama, Arkansas, Colorado, Connecticut, Delaware, Florida, Kansas, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nebraska, Nevada, North Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia
• Still considering (13): California, Hawaii, Illinois, Iowa, Michigan, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Wisconsin
• Will not consider until 2016 (14): Alaska, Arizona, Georgia, Idaho, Indiana, Kentucky, Maine, Mississippi, New Hampshire, New Mexico, Oklahoma, South Carolina, South Dakota, Wyoming

Later in the year, we will be giving additional updates on the status of the legislation in each state and additional details on ABLE accounts once the regulations are finalized. The IRS has just recently released proposed regulations that will govern ABLE accounts. We will update you when these become final later this year.

For more details on ABLE accounts see the following on the IRS website:

• Tax Benefit for Disability
• Proposed Regulations Offer Guidelines for New State-Sponsored ABLE Accounts for People with Disabilities announcement and details on ABLE accounts
• Proposed IRS Regulations for ABLE Accounts (June 19, 2015)

Supreme Court Upholds the Affordable Care Act Subsidies for Federal Marketplace

The Supreme Court ruled yesterday (June 25) in a 6-3 decision that health insurance subsidies are legal in the 34 states that are using the federal marketplace. Therefore, approximately 6 million people who reside in those states will continue to receive the subsidy for the remainder of 2015 and all future years.

This also means that there will be no changes to the way the Affordable Care Act is administered by the IRS and Health and Human Resources for 2015 and beyond.

For more detail see:

• Supreme Court’s opinion on the King vs. Burwell case
• News release US Department of Health and Human Services Secretary Sylvia M Burwell on the Supreme Court’s ruling
• White House Fact Sheet on the Supreme Court Upholding Critical Part of Affordable Care Act

IRS, Industry, and State Security Summit and Collaborative Effort to Fight Identity Theft

The IRS joined with representatives of the tax software industry and state tax administrators on June 11, 2015 to announce the new collaborative effort to help protect the nation’s taxpayers from identity theft and tax fraud.

CrossLink has been part of this effort for the past three months and looks forward to being part of the continuing partnership with other tax industry companies, the IRS, and states in the months ahead to help combat the growing impact of identity theft to the federal and state tax systems.

This effort began in March 2015 with the establishment of three teams that focused on developing ways to improve tax return authentication and validation, information sharing between the industry, IRS, and states, and fraud detection and assessment of risks in order to develop strategies in preventing emerging threats.

The members of the IRS Security Summit agreed to several new initiatives in the following areas:

• Taxpayer authentication - Industry and government groups identified numerous new data elements that can be included with the return to help authenticate the taxpayer and detect identity theft fraud.
• Fraud detection - An agreement was made to expand the sharing of fraud leads between industry and government.
• Information assessment - The groups will look at establishing a formalized Refund Fraud Information and Assessment Center to more efficiently share information between the public and private sector to help identify fraud schemes and reduce the risk to taxpayers.
• Cyber-security framework - Industry agreed to align with the IRS and states under the National Institute of Standards and Technology cyber-security framework to promote the protection of the information technology infrastructure.
• Taxpayer awareness and communication - A joint effort between the IRS, states, and industry to increase the effort to inform taxpayers and raise awareness of the importance of protecting taxpayers’ sensitive personal tax and financial data to help prevent identity theft and refund fraud.

To learn more about this new IRS, industry, and state collaborative effort to fight identity theft and protect taxpayers, see the following on the IRS website:

• IRS news release on IRS, Industry, and State Security Summit
• 2015 IRS Security Summit Report
• IRS Security Summit page

Thank you for another great season!

"Thank you!

Because of terrific customers like you, CrossLink has experienced another record year of growth! We could not do it without you and I would like to personally thank you for your business.

If you recall from previous seasons, I strongly believe that well rested employees are essential to meeting your needs, developing industry leading solutions, and enabling your continued success. In support of this, I wanted to let you know in advance that our employees will be out of the office for the period of May 25th through May 31st.

We are preparing for another exciting year and we want to hit the ground running on June 1st with the passion, creativity, and energy you have come to expect from your CrossLink Team.

