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Ley Mills: Well, I see that it is top of the hour. So, for those who just joined, welcome to today's webinar, which is Highlights of Tax Changes from a Tax Forms Perspective. We're glad you are joining us today. My name is Ley Mills and I am a Stakeholder Liaison with the Internal Revenue Service and I'll be your moderator for today's webinar. And this is slated for 100 minutes. Now, we have a lot of participants in today's webinar. So we expect to have a lot of questions. Considering this, we anticipate we'll go a little longer than the 100 minutes, to get to as many questions as possible. Before we begin, if there is anyone in the audience that is with the media, please send an e-mail to the address on the slide. Be sure to include your contact information and the news publication that you're with. Our Media Relations and Stakeholder Liaison staff will help you; will answer any questions that you might have. As a reminder, this webinar will be recorded, and it will be posted to the IRS Video Portal in a few weeks. This portal is located at But please note, continuing education credit or certificates of completion, they are not offered if you view any version of our webinars after the live broadcast. Now, we hope that you're not going to experience any technology issue. But if you do, this slide shows helpful tips and reminders. Now, we posted a technical help document that you can download from the Materials section on the left side of your screen. It provides the minimum system requirements for viewing this webinar. And this is along with some best practices and quick solutions. If you have completed and passed your system check and you are still having problems, try one of the following. The first option is to close the screen where you're viewing the webinar and re-launch it. The second option is to click on settings on your browser viewing screen and select HLS. You should have received today's PowerPoint in the reminder e-mail. But if you didn't, no worries, you can download it by clicking on the Materials drop-down arrow on the left side of your screen and that's shown on the slide. Closed captioning, it is available for today's presentation. If you're having trouble hearing the audio through your computer speakers, please click the closed-captioning dropdown arrow located on the left side of your screen. This feature, it will be available throughout the webinar. Now, during the presentation, we'll take a few breaks to share knowledgeable based questions with you. At those times, a polling style feature is going to pop up on your screen with a question and multiple-choice answers. Select the response you believe is correct by clicking on the radio button next to your selection and then clicking Submit. Some people may not get the polling question. Now this - it may be, because you have your pop-up blocker on. So please take a moment to disable your pop-up blockers now. And you can answer the questions. If you have a topic-specific question today, please submit it by clicking the Ask Question drop-down arrow to reveal the textbox, type your question on the textbox and then click Send. Very important, please, do not enter any sensitive or taxpayer-specific information. Before we start the webinar, we want to hear from you. We'd like to take a minute - for you to take a minute to answer the following question. Which tax form would you like to see changed, in other words, content or design, and that would help you comply more readily with the tax law? Please enter your response in the Ask Question field. And thank you for sharing your responses. Again, welcome, and thank you for joining us for today's webinar. Before we move along with our session, let me make sure that you're in the right place. Today two of my co-workers from Communications & Liaison will share information relating to Highlights of Tax Changes from a Tax Forms Perspective. As stated, this webinar, it's going to be scheduled - well, is scheduled for approximately 100 minutes. And as I mentioned earlier, we'll probably go a little longer. So, let me introduce today's speakers.

Karen Brehmer and Richard Furlong, they're Senior Stakeholder Liaisons in the Communications & Liaison Division. Both work with tax professionals and small business owners in their respective areas. They're providing outreach and education. They're identifying ways the agency can more be responsive to customer needs. So, let me turn this over to Karen and let her get things going.

Karen, all yours. Karen Brehmer: Great. Thank you, Ley, and thanks, everyone, for joining us today. Let's first talk about what the objectives are for today. We're going to share some knowledge of major income tax changes for tax year 2020. And we'll tell you about major tax form changes from 2019 to 2020. And we'll cover the new tax forms for tax year 2020. Now, before we jump right into the tax changes for this year, I wanted to take a moment to highlight our draft forms webpage. And that's I want everyone to think about a time that you've looked at a tax form and you thought to yourself, "Hmm, that does not seem quite right." Or you thought, "You know what, I think I could explain that a little bit better." If you've ever had thoughts like that, then is the webpage for you. Every year we post draft forms, instructions and some publications to for a review by our industry and tax professional partners. While the drafts are not intended for immediate use, they are posted to solicit your comments and your feedback. And I would imagine that some of you listening today have provided comments on some of these draft forms over the years. We really appreciate your comments and feedback, because they help us improve our tax products. As a reminder, you can always comment and provide feedback on the content of our draft forms at

And then, when the final release of a form is posted, you can find that at

We also have over 500 products pages on And some examples of that are,, If you enter in your web browser or search engine, you'll be directed to a page that's called About Form 1040, U.S. Individual Income Tax Return. The pages that start with the word About are the products pages we're talking about.

Products pages provide links to the forms and the instructions, if there are separate instructions. And they also show any changes that impacted the product after its final release.

Another way to see changes that happen to forms, after the initial final release is to enter in your browser or search engine. And all revisions of all tax products are at The page for all forms has, like we said, all of the forms, instructions and publications. So we'd like to show you how these pages look on, instead of just telling you about them, we want to show you also. This is the page for draft forms. And on this slide, there's a red box around the word, Draft Tax Forms in the upper left-hand side, one way to find the form you're looking for is to enter the number of the form or the publication in the find box. And there's a red box around the word, find, also. You can choose to search by the product number or the title of the form or the revision date of the form. I must say for myself, I mostly use the product number, that's what I would enter in most often, I would just enter Form 1040, or just 1040 in the find box, and I would search for the product that way. There's another page that we mentioned a minute ago, it's the page for latest forms. You'll notice there's also a red box on this slide around the word posted date. And what makes this page unique, is the fact that it's sorted by the posted date. So, this page shows you the forms and publications, we have published most recently. And with that, Richard, I will turn it over to you. Richard Furlong: Thank you, Karen, and good day, everyone. It's great to be here with you today. So now we're going to look at the page for All Forms. We have 3 red boxes that you can see on the slide. So, let me go over each of them. The first you can see on this page tells you how many files or items are on the page, so on the slide we're looking at 1 through 25 of a total of 2,342 files. The second red box in the middle shows that you can view more or less files per page. So, you can set up your screen to show 25, 50, 100 or even 200 files per page. And then on the right-hand side, that last red box on the slide shows you that you can move forward or backward by 1 page or by several pages skipping forward. So, as we all know these days, when we're on our computers or mobile devices, and on the internet, there's more than one way to accomplish a task. Another way to find the forms is to go to, again, our IRS homepage, that's and then look at the tabs across the top. So, in this slide, you'll see the tab that has the yellow box around it, it says Forms and Instructions. If you click on that tab, this is the page that you are going to see. Now here, if you're looking for something specific, you can enter the form or perhaps the publication in the search box. You can also click on list all current forms and instructions, which you see in the middle of the slide there. And then this will bring you to the page we just saw on the previous slide. Now do you see the green boxes on the slide on the left-hand side, you can also look at prior year forms, you can click on prior year on the left side of the page or you can click on find prior year forms, instructions and publications in the middle of this page, either of these methods takes you to a page with prior year forms, which I'm going to show you on the next slide. Now, this is an interesting page for me, because I - sometimes look at prior year forms and it's amazing what one can find here. So just for fun, I searched under the oldest revision of the 1040 I could find. And as you can see, we have a Form 1040 from, it's hard to believe, 1864 here in the administration of Abraham Lincoln, also one for 1913, the first year of the Internal Revenue Code. So, if you care to check them out, impress your family, friends and clients, you might be surprised. And you know sometimes taxpayers and clients of tax professionals say everything is so complicated these days. Take a look at those forms from the early 1900s and tell me if you think they look simple. Not now, we'll save that for later, because who has free time this today. So Karen and I hope that by showing you how to search for forms and publication, we have in a sense taught you how to fish so that when it's your turn to find a draft form, a current form or a prior year form, you will be able to find what you need.

