For people who have not yet filed their tax returns, the United States Treasury Department and the Internal Revenue Service (IRS) announced March 21 that they are moving the 2019 income tax filing due date from April 15 to July 15 this year, a three-month extension.
After the IRS’s announcement, the state of California postponed its tax deadlines until July 15 due to the COVID-19 pandemic. That update superseded the California Franchise Tax Board’s (FTB) previous announcement that extended the period for filing and payment of taxes until June 15, 2020.
With the approval of the federal government’s $2 trillion stimulus package, designed to ease the financial impact of the global Coronavirus pandemic, taxpayers can take full advantage of several breaks federal and state agencies are offering.
Two tax credits specifically, one federal and the other in California, are aimed at giving families and businesses a lifeline.
For starters, eligibility for the California Earned Income Tax Credit (CalEITC) has been expanded. People who earned less than $30,000 in 2019 — including through self-employment — may qualify, and those who also have a child under age six may be eligible to claim the Young Child Tax Credit (YCTC).
California’s YCTC was introduced in 2019. Upon qualifications for CalEITC and having a child under the age of six as of the end of the tax year, taxpayers could qualify for up to $1,000 through this particular tax credit.
Between CalEITC and YCTC, FTB anticipates returning $1 billion to taxpayers this year.
Taxpayers earning less than $55,952 may also qualify for the federal EITC. Through a combination of CalEITC, YCTC, and the federal EITC, a family can receive up to $8,053.
You can submit retroactive claims for this credit for up to the last four years. The Volunteer Income Tax Assistance (VITA) program provides free tax help for those uncomfortable with submitting tax filings and earn less than $54,000 a year.
Responding to the economic challenges of the Coronavirus crisis, the federal government passed legislation that will provide up to a $1,200 payment for single individuals, $2,400 for married couples and various tax credits to businesses.
The legislation authorizes the IRS to issue to individuals with incomes of up to $75,000 a one-time $1,200 payment, phasing out at a rate of 5% for every $100 in income above $75,000.
The most important key to this tax credit for families and businesses is that emphasis is put on filing the 2018 tax returns, Horton said. They must be filed and the parties filing do not have to worry about previous hardships that prevented them from doing it.
Individuals with disabilities, the elderly and limited English speaking abilities need help filling out tax returns qualify. All income-eligible Californians who need help filing a Personal Income Tax (PIT) return can find it through the VITA program at sites statewide until July 15. All VITA volunteers are IRS-certified and can be trusted not to charge money for their services.
This tax season, the FTB expects to process 20 million PIT returns, and the IRS expects to process more than 150 million PIT returns.