While each tax year is unique, nothing compares to 2020. A year like no other, it includes pandemic-related tax legislation that requires employers, and employees, to understand how their taxes may be affected and what they can do to maximize deductions and minimize liability.
No one likes surprises, especially at tax time. Identify employees who are in unique tax situations and notify them of potential impacts.
For Transferees with Stimulus Check Impacts:
For Out-of-State Remote Workers:
Remember, each employee’s situation will be different and should be analyzed to determine how their income and state taxes should be reported. Once you identify which employees may be liable for additional state taxes, educate them accordingly. If an employee feels they were negatively affected, an audit of the state returns could help determine if this caused an increase in tax liability.
For All Employees:
If your company is reimbursing employees for pandemic-related expenses, please instruct them to submit all receipts to you in a timely manner. They should be aware that they cannot deduct work-from-home expenses. However, if they receive COVID-based reimbursements, they will not be considered taxable income.
Here are some further resources to help guide you through tax season:
- IRS: Coronavirus Tax Relief & Economic Payments
- Tax Foundation: FAQ on Coronavirus Relief Law (CARES Act)
- KPMG: Tax Relief Updated State & Local Tax Guidance (COVID-19)
- For mobility tax updates, subscribe to Orion Mobility’s monthly blog
- Reserve a complimentary copy of Orion Mobility’s 2021 Mobility Tax Guide