And with that, Karen, let me turn the discussion back over to you to begin the discussion of some recent tax law changes. Karen Brehmer: Okay. Very good. Thank you, Richard. Let's move on to tax law changes. So, we're going to begin by discussing implementation of the four recent tax laws that have an impact on the 2021 filing season. And one of our first tasks after these laws get passed, we need to start updating the forms, instructions and publications. So, let's talk about the first one, the Further Consolidated Appropriations Act of 2020. Now that was enacted at the very end of 2019, in December 2019. It included 3 divisions with over 70 tax provisions, including extenders, disaster relief and a lot of retirement changes. And not only did the Further Consolidated Appropriations Act of 2020 have 2021 filing season implications, but it also affected prior tax years. And as a result, we updated any 2018 or 2019 tax products affected by that legislation. And then for this law passed in 2020. On March 18, 2020, the Families First Coronavirus Response Act was signed into law and we call that PL117-127. And we shorten that Families First Coronavirus Response Act and we just call it the FFCRA. And this law required certain employers to provide their employees with paid sick leave, or expanded family and medical leave for specified reasons related to COVID-19. And it provided employers with refundable tax credits to cover the cost of providing that leave. On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act. And we call this one the CARES Act. This law included a significant number of tax items applicable to individuals and businesses. And the individual tax relief included recovery rebate, retirement plan release and above the line deduction of up to $300 for charitable contributions. On the business side, the CARES Act provided eligible employers with an employee retention credit, payroll tax deferral, and carry back of net operating losses. And then the fourth law is the Consolidated Appropriations Act of 2021, and that one was passed on December 27, 2020. And we're going to share more information about that law and all of these laws during today's presentation. So, let's go into more detail on each of these laws. The Further Consolidated Appropriations Act of 2020, as I mentioned a minute ago, is also known as Public Law 116-94. And some of the tax provisions related to extensions of more than 30 expired tax provisions. Another part of the law is called the SECURE Act. And that's an acronym for Setting Every Community Up for Retirement Enhancement. The SECURE Act contains retirement changes. And there are changes for tax disaster relief in the Taxpayer Certainty and Disaster Relief Act of 2019. So, like I said, we're going to go into more detail on all of these, and at this time, I will turn it over to Richard to continue. Richard Furlong: Thank you, Karen. So, let's begin with some of the details on the SECURE act. This is quite a bit in this legislation of interest. So, first, I will discuss the 2020 revision to an existing form its Form 8881. However, this form has a new title as you can see on the slide, the Credit for Small Employer Pension Plans Startup Costs and Auto-Enrollment. We've added that costs and auto-enrollment to the 2020 version. So. the title of Form 8881 was modified to reflect a new Internal Revenue Code section is 45T based on a section of the SECURE Act. The law increases the business tax credit for plan startup costs. The tax credit will increase from the current cap of $500 to up to $5,000 in certain circumstances. Additionally, small business owners are now eligible for a further $500 tax credit for 3 years for those plans that add that auto-enrollment feature for new employees. So, I highly recommend that you review the 2020 revised Form 8881 and instructions now posted on Now, with regard to the tax for certain children with investment income, and we know that many of us refer to this as the kiddie tax, following the passage of the Tax Cut and Jobs Act, some families reported back to our lawmakers that TCJA increased the tax on survivors' benefits paid to children whose parents had died while serving in the United States Armed Forces. So, as a result, a provision of the SECURE Act modified the rules relating to the taxation of the unearned income of certain children. So specifically, it repealed Internal Revenue Code Section 1(j)(4), and that was relating to the special rules for certain children with unearned income. And it eliminated the TCJA change, which provided the taxation of the unearned income of the children at rates applicable to trust and estates. So now, going forward, such income is now again to be taxed at the parents' marginal rate. Now, while this provision generally applies to taxable years beginning after December 31, 2019, the SECURE Act legislation provides that the kiddie tax taxpayers have the option to also apply the rate retroactively to tax years beginning in 2018, 2019 or both of those years. So, as a result, instead of updating the Form 8615 for those prior years of 2018 and 2019, we made a modification instructionally for both years. And we added a worksheet for the tentative tax rate of the parent that can be used when figuring the kiddie tax. So essentially, for 2020, the Form 8615 will revert back to the pre-Tax Cut and Jobs Act version. And again, I recommend that you check out the instructions, the 2020 instructions for the 8615 for all of this information. Now, turning to some changes to retirement accounts, retirement savings, pension provisions and distribution changes, they are all part of the SECURE Act and they're vast. So, some of the provisions we want to touch on today are first, it makes some Individual Retirement Arrangement or IRA changes that are generally effective for tax years beginning after December 31, 2019. And these IRA changes would include, first the repeal of the maximum age for allowing contributions to a traditional IRA. This provision now will allow working individuals with earned income to continue making contributions to an Individual Retirement Arrangement past age 70-1/2. The second provision I wanted to touch on is delaying the required minimum distribution age from age 70-1/2 to age 72. And then, the SECURE Act has shortened the distribution period for non-spouse inherited IRAs to a 10-year maximum. So now, non-spouse designated beneficiaries of an IRA, with certain exceptions, will generally be required to take those distributions from that inherited IRA from a non-spouse over a 10-year window instead of distributions over the designated beneficiaries' life. And then, finally, just highlighting some changes to 401(k) plans, these would include requiring these plans to offer participation to their long-term but part-time employees, permitting 401(k) plans to adopt qualified birth or adoption distribution rules, encouraging the auto-enrollment by increasing the cap to 15%, adding the new tax credit for small employers using auto-enrolment plan. That's the Form 8881 I mentioned a bit earlier, and then, finally streamlining the Safe Harbor for non-elective contributions. So, with all of that I think, Ley, we're ready to take a pause and tee up our first polling question. Ley Mills: Rich, that sounds good to me. Audience, our first polling question is which of these four 401(k)

changes are included in the SECURE Act? Is it, A, Requiring plans to offer participation to long-term part-time employees? Is it, B, Permitting plans to adopt qualified birth or adoption distributions? Is it, C, Encouraging auto-enrollment by increasing the cap to 15%? Is it, D, Streamlining the Safe Harbor for non-elective contributions? Or is it, E, All of the above. Let me - just take a few minutes and click on the radio button that best answers the question. And I'll give you a few more seconds to make your selection. Okay, we are going to stop the polling question. And let's share the correct answer on the next slide. And the next slide is - tries again. The correct response is - I knew I'll get this right. The correct response is E, All of the above. Well, I can see that we have 85% responded correctly. So that's not bad at all. Good job, everyone, for the first question. And let me turn this over to Karen. Karen, all yours.

Karen Brehmer: Great, thank you, Ley. I was just trying to unmute my phone and I almost hung up my phone. So, all the problems we run into as webinars presenters, right. Okay. Anyway, let's talk about the - more about the Taxpayer Certainty and Disaster Relief Act of 2019. So, this act is another part of the Further Consolidated Appropriations Act of 2020. And the Taxpayer Certainty and Disaster Tax Relief Act included a lot of individual extenders, business and energy extenders, as well as disaster tax relief. So, let's take a look at some of the highlights. As far as the individual extenders go, some highlights from the Taxpayer Certainty and Disaster Tax Relief Act include the following: exclusion of qualified principal residence indebtedness from gross income through 2020. Mortgage insurance premiums are treated as deductible qualified residence interests. The adjusted gross income floor for medical and dental expense deductions was reduced from 10% to 7.5%. And the above-the-line deduction for qualified tuition and fees was extended for calendar years 2018, 2019 and 2020. And with that, I'll turn it over to Richard. Richard Furlong: Thank you, Karen. So, now, we're going to stick with the Taxpayer Certainty and Disaster Tax Relief Act. Again, this is part of the December 2019 legislation. And this included disaster relief for federally declared disaster areas generally during calendar year 2018 and 2019. Now, the relief includes a temporary suspension of the requirement that personal casualty losses must exceed 10% of adjusted gross income to qualify for the deduction, also a temporary suspension of taxpayers, who must itemize to claim a disaster loss deduction as part of this legislation. There were special disaster related rules for use of retirement funds incorporated into the legislation. A new exception to the 10% early retirement plan withdrawal penalty for qualified disaster relief distributions, not to exceed $100,000 in qualified hurricane distributions cumulatively. This legislation also allows for the re-contribution of retirement plan withdrawals for home purchases that might have been canceled due to eligible disasters. And it also provides flexibility for loans from retirement plans for qualified hurricane relief. Now, in this legislation, there was an employee retention credit that is also allowed for employers in affected areas, as well as a special casualty loss rule for affected individuals. Now, however, this employee retention credit that I'm mentioning now, please don't confuse it with the other new employee retention credit that is available under the CARES Act for those employers impacted by COVID-19. And we'll mention that, talk about that later. This relief in the Disaster Tax Relief law is essentially the same as the relief that is regularly provided in the wake of major disasters such as hurricanes or wildfires. However, this relief applies to all 2018 and 2019 major disasters with the exception of the California wildfire disaster area for those years, because relief was provided already in the Bipartisan Budget Act of 2018. Okay. So that's the end of the changes resulting from the Further Consolidated Appropriations Act of 2020, which we now know included the SECURE Act, and the Taxpayer Certainty and Disaster Tax Relief Act of 2019. So, let's move on into 2020 with the laws that were passed due to Coronavirus, and I'm going to turn it back over to my colleague, Karen.

Karen Brehmer: Great. Thank you, Richard. So, here are some of the changes due to tax laws passed in 2020 for coronavirus tax relief. The Families First Coronavirus Response Act or FFCRA was signed into law on March 18, 2020. The CARES Act was signed into law on March 27, 2020. And both of those laws provided significant tax relief to stimulate the economy. Here are some of the things that were included in those two laws, a deferral of payments of employment taxes for employers and self-employed, Sick and Family Leave credits, an additional $300 charitable contribution above-the-line deduction, and the Recovery Rebate Credit. Now, we've already seen a lot of questions coming in about Recovery Rebate Credit. So, we will be providing additional details on all of these items in the upcoming slides. And we also want to mention that people who were unemployed due to coronavirus received an extra $600 per week in unemployment benefits.

