WASHINGTON — IRS Interest Rates 2024 will remain the same for the calendar quarter beginning Jan. 1, 2024.
For individuals, the rate for overpayments and underpayments will be 8% per year, compounded daily. Here is a complete list of the new rates:
8% for overpayments (payments made in excess of the amount owed), 7% for corporations.
5.5% for the portion of a corporate overpayment exceeding $10,000.
8% for underpayments (taxes owed but not fully paid).
10% for large corporate underpayments.
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus three percentage points.
Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus three percentage points and the overpayment rate is the federal short-term rate plus two percentage points. The rate for large corporate underpayments is the federal short-term rate plus five percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half of a percentage point.
The interest rates announced today are computed from the federal short-term rate determined during Oct. 2023. See the revenue ruling for details.
Revenue Ruling 2023-22PDF announcing the rates of interest will appear in Internal Revenue Bulletin 2023-49, dated Dec. 4, 2023.
As the end of the year approaches, one thing on all of our minds is taxes. The IRS released the new updated income tax brackets for 2024. Heres a Quick Guide:
10%: For incomes up to $11,600 ($23,200 for married couples filing jointly)
12%: Incomes over $11,600 ($23,200 for joint filers)
22%: Incomes over $47,150 ($94,300 for joint filers)
24%: Incomes over $100,525 ($201,050 for joint filers)
32%: Incomes over $191,950 ($383,900 for joint filers)
35%: Incomes over $243,725 ($487,450 for joint filers)
Starting in calendar year 2023, the Inflation Reduction Act reinstates the Hazardous Substance Superfund financing rate for crude oil received at U.S. refineries, and petroleum products that entered into the United States for consumption, use, or warehousing. The tax rate is the sum of the Hazardous Substance Superfund rate and the Oil Spill Liability Trust Fund financing rate. For calendar years beginning in 2024, the Hazardous Substance Superfund financing rate is adjusted for inflation. For calendar year 2024 crude oil or petroleum products entered after
Dec. 31, 2016, will have a tax rate of $0.26 cents a barrel.
Highlights of changes in Revenue Procedure 2023-34:
The tax year 2024 adjustments described below generally apply to income tax returns filed in 2025. The tax items for tax year 2024 of greatest interest to most taxpayers include the following dollar amounts:
The standard deduction for married couples filing jointly for tax year 2024 rises to $29,200, an increase of $1,500 from tax year 2023. For single taxpayers and married individuals filing separately, the standard deduction rises to $14,600 for 2024, an increase of $750 from 2023; and for heads of households, the standard deduction will be $21,900 for tax year 2024, an increase of $1,100 from the amount for tax year 2023.
Marginal rates: For tax year 2024, the top tax rate remains 37% for individual single taxpayers with incomes greater than $609,350 ($731,200 for married couples filing jointly).The other rates are:
35% for incomes over $243,725 ($487,450 for married couples filing jointly)
32% for incomes over $191,950 ($383,900 for married couples filing jointly)
24% for incomes over $100,525 ($201,050 for married couples filing jointly)
22% for incomes over $47,150 ($94,300 for married couples filing jointly)
12% for incomes over $11,600 ($23,200 for married couples filing jointly)
The lowest rate is 10% for incomes of single individuals with incomes of $11,600 or less ($23,200 for married couples filing jointly).
The Alternative Minimum Tax exemption amount for tax year 2024 is $85,700 and begins to phase out at $609,350 ($133,300 for married couples filing jointly for whom the exemption begins to phase out at $1,218,700). For comparison, the 2023 exemption amount was $81,300 and began to phase out at $578,150 ($126,500 for married couples filing jointly for whom the exemption began to phase out at $1,156,300).
The tax year 2024 maximum Earned Income Tax Credit amount is $7,830 for qualifying taxpayers who have three or more qualifying children, an increase of from $7,430 for tax year 2023. The revenue procedure contains a table providing maximum EITC amount for other categories, income thresholds and phase-outs.
For tax year 2024, the monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking increases to $315, an increase of $15 from the limit for 2023.
For the taxable years beginning in 2024, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements increases to $3,200. For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount is $640, an increase of $30 from taxable years beginning in 2023.
For tax year 2024, participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is not less than $2,800, an increase of $150 from tax year 2023, but not more than $4,150, an increase of $200 from tax year 2023. For self-only coverage, the maximum out-of-pocket expense amount is $5,550, an increase of $250 from 2023. For tax year 2024, for family coverage, the annual deductible is not less than $5,550, an increase of $200 from tax year 2023; however, the deductible cannot be more than $8,350, an increase of $450 versus the limit for tax year 2023. For family coverage, the out-of-pocket expense limit is $10,200 for tax year 2024, an increase of $550 from tax year 2023.
For tax year 2024, the foreign earned income exclusion is $126,500, increased from $120,000 for tax year 2023.
Estates of decedents who die during 2024 have a basic exclusion amount of $13,610,000, increased from $12,920,000 for estates of decedents who died in 2023.
The annual exclusion for gifts increases to $18,000 for calendar year 2024, increased from $17,000 for calendar year 2023.