Should you have any questions regarding this break, please do not hesitate to contact your CrossLink Team for additional information.

Thank you very much for your business!"

Charles Petz, CPA
Chief Financial Officer
Petz Enterprises, LLC

April 15 Filing Deadline Reminders

This is a reminder that the federal filing deadline for individual returns is this Wednesday, April 15, 2015.

April 15 is also the deadline for the following:

• Filing an automatic six month extension (Form 4868) – Remember the six month extension is for filing the return only. Any tax due must be paid by April 15, 2015 to avoid any penalty and interest.
• First individual estimated tax payment for 2015
• Making a contribution to an IRA for tax year 2014
• Filing federal partnership tax returns (Form 1065)
• Filing estate or trust income tax returns (Form 1041)

Also, for returns rejected on April 15, 2015, the return will be considered timely filed if it is retransmitted and accepted by April 20, 2015.

The original filing deadline is later for the following taxpayers:

• U.S. citizens and resident aliens who live and work abroad, as well as members of the military on duty outside the U.S. have until June 15, 2015 to file. Any tax due must still be paid by April 15, 2015.
• Members of the military and others serving in Afghanistan or other combat zone localities can wait until at least 180 days after they leave the combat zone to file returns and pay any taxes due. For more details see Extensions of Deadlines on page 24 of Publication 3 (Armed Forces’ Tax Guide).

Reminder of Recently Introduced Helpful Online Tools for Individuals

The IRS has released several online tools on their website in the past year. These tools allow an individual to make a direct debit payment online for estimated payments/amount owed with an extension/balance due on a current or prior year federal return, get the status of their amended return, or get information on a prior year federal tax return.

Direct Pay

If an individual would like to make a direct debit payment to the IRS for a current or prior year balance due or look up what payments they have made, they can use the Direct Pay online tool on the IRS website.

In order to make a payment, all the individual needs to do is:

• Provide their tax information
• Verify their identity
• Read more

Where’s My Amended Return?

If an individual has filed an amended return they can now find out where it is in the IRS processing stream by using the “Where’s My Amended Return?” look-up tool. The status will be available on this application three weeks after it was mailed to the IRS.

Three weeks after it has been mailed to the IRS, the following information is available about the amended return once the Social Security Number, date of birth, and ZIP code has been entered:

• Confirmation that the IRS received the amended return
• An update on the amended return’s current status
• Read more

Get Transcript (Prior Year Return Information)

If the taxpayer needs a copy of a federal return for a prior year, the IRS has made available an online tool that allows them to retrieve a copy of their return information for the three prior tax years (and current year after it has been filed). The taxpayer has the ability to download the return and/or print a copy of it immediately online. This new application eliminates the previous constraint to wait five to ten days while the IRS processed the request and mailed a copy of the taxpayer’s prior year return information.

Click here to read the entire CrossLink Tax Update that includes more information on helpful online tools for individuals.

IRS Security Summit Working Group Kick-Off Meeting

The tax software industry, IRS, and state tax administrators will be holding their kick-off meeting to discuss ways to address identity theft, refund fraud, and data security on April 2, 2015 in Washington, D.C. The goal of these working groups is to collaborate on finding solutions that will help mitigate identity theft in the tax system.

Petz Enterprises is glad to be part of this discussion and happy that IRS Commissioner Koskinen is making identity theft a priority.

Our goal has been, and will continue to be, bringing whatever resources are necessary to help combat tax related identity theft. By working with the IRS and state tax agencies, we will continue to be at the forefront of this issue.

Our customers have benefited from the security features that we have included in our product to help protect them from this very serious problem, and we will continue to look at adding more in the future.

We are looking forward to working with the IRS, State governments, and other members of the tax industry to help address the issue of identity theft and security in these working groups over the next few months.

IRS Security Summit

Petz Enterprises, LLC (PEI), your CrossLink Team, participated in the March 19, 2015 IRS Security Summit meeting with the IRS, state tax administrators, and tax industry companies. The meeting was held to discuss ways to address the critical issue of identity theft, refund fraud, and data security.