Unemployment benefits are taxable. So, this means that the regular unemployment benefits that people received as well as this extra $600 per week of unemployment benefits, both of those are taxable. So, let's talk a little bit about the deferral of employment tax payments. The CARES Act deferred the deposit and payment of certain payroll taxes. And this deferral is for the period beginning on the date, the CARES Act was signed into law, March 27, 2020, and ending on December 31, 2020. So, the taxes that employers could defer during that time would be the 6.2% employer's share of FICA. And that 6.2% employer's share is also known as the old-age, survivors, and disability insurance. And again, it's just the 6.2% incurred by employers, not the 6.2% that an employer takes out of employees pay. Also, this law applies to self-employed people too. They could defer 50% of their social security tax. Now employers and self-employed people were not required to defer these taxes. So, some of them may have done it, some of them didn't. But if they decided to defer their taxes, then they also need to know when those deferred taxes need to be repaid. So, the answer is that one half of the deferred amount is due by December 31, 2021.

And the remainder is due by December 31, 2022. And the way that this deferred payment is figured out and where it shows up that you're paying it back, that might be on employment tax return, such as Form 941. It might be shown on the new Part III of Schedule SE for self-employed people and we're going to discuss Schedule SE shortly. And the information you enter on Schedule SE is then reported on your 2020 Form 1040, Schedule 3, line 12e. And for people who are household employers, this deferred amount is reported on Form 1040 Schedule H. So, with that, Ley, do you have another polling question for us? Ley Mills: Well, that sounds good to me. So, audience, I hope you all are ready. Here is the second polling question. Which of the following are included in the coronavirus tax changes? Is it, A, Recovery rebate credit? Is it, B, Deferral of payment of employment taxes for employers and self-employed? Is it, C, Additional $300 charitable contribution above the line deduction? Is it, D, Sick and family leave credits? Or is it, E, All of the above? Again, just take a moment and click the radio button that best answers the question. And I'll give you a few more seconds to make your selection. Okay, we are going to stop the polling now. And let's share the correct answer in the next slide. And the correct response is, E, All of the above. And, oh my goodness gracious, this is absolutely awesome. We ended up with 97% correct. So, with that, Rich, I'm turning this over to you. Richard Furlong: Thanks, Ley. It looks like everybody's wide awake. So hopefully I'll keep them wide awake. So, well, now let's turn to some provisions of the Families First Coronavirus Response Act, otherwise known by the acronym FFCRA. And this act requires certain employers to provide their employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. And it also provides employers with refundable tax credits for providing the paid leave. Now the employers can claim these new refundable credits on their employment tax return, while self-employed individuals can claim them on their individual tax return. And to that end, self-employed individuals now can calculate their credit on a brand-new Form 7202, which I will discuss shortly. Now this provision also applies to certain household employers may file Schedule H with a 1040 Schedule H form titled Household Employment Taxes, and that Schedule H was significantly revised for 2020 for reporting the credit for qualified sick and family leave wages. There's also as well, I should say, as the deferral of the payment of the employer's share of social security tax, which Karen mentioned a moment ago in her discussion. So now let's turn to the new Form 7202. And by the way, I was checking out our forms and publications page, and I see the final version of the form and the instructions are not posted on strongly recommend anyone was self-employed individual clients or those who are self-employed to check it out. So again, the Families First Coronavirus Response Act provides to certain self-employed individuals, refundable credits for either or both sick and family leave needed as a result of the coronavirus. So, the new Form 7202 is titled Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals. This form calculates the refundable credits for sick and family leave again as a result specifically of the Coronavirus. And when you look at the form part - you'll see that Part I of the new form that gives the sick leave credit and Part II figures the family leave credit, and the sum of the sick leave credit and if any family leave credit will be included on line 12b of the Schedule 3 that is filed with the Form 1040. One thing to keep in mind is that Form 7202 was filed separately by each taxpayer with net self-employment earnings. So, it is possible on a married filing joint return that we could see two Forms 7202s for each spouse who is self-employed and eligible for the credits. Now, I want to discuss some significant changes to a fourth schedule you're all familiar with, I think, Schedule SE. First, we have removed the short version of the Schedule SE. All filers are beginning in 2020 of Schedule SE will use the method of calculating self-employment tax found in Part I of the revised Schedule SE. Schedule SE will no longer allow those joint return filers to use a single Schedule SE, each spouse with self-employment income subject to the tax must complete their own Schedule SE. Now, again, a few minutes ago, Karen mentioned the deferral of payment of employment taxes for employers in the self-employed. And she also mentioned that this provision not only applies to employers, it also applies to those who are self-employed. So, when you look at the Schedule SE on Page 2, there's a new Part III for this provision. The new Part III of Schedule SE will allow filers to figure the maximum amount of self-employment tax that they may defer. The entire amount of the self-employment tax will still be reported on Schedule 2 of the 1040. It will be on line four of Schedule 2. The amount figured, if any, in the new Part III of the Schedule SE will be used in a worksheet in the 1040 instructions or in your software to figure the total amount of self-employment tax and any household employment taxes from Schedule H of the 1040 that are elected to be deferred, instead of being due with the original return due date this year. And all of this was a result of the CARES Act provision, specifically section 2302 of the CARES Act that provides for an election to delay a payment of employer payroll taxes. And once more, each spouse with taxable net self-employment earnings, each spouse can make the election to defer their share or one-half of their share of that SE tax on their separate Schedule SEs. So please take a look at the new Schedule SE and instructions. And with that, I'm going to toss the mic back to you, Karen. Karen Brehmer: Okay, very good. Now, we're going to talk about the most recent tax law.

This is the Further Consolidated Appropriations Act of 2021. And I dare anybody to say those titles of all of these tax laws 10 times fast. This is Public Law 116-260. And it was enacted on 12/27/2020. And there are 2 parts to this law. There's COVID-Related Tax Relief Act and Taxpayer Certainty and Disaster Relief Act of 2020. So, here's more details on the COVID-Related Tax Relief Act. There is an additional 2020 Recovery Rebate Credit of up to $600 per qualifying taxpayer and child. And like I said, we're going to explain more about the Economic Impact Payment and the Recovery Rebate Credit later. But for now, just remember that the second payment of the Recovery Rebate Credit is $600. Here's a law that we haven't mentioned at all yet. This one is about the employee's share of social security tax. In August 2020, the President directed the Treasury Secretary to use his authority to defer the withholding deposit and payment of employee social security tax on wages. And that means the 6.2% of employee wages. And this was for compensation paid to certain employees during the period September 1 through December 31, 2020. And the original plan was that the deferred money was going to be paid back from January 1 to April 30, 2021. Under the Consolidated Appropriations Act of 2021, there is an extension of time for repayment of these deferred payroll taxes. Like I mentioned a second ago, the old extension was April 30, 2021. And now, it's December 31, 2021. And the third one that's mentioned on this slide affects teachers. As you know, elementary and secondary school teachers are eligible to deduct up to $250 per year against their gross income for certain education-related expenses.

And the consolidated - the CAA expands the definition of educator expenses to include personal protective equipment, disinfectant, and other supplies to prevent the spread of COVID-19. And we have some more details on the COVID-Related Tax Relief Act. There is an allowance of an election regarding tax treatment of certain farming losses for 2018, 2019 and 2020. And then, earlier, Richard talked about the sick and family leave credits for employers and certain self-employed individuals. Under the FFCRA, that provision was set to expire on December 31, 2020. Now, the credit for paid, sick and family leave, which also applies to certain self-employed individuals, is extended through March 31, 2021. So, Ley, what do you think? Another polling question? Ley Mills: Well, I think that is an excellent thing to do right now. So, audience, here is the third polling question. How much is the maximum amount of additional recovery rebate for each qualifying taxpayer and child? Is it, A, $750? Is it, B, $600? Is it, C, $800? Or is it, D, $700?

Again, just take a few minutes. Click on the radio button that best answers the question. Again, I'll give you a few more seconds to make your selection. Okay, we are going to stop the polling right now. And let's share the correct answer in the next slide. And the correct response is B, $600. And oh, my goodness, I tell you, you people doing great. We ended up with 97% correct.

Awesome. So, I'll tell you what, Rich, I'm going to turn this over to you again. Richard Furlong: Thank you, Ley. I'm smiling here, because obviously there's a lot of interest in the Recovery Rebate Credit. And we'll come back to that credit. Probably come back to it again in the Q&A.

