Lee B

This issue comes up every year. If you do a search on the board, you will find a number of posts about this issue going back over the years.

Yeah, the rabbit holes are multiplying

That applies to Schedule A itemizing. Does it apply to being reimbursed by the charity?

I believe that there are about 10 states that issued these payments. The problem is that many of the state laws implementing these payments, including California, did not legally refer to these payments as State Tax Refunds or State Tax Rebates, which is why the IRS needs to provide more guidance. Note: Washington, which does not have a State Income Tax is calling their payments a Rebate of State and Local Sales Taxes Paid . Film at 11

The standard Accountable Plan Rules apply to non profit employees and directors. I don't think you are going to find a direct cite clearly written in plain english.

Also, Direct Deposit for efiled 2021 1040 X is being worked on. Direct Deposit for efiled 2020 1040 X will not become available.

1. What about taxpayers that didn't pay any state taxes due to credits etc? 2. The IRS general rule is all income is taxable unless specifically exempted from taxation.

Let's split the difference: "Nonprofit organization employees and board members are eligible for business mileage reimbursement whereas volunteers will receive the charity rate. However, volunteers may receive reimbursement for commuting mileage which employees are not eligible for."

"IRS issues statement about the taxability of state payments The IRS is aware of questions involving special tax refunds or payments made by states in 2022; we are working with state tax officials as quickly as possible to provide additional information and clarity for taxpayers. There are a variety of state programs that distributed these payments in 2022 and the rules surrounding them are complex. We expect to provide additional clarity for as many states and taxpayers as possible next week. For taxpayers uncertain about the taxability of their state payments, the IRS recommends they wait until additional guidance is available or consult with a reputable tax professional. For taxpayers and tax preparers with questions, the best course of action is to wait for additional clarification on state payments rather than calling the IRS. We also do not recommend amending a previously filed 2022 return."

https://www.law.cornell.edu/uscode/text/26/172

I was definitely headed down the wrong rabbit hole

Any Taxable Income that ended up in Unclaimed Funds

On the other hand the $10,000 could be taxable proceeds which don't qualify for a step up in basis. We don't really know do we?

After all these years they must still be using the "Raven" shareware database. By now one would think the program would have been rewritten with something more robust and stable?

If you have no basis then it's all gain.

You may be trying to close the barn door after the horse is already gone.

What kind of issues?

"Next week the IRS will begin accepting electronically filed 2022 amended returns with direct deposit information. The IRS will not allow direct deposit if an amended return is paper filed." Every little bit helps

How many clients will consider the definition of "installed" and actually apply it to their situation?

"Age of taxpayers without qualifying children: The special rules that changed the age requirements for taxpayers without qualifying children have expired and don't apply to 2022 returns. For 2022, taxpayers without qualifying children must be at least age 25 and under 65 at the end of the year to be eligible to claim the EITC. On top of that, the provisions lowering the minimum age for qualified former foster youth and qualified homeless youth have expired and don't apply to 2022. Maximum credit amount declined for taxpayers without qualifying children: The maximum amount of the credit for taxpayers without qualifying children was significantly reduced to $560 for 2022 (down from a temporary expansion to $1,502 for 2021). The maximum credit amount for those with three or more qualifying children is $6,935 for 2022, a slight uptick from 2021. Maximum AGI amounts significantly reduced for taxpayers without qualifying children: For taxpayers without any qualifying children who file as single, head of household, or as a qualifying surviving spouse, their AGI must be less than $16,480 (down from a temporary expansion to $21,430 for 2021). For taxpayers without any qualifying children and with married filing jointly filing status, their AGI amount must now be less than $22,610 (down from a temporary expansion to $27,380 for 2021). Maximum amount of investment income: The max amount of investment income allowable to still qualify for the credit slightly increases for 2022 to $10,300. No election to choose prior-year earned income: Unlike the past few years, taxpayers can't elect to use a prior year's earned income amount to compute the amount of the credit. Married filers not filing jointly: Thanks to a permanent tax relief provision in ARPA, taxpayers who are married but separated from their spouses may be eligible for the EITC without having to file a joint tax return with their spouse. ARPA expanded the rules by allowing certain married taxpayers filing separately to claim EITC only if they didn't live with their spouse during the last six months of the year, or if they have a separation agreement or decree; and lived with their qualifying child or children for more than one-half of the year. Qualifying children without Social Security numbers: Another permanent ARPA change enables taxpayers whose qualifying children don't meet the Social Security number requirement to claim the EITC as if they were a taxpayer without qualifying children."

“If you don't know where you are going, you'll end up someplace else.” ― Yogi Berra

Even if the child works for 1 or 2 other people it's highly unlikely the child is an independent contractor. In several of the Employment Tax Audits that I have been involved, the auditor did extensive on line search in the state and other databases looking for confirmation that the individual in question was actually in business .

Yes, if you have signed Form 8655

In that case it sounds like you will have to amend the return. As a result your client's return and amendment will probably end up in "Suspense" behind over 8 million other returns.

Key Question: Did your client check the box, sign and mail the the portion of the CP2000 agreeing to the $4,300?