At the meeting the IRS indicated their willingness to work with the industry and states to discuss solutions to help combat the growing issue of identity theft fraud in the following areas over the next few months:

• Fraud prevention and detection, which includes authentication of the taxpayers
• Information sharing related to fraud between IRS and state department of revenues, as well as with the tax industry
• Data security safeguards

The goal of this collaboration is to discuss solutions that can be implemented for the 2016 filing season and beyond. As always, CrossLink remains committed to data security for our professional tax preparer customers and the tax industry as a whole.

Tax Update: New IRS Publication 974 (Premium Tax Credit)

The final Publication 974 (Premium Tax Credit) is now available on the IRS website on the Current Forms and Publications page. This new publication provides additional instructions and information for taxpayers who purchased health insurance from a Marketplace and had a situation that was not covered in the Form 8962 (Premium Tax Credit) or the Form 1040 instructions.

The publication covers the following:

• How to calculate the self-employed health insurance deduction for self-employed individuals who purchased health insurance through a Marketplace
• How to request penalty relief for taxpayers who must pay excess advance premium tax credit 
• Information on individuals who are not lawfully present in U.S. and are enrolled in a qualified health plan
• Taxpayers who are filing a tax return but who are not claiming any personal exemptions
• How to determine the applicable second lowest cost silver plan premium amount that is needed to calculate the premium tax credit
• Taxpayers who were married during the tax year and want to use the alternative calculation that may lower their taxes

2014 Health Care Coverage Exemptions, How to Apply for One, and New Exemption Lookup Tool

Individuals who did not have health insurance coverage for all or part of 2014 will not owe an additional tax (penalty) for not having health insurance if they qualify for an exemption. In fact, most individuals who did not have health coverage will qualify for an exemption.

What follows is information on the new exemption lookup tool that was recently added to healthcare.gov, as well as a listing of the exemptions available to individuals for Tax Year 2014 and how to apply for them.

New Exemptions Lookup Tool

To help individuals (who did not have health insurance during 2014) determine what exemption they may qualify for, a new health care coverage exemption tool has been added to healthcare.gov. Once an individual answers a few questions the tool will let them know:

• What exemptions may apply to them
• Details to help them decide whether or not to apply
• Read more

Exemptions Available for 2014 and How to Apply For One

Exemptions that may be applied for when filing a 2014 federal return:

• 2014 health coverage is considered unaffordable
• Individual’s income is below the filing threshold (Form 8965, Part II)
• Individual was a U.S. Citizen living abroad
• Individual not lawfully present in the U.S.
• Read more

Exemptions that must be applied for through the Marketplace:

• Individual was a member of a recognized religious sect whose members object to insurance. See the Members of Recognized Religious Sects or Divisions Exemption Application form on healthcare.gov for more information.
• One of the following Marketplace defined hardship exemptions:
• Individual is homeless
• Individual was evicted in the past 6 months or was facing eviction of foreclosure
• Individual received a shut-off notice from utility company
• Individual recently experienced domestic violence
• Read more

Click here to read the entire CrossLink Tax Update that includes more information on 2014 health care coverage exemptions and the new healthcare.gov Exemption Lookup Tool.

Special Federal Marketplace Enrollment Period and Corrected Form 1095-A

The Centers for Medicare Services (CMS) made two announcements on February 20, 2015 concerning a special enrollment period for individuals who did not have health coverage in 2014 and information concerning the number of individuals (who used the Federal Marketplace) that will be receiving a corrected Form 1095-A in March due to incorrect information contained on the original 1095-A that they received around the end of January.

Special Federal Marketplace Enrollment Period for the Tax Season
For individuals who reside in a state that uses the Federal Marketplace, a special enrollment period will be available to those individuals and their families who did not have health coverage in 2014 and are subject to the shared responsibility payment (penalty) when they file their 2014 federal return.