So, first, let's continue with the Further Consolidated Appropriations Act of 2021. Remember, that was signed into law on December 27 of 2020. And that contained its own Taxpayer Certainty and Disaster Tax Relief Act. But here is the Taxpayer Certainty and Disaster Tax Relief Act of 2020. So, this is different from the disaster relief I discussed earlier. And this act made permanent some of the items that were temporary provisions. So, first, on your screen, you see beginning in tax year 2021, the medical expense deduction for - that's Code Section 213(a). That is permanently reduced to 7.5% of AGI. The legislation increases the phase-out limits on the Lifetime Learning Credit. And they will now, beginning in 2021, match the phase-out limits for the American opportunity credit. And this again is effective for tax years beginning after December 31 of 2020. However, there is a transition from the deduction for qualified tuition and related expenses to the change to the lifetime learning credit. The bill also makes permanent Internal Revenue Code Section 139B, which is the gross income exclusion of certain benefits that are provided to volunteer firefighters and emergency medical responders. Now, some other provision to the legislation signed recently into law on December 27 include the maximum amount of discharged debt on a principal residence through foreclosure or debt restructuring. And we refer to that as the qualified personal residence indebtedness. This maximum amount that may be excluded from income under Internal Revenue Code Section 108(a)(1)(E), it was lowered from $2 million previously to $750,000. So, this is beginning for 2021 through 2025. For the exclusion for certain employer payments of student loans, excludable education assistance under Internal Revenue Code Section 127(c)(1)(B) now includes payments made by an employer after March 27, 2020. And that was added by the CARES Act for the benefit of an employee or they're paid to that employee or to a lender a principal or interest of any qualified education loan. And the employee - and this education loan would have to be incurred by the employee for the education of that employer's employee. So, the previous temporary exclusion now was extended out to payments made before January 1, 2026, so essentially through 2025. And finally, Internal Revenue Code Section 25D(a) the residential energy efficient property credit was extended permanently with addition for rules for the inclusion of biomass fuel property. And I want to correct myself. That extension of the residential energy efficient property credit, adding the exclusion of biomass fuel property is through 2023. So, turning on to the next slide, and I noticed at the beginning before we even got started, there were a couple of questions on the earned income credit. And there's some significant changes in the Taxpayer Certainty and Disaster Tax Relief Act under the miscellaneous provisions. And we'll discuss changes to EITC and the Child Tax Credit. So, for tax year 2020, that is a tax year for which people will be preparing and filing returns this filing season. Taxpayers may use their 2019 taxable income to determine the eligible amounts to claim for either the earned income tax credit under Code Section 32. And, also, under Code Section 24(d), the Additional Child Tax Credit. They can use their 2019 taxable income if by using the prior year income, earned income, taxable income, I should say, it results in higher credit amounts when compared to their 2020 taxable income. So, taxpayers may elect to use their prior year earned income and you see that acronym on the slide PYEI to figure their EIC or additional child tax credit. So. remember, it's the option to use the prior year earned income, which could increase the 2020 EIC and/or additional child tax credit, if perhaps as a result of coronavirus, your earned income went down in 2020. Now, there was passed legislation that allowed certain individuals who were impacted by specific disasters to use PYEI to figure their earned income credit and additional child tax credit. But the December legislation and that's Public Law 116-260 now allows all taxpayers, the option to use their prior year earned income to figure their 2020 earned income credit and/or additionally their additional child tax credit. Now to elect prior year earned income, earned income again from 2019, it must be more than the current year earned income, their income used, earned, in 2020. And there's some very good instructions in the Publication 596, when we put it out for the earned income credit and in the 1040 instructions. So now I want to move on to some charitable contributions as a result of the Taxpayer Certainty and Disaster Tax Relief Act of 2020. The partial above-the-line charitable contributions deduction, and Karen mentioned that earlier under the CARES Act, this has been extended beginning in 2021.

And it's been increased from the CARES Act non-itemized charitable contribution remember that was $300 maximum above the line deduction for non-itemizers on the 2020 returns, but for 2021 up to $600 for couples filing jointly $300 for non-married filers or married filers who filed married filing separate. Keep in mind, though that this above the line contribution, both under the CARES Act and under the new legislation beginning in 2021. These contributions must be made in cash and to a qualified charitable organization. Also, Section 213 of the law extends for one year through the end of 2021. The increased limit from the CARES Act on deductible charitable contributions made by corporations and also by taxpayers who itemize on Schedule A. So, this provision in the recent legislation modifies the percentage of income limitations for contributions made after December 31, 2020, the beginning in 2021, through the end of this year.

So, it's a one-year extension. So, with that, let me turn it back over to Karen. Karen Brehmer: Great. Thank you, Richard. So, let's talk about the Taxpayer Certainty and Disaster Relief Act of 2020. Here's some disaster tax relief that's unrelated to COVID-19. There's an exception to the 10% early retirement plan withdrawal penalty for qualified disaster relief distributions, and those distributions cannot exceed $100,000. And also, this law removed the requirement that personal casualty losses must exceed 10% of AGI. And now, we'll go on to some changes to Form 1040 for 2020. So, we made a change to the third-party designee checkbox, you have to picture these forms in your mind right now. Can you recall what the 2019 Form 1040 looked like in the very bottom of the main 1040 form in the second page, in the section of the return for paid preparer use only. There was a box you could check if the paid preparer was the third-party designee. Now, we removed that checkbox in the paid preparer use only section of the Form 1040. So. the box isn't gone forever. We just took it out of the paid preparer use only section. And instead, all third-party designations will be made in the third-party designee section of the return. A virtual currency question has been added to Form 1040. It used to be on Form 1040 Schedule 1.

And now it's inserted under the presidential election campaign checkbox. By putting it here that allows us to the question to fit on both Form 1040 and Form 1040-SR. We also added a line for estimated tax payments on Form 1040, the line 26 of Form 1040 says, 2020 estimated tax payments and amount applied from 2019 returns. On 2019, the line for estimated tax payments was found on Form 1040 Schedule 3. But we've heard lots of comments from people who said they could not find the line to enter their estimated tax payments. So, we listened to your comments, and we made it easier to find the estimated tax payment line by putting it back on Form 1040. And since we're on the topic of payments, here's another change. The W-2 withholdings will have its own line. So, line 25 is reformatted. And now it includes separate lines to report withholding from W-2s and Forms 1099. Line 25a is for withholding from Form W-2 and line 25b is for withholding from Form 1099. And as we already mentioned, there's a new law to allow an above the line deduction for charitable contributions. So, line 1040 is reformatted to include a new line for the above the line charitable contributions deduction for non-itemizers. The deduction is up to $300 for tax year 2020. And line 10b now reads charitable contributions, if you take the standard deduction, the instructions, so tells you to look at the instructions for more information. And line 30 is new, it's for the Recovery Rebate Credit. I can't stress this enough, there's a worksheet included in the Form 1040 instructions. And that information from the worksheet will also be included in your tax software. And the purpose of that worksheet, is so that taxpayers can figure their Recovery Rebate Credit after accounting for any economic impact payments they received.

And again, we're going to cover this in more detail later. But even if you have that worksheet included in your tax software, I highly recommend that you look at the actual Form 1040 instructions and look at that Recovery Rebate Credit worksheet, because I think seeing it in that way helps you understand how it's all going to work. And with that, I will turn it over to you again, Richard. Richard Furlong: Thank you, Karen. So now we're going to look at a form that has been around for a little while. As a quick refresher, the Bipartisan Budget Act of 2018 required the Internal Revenue Service to create a new tax form for seniors. So those taxpayers 65 or older had the option to use this new form when filing the 2020 federal income tax return. I think, the first year 1040-SR was available was 2019. The law that required that Form 1040-SR be developed allows for specific types of income and that it be available without regard to the amount of any item of taxable income or the total amount of taxable income for the taxable year.

So please don't think of the 1040-SR as an easy type form for seniors. Retirement is not a requirement, and those taxpayers working past age 65 have the option to file Form 1040-SR. Now, taxpayers or tax professionals who file electronically generally won't notice much of a difference, as the tax software walks the taxpayer through the forms and schedules needed to file. However, those who file on paper or printed out on paper will notice some changes. Now, again, the 1040-SR remains identical to the Form 1040. It has the same lines and the same line numbers. The difference is that to improve readability it is expanded to 4 pages. And this was necessary to add new lines and to maintain the increased font size and vertical entry space that makes the 1040-SR easier to read. So, the 2020 SR will look a little different than the 2019 version. One thing that some who have print this form out like is that the standard deduction chart is on the Form 1040-SR and it's been moved to Page 4 of the form. So, let's move on to what obviously is one of the hot topics today. So, I'm going to take a bit of time to expand on the discussion that Karen started about the Recovery Rebate Credit. So. first, a little teaser question from Richard Furlong to you all. Do you know the last time that there was a Recovery Rebate Credit? I'll tell you it was in 2008. Now, similar to the way things were handled in 2008, taxpayers who did not get some or all of their economic impact payment, they are now entitled, if they didn't receive the first EIP or the second EIP during 2020. And for the second EIP early in 2021 in January, as I think most, if not all of us know attending today, they will be allowed to claim the difference on that line 30 of the 1040 as their Recovery Rebate Credit. So that is the term in the 1040 and in the instructions and in the worksheet that Karen mentioned. Now, to back into the line 30, the CARES Act, as I think we all know allowed for, and it was desired by Congress to have advance payment of the Recovery Rebate Credit. In the aftermath of COVID-19, with the economy in turmoil, they wanted to get these payments out to the maximum. So. as we all know, the advance payments were called Economic Impact Payments or EIP. And there were 2 EIPs.

