Arizona State Income Tax Filing Deadline Approved by Legislative Assembly

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Arizona now appears likely to extend its tax filing deadline to match the temporary May 17 federal deadline, but the state hasn’t made much progress over the past week to adopt. or comply with various other rule changes.

A bill to extend the state’s normal April 15 due date to May 17 recently wiped out both houses of the legislature and awaits action from the governor.

But movement on a related issue of compliance with recent changes in federal tax law has proved more elusive.

Arizona and most states that levy income taxes regularly adjust their codes to match annual changes at the federal level, even though that can mean several hundred million dollars in lost revenue, as it would this case. year in Arizona. The purpose of these changes is to give taxpayers clarity and consistency, as Federal Adjusted Gross Income is the starting point for calculating Arizona taxes.

Most states have already complied, but Arizona still has not.

For example, a notable divergence concerns unemployment income. Normally, this compensation is taxable, but Congress waived this requirement for 2020, making the first $ 10,200 in unemployment benefits received by an individual federally tax-exempt (for people with incomes less than 150,000 $). Currently, jobless benefits remain taxable in Arizona.

Over 2 million Arizonans received unemployment benefits in 2020, so complying with this issue, or not complying with it, affects a lot of people here.

Other compliance issues include the tax treatment of withdrawals from pension plans, as Congress relaxed those rules last year, and the tax treatment of paycheck protection program repayable loans.

Tax preparers are divided in their advice, with some recommending that taxpayers file their returns as soon as possible, while others suggest people delay. If the state extends the filing date to May 17 as planned, that will give more leeway.

IRS to do calculations

The IRS provided advice in late March on how taxpayers should treat unemployment compensation. Normally, as stated, jobless benefits are taxable. But the US bailout passed on March 11 decreed that up to $ 10,200 in benefits paid in 2020 per person (up to $ 20,400 for married couples) could escape tax for those with modified adjusted gross income. is less than $ 150,000.

By that time, however, millions of people had already filed their 2020 returns.

The new IRS guidelines mean these people won’t need to file amended returns, much to the relief of taxpayers, tax preparers, and possibly even the IRS. The agency says it will reorganize the tax obligations of these people, adjust their bills and send out any refunds due from spring through summer.

For taxpayers who received unemployment benefits last year and have not yet applied, there are several steps to follow. The IRS provides more information on irs.gov under a exclusion from unemployment section.

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The revised tax balances will apparently qualify some people for a stimulus payment or a larger payment. These people could be “eligible for a new or larger payment based on their recently processed 2020 tax returns,” the IRS said in an April 2 statement, in response to a question about unemployment.

The last stimulus or economic impact payments have been phased out for singles with incomes between $ 75,000 and $ 80,000 and married couples between $ 150,000 and $ 160,000.

Free tax assistance available

With the extension of the May 17 federal tax return filing deadline, some toll-free tax centers are expected to remain open until then, including several sites operated under VITA or the Canadian Income Tax Program. volunteers.

The VITA program, which is affiliated with the IRS, is generally open to people earning less than $ 57,000 per year, as well as people with disabilities or with limited English skills.

Sites that are slated to stay open in May include those run by Phoenix (phoenix.gov/eitc), Masters of the coin (mastersofcoin.org), Mesa United Way (mesaunitedway.org/volunteer-income-tax-assistance/), A New Leaf West Valley (turnanewleaf.org/services/financial-empowerment/vita-program.html) and Rehoboth CDC (rcdcphx.org/vita-tax-preparation).

Slightly lower refunds for Arizonans

As is generally the case, most taxpayers are receiving refunds so far this production season, both nationally and in Arizona.

Nationally, 76% of taxpayers have received or are due to be reimbursed, an average of $ 3,660, according to a LendingTree analysis of IRS data released on March 29. with an average amount of $ 3,395.

Scam targets students, college staff

IRS warns of scam that appears to target university students and staff who have .edu email addresses. Suspicious emails display the IRS logo and use subject lines with phrases such as “tax refund payment” or “recalculate your tax refund payment” in an attempt to entice victims to disclose sensitive personal information.

The IRS does not send unsolicited emails to taxpayers.

Contact the reporter at [email protected].

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