Qualifying individuals will have the opportunity to purchase health insurance from March 15, 2015 through April 30, 2015 if they reside in a state that uses the Federal Marketplace and:

• Are not currently enrolled in 2015 coverage through the Federal Marketplace;
• Attest that they filed their 2014 federal tax return and paid a fee (penalty) for not having health coverage in 2014; and
• Attest that they first became aware of, or understood the implications of the Shared Responsibility Payment (penalty) after the end of open enrollment (February 15, 2015) in connection with preparing their 2014 federal return.

Individuals who are seeking to take advantage of this special enrollment period can find out if they are eligible by visiting the main get coverage page on healthcare.gov.

For more information on this announcement see the CMS Announces Special Enrollment Period for Tax Season press release on the CMS website.

Corrected Form 1095-A for Certain Individuals
CMS has announced that approximately 20 percent of individuals (800,000) who used the Federal Marketplace to obtain their 2014 health insurance and received an advance premium tax credit will receive a corrected Form 1095-A (Health Insurance Marketplace Statement) in early March. These individuals should also receive a phone call explaining that they will be receiving a corrected form 1095-A and that form should be used to complete Form 8962 (Premium Tax Credit) for their 2014 federal tax return.

The original Form 1095-A included the incorrect Second Lowest Cost Silver Plan (SLCSP) Premium amounts. This amount is needed in order to calculate the 2014 Premium Tax Credit on Form 8962, and if it is incorrect, the calculated premium tax credit will also be incorrect.

To find out if an individual is affected, they should do the following:

1. Log in to their account on HealthCare.gov. Once they are logged in, they will see a notice message that will let them know whether they are affected.
2. If their Form 1095-A is affected the individual has not filed their 2014 federal return, they should wait until they receive the corrected Form 1095-A in March. The corrected Form 1095-A can also be accessed via the individual’s account on Healthcare.gov in early March.
3. If their Form 1095-A is affected and the individual needs to file their return now they can do one of the following:
• Look up the Second Lowest Cost Silver Plan Premium amount using the Find 2014 Silver Plan Premium Tool on healthcare.gov.

Or

• Call the Marketplace Call Center at 1-800-318-2596.

For those who have already filed their 2014 federal return (which CMS estimates at 50,000), the Treasury Department and IRS will be providing information soon.

For more information on this announcement see the What Consumers Need to Know about Corrected 1095-As blog posting on the CMS website.

Individuals Who Opted to Not Take Advance Premium Tax Credit and Form 1095-A (Health Insurance Marketplace Statement)

If an individual opted to not receive an advance premium tax credit (subsidy) when they obtained their health insurance through the Federal Marketplace, the Form 1095-A (Health Insurance Marketplace Statement) that they receive will have zeros in Part III, column B (Monthly Premium Amount of Second Lowest Cost Silver Plan – SLCSP) for the months that they had health insurance in 2014.

In order for these individuals to be able to calculate a premium tax credit on Form 8962 (Premium Tax Credit), they must enter an amount greater than zero for the Second Lowest Cost Silver Plan in Part II, column B. To determine what this amount should be, the individual can use the Find 2014 Silver Plan Premium look up tool on the healthcare.gov website.

Here is the information an individual will need to determine the Second Lowest Cost Silver Plan amount using the tool:

• Zip Code and County where they lived each month in 2014
• Age of each family member covered
• Months each family member was covered and was not eligible for other coverage outside the marketplace.

If the individual obtained their insurance through one of the 15 State Marketplaces and did not receive a subsidy, then Form 1095-A, Part III, column B may contain zeros for the months that they had health insurance during 2014. If this is the case, they will need to go to the applicable State Marketplace website to determine what the Second Lowest Cost Silver Plan amount should be as follows:

• California – Form 1095-A Information
• Colorado – Find the Second Lowest Cost Silver Plan Premium
• Connecticut – Silver Plan Premium Calculator
• District of Columbia – SLCSP Calculator
• Hawaii – Contact Information
• Kentucky – Benchmark Plan Tool
• Maryland – SLCSP Worksheet
• Massachusetts – General website
• Minnesota – Silver Plan Look up Tool
• Nevada – SLCSP Table
• New York – SLCSP table
• Oregon – SLCSP Lookup Tool
• Rhode Island – Tax FAQs page
• Vermont – Tax Questions page with SLCSP information
• Washington – SLCSP Lookup Tool

What to Do if a Taxpayer Loses or Did Not Receive Form 1095-A

Any individual who obtained their health insurance through the federal or a state Marketplace should receive a Form 1095-A (Health Insurance Marketplace Statement).