The first EIP started within almost literally days after the passage of the CARES Act, so they started in early April 2020 and proceeded into the spring, summer and fall. And then, as a result of the December 27th legislation, a second EIP was implemented. And IRS really moved into higher gear. And I have to give our programmers all the credit. We started issuing second EIP on December 29, 2020 and continued through the month of January 2021. Now, individuals who received less of the first EIP and/or the second EIP, they are entitled to claim an additional amount of Recovery Rebate Credit on their 2020 tax return, and as we know, it will go on line 30. And that will be a line 30 of both the Form 1040 and the 1040-SR. So Karen mentioned the worksheet, and I have looked at this worksheet and studied it, and I think it's valuable for all of us to take a look at the worksheet in the 1040 instructions, which were finalized in early January and are now posted on the website, because even if your software is calculating the credit, it helps to understand the flow of that calculation. Now, in order to calculate correctly, the Recovery Rebate Credit, a person, a taxpayer or the tax professional preparing the return, or the VITA volunteer preparing the return needs to know the amount of the first EIP and also the amount of any EIP received in 2020. Now, many of you know that the first EIP amounts were provided in a special notice. It was Notice 1444 that is titled Your Economic Impact Payment. And those Notices 1444 went out generally within about 2 weeks of the issuance of the first EIP last year. The second EIP amount that have come out more recently, those amounts will be provided in Notice 1444-B.

However, to my knowledge as of today February 2, that Notice 1444-B has not been issued. The notices will provide information about the amount of credit, excuse me, the payment, the EIP, how the payment was made, and how to report any payments that were not received on the Form 2020 Tax Return. So, if at all possible, you want to have these notices available when you complete any Recovery Rebate Credit worksheet in your software or manually from the worksheet in the 1040 instructions. Now, let's say you have not received or cannot fly Notice 1444 and do a 1444-B, you can't locate it. We are encouraging all taxpayers to go to And if an IRS - if any taxpayer sets up their own taxpayer account, under, there is a new app there, View Your Tax Account, where you can see under the 2020 account, EIP 1 and/or EIP 2, in other words, the first EIP and/or the second EIP. So, this is a very secure portal that we use for taxpayer account. It requires what we refer to as multifactor authentication. And we use the term secure access to set up the account. And then each time you go in to access it. So, your online IRS account is where you can get the dollar amounts of the first EIP, and then any second EIP, if you did not retain the Notice 1444. Now remember, another important point, at the time the first and the second EIP payments were going out, certainly the first EIP was based out on completely processed 2019 returns. And remember, the CARES Act was passed right smack dab in the middle of the 2020 tax season. So, we hadn't received all of the 2019 returns and process them.

So, in EIP, the first EIP could have been based on the 2018 tax return information. Now the 2020 1040 will not require a repayment of an EIP. if let's say, for example, based on the information reported on the 2020 tax return, the taxpayer no longer qualifies for the EIP amount they received previously, maybe because the taxpayer's income increased above the thresholds or possibly, let's say, the taxpayer had a child who turned 17 in 2020, but got the EIP - first EIP and possibly the second EIP as an advanced payment of the Recovery Rebate Credit. The good news is those individuals do not have to pay back that first EIP and/or second EIP if they don't qualify in the 2020 tax return. So, Ley, that's quite a bit on the Recovery Rebate Credit, which we'll probably revisit in the Q&A. But I think it's time for everybody to pause and for you to tee up another polling question. Ley Mills: I agree. I think it's a great time for a little pausing right now. Good thing to do. So, here is the fourth polling question. What was the last year there was a Recovery Rebate Credit? Was it, A, 2007? Was it, B, 2008? Was it, C, 2009? Or was it, D, 2010? Again, take a few minutes. Click the radio button that best answers the question. Again, I'll give you a few seconds to make your selection. Okay, we are going to stop the polling right now. And let's share the correct answer in the next slide. And the correct response is B, 2008. I'll tell you, Karen, you and Rich, you guys are doing great. We ended up with 92% of this question. Excellent, excellent, excellent, everybody. Let me now see - oh, Karen, looks like it is now your turn. So, I'm turning this over to you. Karen Brehmer: Okay, very good. Thank you, Ley. So now we'll discuss some of the changes on the numbered 1040 Schedule, beginning with Schedule 1. As you may recall, Schedules 1 through 6 were introduced in 2018. We received many comments about the number of schedules and the resulting use of paper when printing the final return. In response to this, in 2019, we reduced the numbered schedules by half. And in 2020, we've continued to improve on the schedules on making some changes along the way. I'm going to insert an aside here from the comments that we saw in the questions you've been sending in. I heard many of you say that you still don't like it that there are still Schedules 1, 2, and 3 attached to Form 1040, you wish it would go back to the way it used to be.

That is a perfect thing to submit to the IRS using And on this one, I just tested that out in Google. And - in Google, I entered, and I got right to that page. The first link or hit on Google sends you to that page. And it worked when I entered forms as a plural or form as a singular. But anyway, I want to tell you more about schedules - Form 1040, Schedules 1, 2 and 3, they can now be filed with Form 1040-NR, in addition to being fileable with Forms 1040 and 1040-SR. And as we mentioned earlier, we removed the virtual currency question from Schedule 1, and we placed it on Page 1 of Form 1040, 1040-SR and Form 1040-NR. So, let's talk about Form 1040 Schedule 3. Line 12b has been added, and it's used to report qualified family and sick leave credit for certain self-employed individuals from Schedule H, and also from the new Form 7202. There's another new line 12e. And it's used for certain taxpayers who filed Schedule H or Schedule SE, and who were eligible to these for part of their social security tax. And you'll want to look at the Form 1040 instructions for more information on how to figure the amount to enter there. And as we said earlier, we removed the estimated tax payment line that used to be on Schedule 3, and we added that right to the face of Form 1040, 1040-SR and Form 1040-NR. And with that, I will turn it back over to Richard. Richard Furlong: Thank you, Karen. So now we want to turn to Form 1040-NR, and as part of our Form 1040 series redesign efforts, the 1040-NR has been redesigned to look very much like the 1040 with almost all of the same line numbers. And we will use the same Form 1040 Schedules 1 through 3 with the 1040-NR. However, beginning of 2020, we've added 3 new separate schedules that go with the Form 1040-NR. The first is a Schedule A for itemized deductions specific to the Form 1040-NR. There is a brand new Schedule NEC. That is the tax on income not effectively connected with the U.S.

trade or business. So, NEC stands for not effectively connected with the U.S. trade or business Schedule NEC, and then a Schedule OI, which is titled Other Information. And among other things, the Schedule OI collects information that is needed for the determination of the eligibility for certain tax benefits on the Form 1040-NR. So for example, in item L of the new Schedule OI, taxpayers report income that may be exempt from income tax under a specific U.S. income tax treaty with a foreign country. Now, this - we previously had a shortened Form 1040-NR, but that has been eliminated. So, there's no more 1040-NR-EZ, and that was retired beginning in 2020. Now, I want to turn to a very interesting and I think important schedule for taxpayers around the country, who have limited English proficiency. This is the new form schedule, I should say, Schedule LEP. And Schedule LEP is entitled requests for change in language preference. Now under the Executive Order 13166 that executive order mandates that all federal agencies provide Limited English Proficient or LEP persons with meaningful access to the agency's products and services. We here at the Internal Revenue Service, we're committed to providing language assistance as part of our mission to provide quality service to all taxpayers irrespective of their language of choice. This initiative has enabled the creation of the new Schedule LEP. And it was mandated by our IRS Commissioner, Chuck Rettig, multilingual strategy for the agency. And this Schedule LEP is designed to be filed with the Form 1040 series returns. Now the Schedule LEP is effective beginning and tax year 2020. And its purpose is for taxpayers to state to the IRS, their preference for receiving any written communications from the Internal Revenue Service in any of the top 20 limited English proficiency languages. There is one question on the schedule, which asks the taxpayers language preference and they can check a box for their preferred language for which they might want to receive notices if we sent them out. Now only one language choice can be made per form Schedule LEP. And married taxpayers who are filing jointly have different language preferences, each spouse may choose to receive notices in an alternative language other than English. So, in that scenario, each spouse would file their own Schedule LEP with that married filing joint tax return. And then once that Schedule LEP is processed, IRS would subsequently send communications such for example as a notice in the preferred language only if the communication that we're sending out has been translated at that time. And a copy of the communication in English will also be provided to the recipient. So, with that, Ley, I think we have time for one final polling question. Ley Mills: Yes, we do. Audience, it's been a lot of information that you people been - that we've been sharing with you, but hopefully you're just ready for our final polling question. And the final polling question is which of the following schedule is a new for Form 1040-NR, U.S. Nonresident Alien Income Tax Return? Is it, A, Schedule B? Is it, B, Schedule 1? Is it, C, Schedule NEC? Is it, D, Schedule E? So again, take a few minutes, make your decision, click the radio button to the best answer, and we will give you a few more seconds to make your selection. Okay, we will find the correct answer. And let's see what the results are. And the correct response is, C, Schedule NEC. And let me check and see how we did here. And, okay, not too bad. But we ended up with 79%, close but a little bit over the board here. So, Rich, I'll tell you what, could you just do a little bit of clarification? You know, what I'm saying. Richard Furlong: I do, Ley. Ley Mills: We will get this yet. Richard Furlong: Yeah. This is a bit of a tricky question. Because the Schedule NEC, which again is entitled tax on income not effectively connected with U.S. trade or business, is the only correct answer to Schedule 1, Schedule E and Schedule B, they have still been around. So, they're not new to any of the 1040 series. So, it's only that Schedule NEC for reporting tax on income not effectively connected with the U.S. trade or business such as let's say some dividends, interest, anything not real property income. So, take a look at that new Schedule NEC, if you do 1040-NRs, and I know a wide audience today, we have more than a few folks who probably do nonresident tax returns, Ley. Ley Mills: Yeah, very good point, Rich. Very good point. And thank you for the clarification. So, let me now turn this over to Karen. Karen in your hand. Karen Brehmer: Okay, thank you. All right, we're going to talk about some recent developments related to e-filing Form 1040-X. About 3 million Forms 1040-X are filed by taxpayers each year, and taxpayers are now able to file their Form 1040-X electronically using available tax software products. Making the 1040-X an electronically filed form has been a goal of the IRS for a number of years. It's also been an ongoing request from tax professionals like yourself, so we are delighted to be offering this service. When an amended return is efiled, it's filed as a refigured Form 1040 with Form 1040-X and an amended return indicator. And one thing you need to know is that in order to efile the amended return, the original return must have been efiled.

Also, another thing to know is that at this time only tax year 2019 Forms 1040 and 1040-SR returns can be amended electronically. In the future, we will add subsequent years. And we also have additional enhancements that are planned for the future. So, taxpayers will still have the option to submit a paper version of the Form 1040-X, and they should continue to follow the instructions for preparing and submitting the paper form. Also, as a reminder, taxpayers can use a tool on called, Where's My Amended Return. And when using that, they can check on the status of their electronically filed form 1040-X or a paper-filed Form 1040-X. So, here's a list of new products. Some of these we've mentioned already. There's the Schedule LEP attached to Form 1040, which Richard discussed for us. There's Form 7202, which is used by self-employed individuals to figure the refundable credits for sick and family leave, when that's needed as a result of the Coronavirus. And one form we really haven't mentioned yet at all is the Form 8915 series. Now, this is for disaster retirement plan distribution and repayment. And at this time, Form 8915-E is still in draft forms. So, if you want to learn more look up Form 8915-E in draft forms. And then, when that form is finalized, it will be available on the forms page of

And earlier, we mentioned Schedules A, NEC and OI for Form 1040-NR. And we also have some new Spanish products. And we're going to talk about those next. And I will turn it over to Richard for that. Richard Furlong: Thanks, Karen. So, it's my pleasure to talk about some of the new Spanish products that we're rolling out this year. We're very proud that for the first time ever the Form 1040 will be available in Spanish, along with the 1040-SR for seniors. Both are in Spanish for the first time, as are the instructions for the 1040 and the 1040-SR. We have also translated Schedules 1, 2 and 3 into Spanish, and they're posted on And as we move forward, other products, again, as part of our multilingual initiative driven by our Commissioner, these will be translated not only into Spanish, but other languages as our resources allow. Now, I'm going to turn to, call it, a resurrected form. The Form 1099-NEC, Nonemployee Compensation, has been restored to action. It was previously used, and some of you may know this, all the way back in 1979 through 1982. And if you want to take a look at it, where do you go? Prior-year tax forms. Now, the Form 1099-NEC removes the reporting of any nonemployee compensation from the 1099 miscellaneous. This is a result of a legislation passed a few years ago and allows us - that requires information returns with nonemployee compensation reported to be filed with the IRS, as you can see on the slide, by January 31. However, this year, the 31st as we know, fell on a weekend. So, this form was due on February 1, which was yesterday. All Forms 1099 miscellaneous, which still exists for other types of income reported on that form, those are due to the Internal Revenue Service by February 28. And then, just to wrap up before we get into our Q&A, we want to point out the resources or additional resources.

Anything coronavirus related I'd ask that you go to We're updating regularly information about Coronavirus tax relief, both as passed by legislation and administrated by the Internal Revenue Service. And if you have any need to get up to speed on any aspects of the Tax Cut and Jobs Act, we still have Karen and I have discussed those pages,, and for easy tools to access forms that you might be looking at. We mentioned the Form Changes at, Now, we also have two names for pages and you see on the fourth bullet there, or let's say, The official name we use is the Product pages for these forms. And I think about them as what I think of the About pages, because each one starts with the word About. And these pages provide links to forms, instructions, and maybe most importantly this year, any updates on the forms, any alerts to revisions on the previously posted forms and any related products. So, you might find that page useful. And then, finally, with coronavirus, as many of you I think know, we have provided many, many, many helpful frequently asked questions and their FAQs for coronavirus, for the Form 941. And I anticipate they will be continue - they will continue to be updated, as we implement the most recent coronavirus legislation. So, with all of that, Ley, I think we are finally ready for our Q&A portion. Ley Mills: And that sounds great. I'm sure everybody's waiting for that. So, again, it's me, Ley Mills. And I will be moderating the Q&A session. But before we start the Q&A session, I want to thank everybody for attending today's presentation, Highlights of Tax Changes from a Tax Forms Perspective. Now, earlier, I mentioned that we want to know what questions that you have for our presenters. So, here is your opportunity. If you haven't input your question, there's still time. Go ahead and click on the drop-down arrow next to the Ask Question field. Type in your questions and click Send. Now, I'm sure there has been quite a lot of questions submitted.

But you never know, some people may have some more. Karen and Rich, they are going to be staying with us to answer your question. One thing before we actually start. We may not have time, as we said at the beginning to answer all the questions that have been submitted. So, we'll probably go beyond the 100 minutes to try to get to as many questions as possible. If you're participating to earn a certificate and a related continuing education credit, you'll qualify for one credit by participating in at least 50 minutes from the, let's say, official start time of the webinar.

And you'll qualify for two credits by participating for at least 100 minutes from the official start time of the webinar. Now, what am I talking about with official start time? Now, what I'm saying is that for the few minutes before we started, we had our chatting before the top of the hour. So unfortunately, that does not count toward the 50 or the 100 minutes. So, let us get started so we can get in as many questions as possible. Now, let me see. Rich, here's one. And I'm not sure if this is a double or a mix up, I'm not sure. But let me give it to you anyway. It says, "So far this year, I see no way on my tax programs that someone is able to use 2018 or 2019 AGI for the purpose of getting larger EIC or child tax credit, as I read in IRS information that's been out." The second round is stimulus funds, "The $600 were not available, delayed by financial institutions, does the taxpayer responds yes or no funds were received in the 2020?" I think I might have mix up, but hopefully you have an understanding what they're asking for.