If a taxpayer who was supposed to receive a Form 1095-A for Tax Year 2014 either lost it or did not receive it, they can do one of the following:

• Log-in to their account on the website of the Federal or the State Marketplace they obtained their health insurance from and see if their Form 1095-A is available as a PDF.
• If their Form 1095-A is available, then they can print it out
• If their Form 1095-A is not available, they will need to call the applicable Marketplace and have the Marketplace mail them a replacement copy
• Call the Federal or State Marketplace and have a replacement copy mailed to them

See the Health Insurance Marketplace page on irs.gov for a listing of contact information for the Federal and State Marketplaces.

IRS Update: Affordable Care Act and the 2014 Federal Return

As the beginning of the 2014 filing season is upon us, now is the time to emphasize the importance of the Form 1095-A for taxpayers that received an advance premium tax credit (subsidy) in 2014, as well as remind everyone of how the Affordable Care Act will affect all 2014 federal returns.

Importance of Form 1095-A (Health Insurance Marketplace Statement) for Individuals Who Received an Advance Premium Tax Credit (Subsidy)

For individuals who received an advance premium tax credit (subsidy) that reduced their monthly health insurance premiums, it is necessary to have the Form 1095-A in order to complete the Form 8962 (Premium Tax Credit) because it contains the information that is needed to both calculate the premium tax credit and complete the reconciliation of the subsidy with the calculated credit.

Since the filing season begins on January 20, 2015, and a large number of the individuals who received a subsidy will not receive their copy of the Form 1095-A until the first week of February, tax preparers should not complete and file a return of an individual who obtained their health insurance through a Marketplace until they have received a copy of the Form 1095-A – allowing them to complete and include Form 8962 with the return. Read More

All Individual Federal Returns Will Be Affected by the Affordable Care Act

Everyone who files a 2014 federal tax return will be affected in one of the following ways by the Affordable Care Act:

• Most individuals will only have to check the Full Year Coverage box on Form 1040 since they were covered by their employer, government program (such as Medicaid or Medicare), or private insurance purchased outside of Marketplace for all of 2014.
• Taxpayers who obtained their health insurance at the federal or a state marketplace will:
• Receive Form 1095-A (Health Insurance Marketplace Statement) from the federal or state Marketplace around January 31, 2015;
• Complete Form 8962 (Premium Tax Credit) to claim the Premium Tax Credit and, if they received an advance premium tax credit (subsidy), complete the required reconciliation.
• Read More

Click here to read the entire CrossLink Tax Update on how the Affordable Care Act affects 2014 Tax Returns.

IRS Update: Reminders for Upcoming 2015 Filing Season

As the January 20 start date for the 2015 filing season draws near, it is important to review the IRS Identity Protection PIN program and the new IRS direct deposit limit.

Identity Protection PIN

For the upcoming filing season the IRS will issue 1.7 million Identity Protection PINs (IP PIN) to individuals who have had an identity theft indicator applied to their IRS tax account.

These are the key items to know about the Identity Protection PIN:

• If a taxpayer received an IP PIN last year they should have received a new 6-digit IP PIN from the IRS in December via IRS notice CP01A.
• If a taxpayer received an IP PIN, the taxpayer and spouse must enter their IP PIN on their 2014 federal return or the IRS will reject the return.
• Read More

New IRS Direct Deposit Limits

Beginning this filing season, the IRS will be limiting the number of refunds that may be electronically deposited into a single financial account or pre-paid debit card to three (3).

Any subsequent deposits will be automatically converted to a paper refund check and mailed to the taxpayer at the address shown on the federal return... Read More

Click here to read the entire CrossLink Tax Update on reminders for the 2015 Filing Season.