Richard Furlong: I think I do, and I may bring Karen in on the second part of that. This is a two-part or two interesting questions. So, the first one comes back to the option to use prior year earned income, not AGI, but prior year earned income, that would be 2019 for the calculation of the 2020 earned income tax credit and/or the additional child tax credit. So, in the 1040 instructions, we provide guidance on how to do that. I think there's a reference in your software or will be in your software when finalized to enter PYEI, if you're using the prior year earned income on filed and processed 2019 return for the calculation of the 2020 earned income credit and/or additional child tax credit. Now, one point I'll make, we have been working aggressively to finalize all forms, instructions, publications to reflect the legislation not only the CARES Act, but the December 27th legislation, and that is a big task, but we're up to it, as is the software industry. So, they rely on the final versions of these forms' instructions, when they are finalizing the software. So, for all tax software, I think, you'll want to check with your software vendor to ensure that you have the latest version, the final version, and particularly in this area of using the prior year earned income for either both of these credits. Now, the other issue involves if I understand the question correctly, and here's where I don't want to put Karen under the bus. But you may want to weigh in, on the second EIP that, as we know, it started to be mailed out very early in January and in through the month of January. So, the attendee is posing the question that the attendee went to the website, maybe for the client, and saw that a payment was scheduled to be issued. What was that date, Ley? Earlier in January, I think, January 6, maybe. And to their knowledge, it hasn't been received. I don't want to read - I'm not sure if the questioner knows if it was issued via paper check, direct deposit, or some payments are going out through the debit cards. You could check with IRS like if you're a practitioner by calling the practitioner priority service, to check to see if the payment actually went out. I know some of these payments may have been delayed, because some firms that offer products that might have involved temporary bank accounts to which the IRS programming was attempting to drop in the second EIP, those bank accounts might be - might have been closed. And the IRS was made aware of that issue early in January. And we are working on that issue. So those taxpayers who are eligible for the second EIP, and they might not be getting it because their bank account was a temporary account to get, let's say, their 2020 refund from the 2019 return.

They should sit tight at this point until we put out further information, because I checked this morning, and I know we're working on it. But Karen, I haven't seen anything official on that issue with those closed bank accounts that involve some of those tax firms. Karen Brehmer: Right, I'll chime in here, if that's okay. It's funny. You're right, Rich. We don't know the answer to this question. I was thinking to myself, usually we don't like to even answer a question unless we know we have an answer for it. But so many people have asked this question that we should do our best to try to address it. And the question people are asking is, if their client didn't get that second round of Economic Impact Payments, for whatever reason. For the reason that Rich mentioned or for whatever reason, what is the tax preparer supposed to do or a taxpayer supposed to do on that EIP worksheet. How do you answer the question, yes or no? Did they get EIP 2? As I said, we don't have an answer yet. We are definitely hoping that the IRS will give taxpayers, tax pros, both of us to work with the IRS and answer to that question. So, the question is a good one. We don't really have an answer. Rich's answer is probably a good one. You might have to sit tight in before submitting that, filing season is open till February 12, anyway, but you might have to sit tight on submitting their returns, until you have an answer to that question about EIP 2. In my opinion, even though people are clamoring to get their returns filed and clamoring to get their refund. It might be worth it to delay filing until exactly how that question should be answered, yes or no. Because I think that guessing what you should answer and then if you just guess wrong, and the IRS is trying to fix it on the back end, that's a delay the refund further.

So please sit tight. That was a very long way of saying, I don't know the answer for your question. I will shut up there and turn it back over to Ley. Ley Mills: Well, that's the safe way to do it. And both Rich and Karen, thank you for the information. But, Karen, as long as I have you up here, let me throw one at you right here right now. It's kind of like, well, let me just go over it says, does not work. Karen Brehmer: I can help well with that one.

Ley Mills: Any clarification… Karen Brehmer: Yeah. So, if you go back, you don't have to look at it right now. But just write down if you're taking notes, Slide 19. Slide 19 in your slide deck is where you see these short links that we gave you, like all forms, draft forms. I think you're right does not work. It's not one of the links we give you as a quote, short link. So, another solution to this problem is to go back into slide deck again and look at Slide 23. So, you're going to look at Slide 19 and Slide 23. Slide 23 shows you how to go to and to search for things. So that's what I do when I'm searching for stuff, I go to, I click on the tab that says forms and instructions and publications. And then there's one link there for search for all forms. There's another link on that page that says prior year forms. So that might be an easier way of finding it. And if you wish you could save that link as a favorite. So, it's easier for you to find it next time. Another question that I saw in the questions box was that people want to be able to. They didn't want to have to wait for these prior year forms to be mailed to them. You can print all of these forms right from, assuming you have access to a printer. So, you could print any form draft, current, prior year form, you could print it and then it would be available to you immediately. So that's my answer for that one, Rich, we can turn it back to - I'm sorry, my answer to that one, Ley, let's get the right name. Ley Mills: That's right. We still work for the same organization. No problem. Okay. Okay, Rich, I have one for you here, if someone got no stimulus money at all last year or this year, because their income for 2019 was over the limit. Are they able to use this year's income 2020 to at least get the payment not sent out until January of 2021? Richard Furlong: So that's a great question. So now we're coming back to line 30 and the Recovery Rebate Credit and I suspect that quite a number of Americans might be in that situation in where their income dropped unfortunately significantly in 2020 and based on the prior year processed returns either 2018 or 2019 they were not eligible for EIP, the first EIP or the second EIP. So, now they may be eligible for the Recovery Rebate Credit not only because their income might have gone down, put them other the threshold. But maybe because they are no longer a dependent and they are filing their own return, Ley. Maybe they were claimed as a dependent for the first and the second EIP. For example, on a parent's return but this year they file on their own and they had income or even if they did not have income and they are not claimed as a dependent, they could be looking at a Recovery Rebate Credit pretty nice refundable credit on their 2020 tax return. So.

this is why this is so important to get right for all 2020 filers. And, I will add Ley I know that a question came in about those who traditionally do not, file tax returns because they don't have a filing requirement. It is very important to the Internal Revenue Service, to the Treasury Department and to all of us that those Americans who might need a lifeline through the Recovery Rebate Credit but did not use the Non-Filer portal last year to get the first EIP and then they would not have gotten the second EIP. It is very important in your community to identify those folks if you can and encourage them to electronically file a 1040 even if they have no income because there under the legislation it is important to all us that they get what they think of as their stimulus payment, but we call it the Recovery Rebate Credit. So, in your communities, I encourage you to look for opportunities to share the message for those who might for whatever reason, Ley, not have gotten any EIP last year, not only because their income was too high, but maybe because they did not come into the tax system to file a tax return, because they weren't eligible. Thanks, Ley. Ley Mills: Thank you, Rich. That was really great information.

Appreciate it. Okay, what do we have here? Karen, I have one for you here. And this is actually a quick question. If a client comes in, and is retired, he didn't file last year, and has no income? How can he file in order to get their stimulus check? Karen Brehmer: Okay, yes, he can.

And he should file a return for 2020. That is the short answer. But of course, I have to expand on it, because that's what I do. Most of the time, if someone does not earn enough income to be required to file, then the IRS says, please don't file if you don't earn enough income to be required to file. The exception is this year, for someone who doesn't earn enough income to be required to file they can and should file a return for 2020. And by doing that, they can get the Recovery Rebate Credit, if they didn't get their first Economic Impact Payment or their second one, or if they didn't get everything they were entitled to get. And so, tax professionals, you will be able to file returns for someone in that situation. I also want to make a quick clarifying thing to something I just said on the previous question I answered about prior year forms. I'm so proud of myself for having the slide numbers and giving them to you. But I realized your slides and mine's aren't the same. So, I mentioned Slide 19 that is going to be on Page 4 of your handout. I mentioned Slide 23, that's on Page 6 of your handout. So, go to Page 4 and Page 6 for information about that. And I will turn it back over to you, Ley. Ley Mills: Thank you, Karen. Rich another one for you. Will IRS be setting up a look up chart or link to check on stimulus amounts to properly answer 1040, line 30? Richard Furlong: So, you give me the tough one, Ley, I'll answer. It's all the great questions. But this is a question that's… Ley Mills: You know my friend. Richard Furlong: Right, right, all among friends. This has been a question among the minds of many of our stakeholders in the tax professional community and others as to what happens if that Notice 1444 and/or the 1444-B when issued or misplaced. The dog eats the notice, it's thrown out whatever. And the taxpayer believes they got a stimulus, the first and/or the second EIP, but they don't know the exact amount and they're within the range and meet the other requirements to get a Recovery Rebate Credit. And you want to make sure, remember, they've gotten and received first and/or second EIP that is subtracted from any recovery that they credit. So, you would only get the difference potentially on the new line 30, the 1040. So, leading into the question, the tool that we have is the taxpayer account. Now, we are encouraging all Americans wherever possible to set up their own account. And it can be used for a number of purposes. It can be used to get transcripts for third party lenders, such as student loans or mortgage purposes, can be used to get a copy of the tax return information. It's very valuable to have one's own taxpayer account. And it's very secure and that's the key here. Because in this age of cybercriminals and identity theft, the IRS has to take precautions to ensure that information available on our applications only goes to those individuals wanted to receive it.

So, to that end, the - if you go into - onto and just type in on the search bar, I think, View your account information, you will come to a landing page. I'm looking at it now, Ley, on the second screen that at the top, it says view your Economic Impact Payment amounts. And it says, you can now view your Economic Impact Payment amounts, if any, within your online account.

So, it's very important. If one doesn't have those notices, Ley, to set up an online account if they are doing their own taxes or providing the information to a tax preparer to do that. So that's where I would direct folks to get that information on their online IRS account. Ley Mills: Okay. That sounds great. Thanks, Rich. Karen, one for you here. If taxpayer died during 2020, and did not receive Recovery Rebate Credit, are they entitled to it on their final return? Karen Brehmer: Okay, that's a good question. So Economic Impact Payments for deceased people has been a bit confusing, hasn't tried to figure it all out. We'll give you a short answer. And I'll give you a long answer. The short answer is that the rules for a deceased individual are different for the first Economic Impact Payment than the second Economic Impact Payment. And we have answers in our frequently asked question pages for deceased individuals. There's EIP FAQs for the first payment. And there's EIP FAQs for the second payments. So, if what I say next doesn't make sense. Please go to and look for those first EIP and second EIP FAQs. The slightly longer answer is that if an economic impact payment was made, who died before receiving the payments needs to be returned to the IRS. But the Recovery Rebate Credit may be claimed for individuals who died in 2020 or 2021, when the person files the decedent's 2020 tax returns. So that includes someone who filed joint tax returns with a spouse who died in 2020 or 2021. And you're again going to want to look at the 2020 instructions in the Forms 1040 and 1040-SR for more information. So, I hope that answer is helpful, but I highly recommend looking at the frequently asked questions they're so helpful, can be a little difficult sometimes to find what you're looking for. But the answers are there, and it's the best way to get those answers instead of trying to listen to me speaking you might not hear things right when I'm speaking, right, or I did something wrong when I'm speaking. So please rely on those frequently asked questions. Ley Mills: That's a great tip. Rich, here's another one for you. Looking at the second payment here, IRS page says payment is scheduled to be mailed January 6, the client still has not received it, IRS page doesn't say it was mailed, only that it was scheduled to be mailed almost a month ago, what now? Richard Furlong: Well, that might require, well, first, we recognize that the postal service is under great challenges these days in terms of mail delivery. So, I don't want to speculate that. I'm sure that information is accurate, because that's the term we use scheduled to be mailed. Somewhat similar to language we use, I think on the where is my refund application.

So, if one was getting nervous, they could reach out to the IRS by calling the toll-free line.

Or if a third party had a disclosure authorization, let's say with the Form 8821 for the 2020 tax year, Ley. And that individual is a tax professional. They could try the Practitioner Priority Service. Otherwise, they might want to sit tight on that. Because if when that check goes out, even if it's not cashed, and it's not taking into account in - if necessary, in calculating line 30 on the 1040 for the Recovery Rebate Credit, it could generate a notice. So, you might want to give us a little more time and then still see no check before you file the 2020 return reach out to the IRS, Ley. Ley Mills: Good point. Very good point. Karen, here's another one for you here.

This is interesting. Please make clear on ITIN holders, can get stimulus payments or not? Karen Brehmer: Okay. Actually, my answer for this one is quite similar to my answer for deceased taxpayers. There's a short answer and a long answer. And the short answer is that the rules were somewhat different for the first EIP compared to the second EIP. And both of the answers to those questions can be found on the FAQ pages for the first EIP and the second EIP. Here's the slightly longer answer. If individuals filed a tax return using an ITIN and they did not receive the economic impact payment, they are not eligible for the Recovery Rebate Credit, even if they have a qualifying child, so that if it's an individual filing a tax return, so it's just one name for the taxpayer, not a joint return, okay. Joint return filers, what if they had a tax return where one person has an ITIN and one person has an SSN? Well, there was an exception, where if the person was an active member of the U.S. Armed Forces, then they could qualify for EIP or the Recovery Rebate Credit. I think I'll stop there. And again, say that the - I'm repeating myself from the beginning, that the way it was handled for the first and second EIP is slightly different. The best way to get the answers is to look at the EIP FAQ pages and look for information about how the EIP was handled for ITIN. And that will help you figure out if that taxpayer qualifies for Recovery Rebate Credit, or if they don't qualify for the Recovery Rebate Credit. And I will stop with that. Ley Mills: Thank you, Karen. Rich, one for you. Where on Form 1040 do I claim above-the-line $300 charitable deduction for 2020? Richard Furlong: Great, Ley.

It is on the new line, 10c, excuse me, 10b, as in boy, charitable contributions, if you take the standard deduction. And, Ley, I also saw another question on the above-the-line charitable contribution for non-itemizers. Actually two, first, it must be a cash contribution to a qualified charity. It cannot be a non-cash contribution. So, it's subject to the normal rules for cash contributions to qualified charities. And we mentioned that for 2020, irrespective of the filing status, the maximum above-the-line charitable contribution deduction is $300. That changes for 2021, where for couples filing jointly, it's $600. For others, it's $300. So, I just wanted to bring those two other items in, Ley, on that same issue with the above-the-line deduction for charitable contributions for non-itemizers. Thanks. Ley Mills: Well, great information, great information. Karen, here's another one for you. "Has the IRS sent out Notice 1444-B to the - for the second EIP payment or has that idea been canceled?" Karen Brehmer: The answer is, no, the IRS has not yet sent out Notice 1444-B for the second EIP. But the IRS is still planning on sending the notice 1444-B. Again, there's a frequently asked question on that states what I've just said. And it says further, come back to this page for an update. When we do issue the 1444-B, we'll have information about that on I'm sure to alert people that it has now been issued and should be on the way to people. That's all I have on that one, Ley. Oops, if you're speaking you might be on mute. Ley Mills: Hello, hello, hello.

Sure was. Exactly, that's exactly. As I say, I'm a human being, we make mistakes. Anyway, unfortunately, that is actually the last question we can address right now. So, I do want to thank Karen. I do want to thank Rich for sharing their knowledge, your expertise, and of course, answering the questions. Great answers by the way. Now, before we close the Q&A session, Karen, what key points do you want the attendees to remember from today's webinar? Karen Brehmer: Okay.

Well, we told you today about four tax laws passed in 2019 and 2020. And they affect tax returns for 2019, 2020, and in a few cases, prior years. And please use There are lots of resources there where you can learn more and I get a lot of these answers to the questions as you've asked today. We wish we had time to answer every one of them, but we don't. And so, I will turn it back over to Ley. Ley Mills: Yeah. Thank you very much, Karen. And I agree, I wish we had more time. But unfortunately, it doesn't work that way. So, audience, we are planning additional webinars throughout the year. And we certainly hope that you'll join us for our next webinar, which is Keys to Mastering Due Diligence Requirements and Audits. And that's scheduled for this Thursday at 2 o'clock PM eastern time. To register for all upcoming webinars, please visit Keyword search is, webinar, and select the Webinars for Tax Practitioners or Webinars for Small Businesses. And, of course, when appropriate, we will be offering certificates and CE credit for upcoming webinars. We invite you to visit our video portal at There you can view archived versions of our webinars. Please note continuing education credits and certificates for completion, they're not offered if you view any version of our webinars after the live broadcast. Again, a big thank you for our speakers, Karen and Richard, for a great webinar, for sharing your expertise, and for staying on for answering your questions. I also want to thank you, our attendees, for attending today's webinar, Highlights of Tax Changes from a Tax Form Perspective. If you attended today's webinar for at least 100 minutes after the official start time, you'll receive a certificate of completion that you can use for your credentialing organization for two possible CPE credit. If you stayed on for at least 50 minutes from the official start time of the webinar, you'll qualify for one possible CPE credit.

Now, as I said before, the time that we spent chatting before the webinar starts, that unfortunately, that does not count towards the 50 or 100 minutes. If you're eligible for continuing education from the IRS and registered with your valid PTIN, your credit will be posted in your PTIN account. If you're eligible for continuing education from the California Tax Education Council, your credit will be posted to your CTEC account as well. If you registered through the Florida Institute of CPAs, your participation information, that will be provided directly to them. If you qualify and you have not received your certificate and/or your credit by February 23, please e-mail us at And you can see on the screen right there on the slide. If you're interested in finding out what your local Stakeholder Liaison is, just send us an e-mail using the address shown on this slide. We'll send you the information. We also would appreciate if you would take a few minutes to complete a short evaluation before you exit. If you'd like to give more - well, if you'd like for us to have more sessions like this one, let us know. If you have thoughts on how we may make it better, please let us know that as well. If you have requests for future webinar topics or pertinent information that you'd like to see in our IRS Factsheet or Tax Tips or Frequently Asked Questions on the, please include your suggestions on the comments section on the survey. So please click the Survey button on the screen to begin. If it doesn't come up, please check to make sure you disabled your pop-up blocker. It has been absolutely a pleasure to be here with you. And on behalf of the IRS and our presenters, we'd like to thank you for attending today's webinar. Thank you very much. It's important for the IRS to stay connected with the tax professional community, with industry taxpayers, with individual taxpayers, as well as federal, state and local government organizations. You make our job a lot easier by sharing the information that allows for proper tax reporting. Thanks again for your time and attendance. And we wish you much success in your business and practice. Have a great tax season, everyone, and you can now exit the webinar. Thanks again.