The maximum credit allowed for adoptions for tax year 2024 is the amount of qualified adoption expenses up to $16,810, increased from $15,950 for 2023.
Items unaffected by indexing:
By statute, certain items that were indexed for inflation in the past are currently not adjusted.
The personal exemption for tax year 2024 remains at 0, as it was for 2023. This elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act.
For 2024, as in 2023, 2022, 2021, 2020, 2019 and 2018, there is no limitation on itemized deductions, as that limitation was eliminated by the Tax Cuts and Jobs Act.
The modified adjusted gross income amount used by taxpayers to determine the reduction in the Lifetime Learning Credit provided in § 25A(d)(2) is not adjusted for inflation for taxable years beginning after Dec. 31, 2020. The Lifetime Learning Credit is phased out for taxpayers with modified adjusted gross income in excess of $80,000 ($160,000 for joint returns).
The tax brackets were adjusted upwards by 5.4% due to inflation, according to the IRS. You may get a break if your income now falls in a lower bracket, but you won’t feel these effects until you file taxes for 2024.
Michigan may be known for its lakes and other natural wonders, but it also represents some good business opportunities as well. If you’re thinking of starting a limited liability company (LLC) here, you’ll have a number of steps to complete before you’re set up. Learn how to start your Michigan LLC below.
An LLC is a popular business model due to its taxation flexibility and the personal asset protection it offers. Michigan is gaining attention as a good place to do business, thanks to factors like regulatory friendliness, technology and innovation availability, and a low cost of doing business. The state has also been investing in cutting-edge advancements, like electric vehicle production and climate change initiatives which may help make for a promising future.
Different states have different rules for setting up an LLC. Understanding the requirements in your chosen state before you get started will make the process easier. Here’s what you need to know about starting an LLC in Michigan.
Step 1: Pick a Name for Your Michigan LLC
When you complete the Articles of Organization needed to register your Michigan LLC, you’ll be asked to give your LLC’s desired name. The name must be unique and can’t be the same or similar to another business name existing in the state. There are also restrictions regarding certain words that can’t be used; for example, the word “ambulance” can’t be used unless the business is licensed by the Department of Community Health.
If you have a business name in mind that you really want to use and you’d like to reserve it, you can complete a form to save the name. This might be necessary if you aren’t yet ready to file the actual Articles of Organization, for instance. You can save a name for an LLC for up to six months. The cost is $25.
Step 2: Find a Registered Agent
Michigan requires that every LLC registered in the state designates a registered agent with a registered office. This individual or business entity must be named when filing the Articles of Organization. A registered agent is an individual or entity appointed to receive formal notices or documents on your business’ behalf. This could include anything from IRS notifications to lawsuits.
Michigan requires that the resident agent be a legal Michigan resident or Michigan corporation. A foreign corporation with a certificate of authority to do business in the state can also be the registered agent, as can a Michigan LLC or a foreign LLC approved to do business in the state. The registered agent must have a street address in Michigan; you can’t use a P.O. box.
Step 3: File the Michigan Articles of Organization
To officially register your LLC with the state of Michigan, you have to submit the Articles of Organization to the Michigan Department of Licensing and Regulatory Affairs. This paperwork requires you to provide your LLC’s name, describe its business purposes, and designate the name and contact details of your registered agent.
When you submit the document, you’ll have to pay the $50 filing fee (plus expedited fees, if desired). Finally, make sure to include the name and contact information, including a business telephone number, of the “preparer” (your or whoever is completing the paperwork). In case of any issues while processing, it’s important that you can be contacted. There are many LLC services that can help complete all of these paperwork items for you if you do not wish to do it yourself.
Step 4: Draft an Operating Agreement
When completing the Articles of Organization for a Michigan LLC, you’ll see a section of the application where you can add “any desired additional provision.” This gives you the option to attach additional pages to your application, if needed. This is an ideal opportunity to include an operating agreement. Michigan doesn’t require an LLC to have an operating agreement. However, it’s recommended to create one.
An operating agreement includes details like the LLC’s members and what percentage of the LLC they own; the members’ voting rights; the members’ duties opposite the LLC; the frequency of holding meetings; how profits and losses are distributed; and buy-out and buy-sell rules. It can also detail what happens to a member’s shares in case of death. By laying all of this information out in an operating agreement, it’s possible to firm up verbal promises, reduce the risk of misunderstandings, and help protect your liability in case of legal issues.
Step 5: Get Your Employer Identification Number (EIN)
An EIN is a special number that’s similar to a Social Security Number (SSN) except that it’s for a business instead of an individual. The EIN is used by the Internal Revenue Service (IRS) to identify your business. You will include your EIN on tax paperwork. You’ll also need your EIN in case you ever hire employees for your business.
Getting an EIN is easy and fast. The quickest route to getting your EIN is to apply online through the IRS’s dedicated website. Alternatively, you can request an EIN via mail, fax, or telephone. That said, the IRS prefers online applications. Best of all, requesting an EIN doesn’t cost you a thing. It’s free!
WASHINGTON — With the tragic crises and natural disasters happening around the globe, many are responding to the call to give what they can to help. The Internal Revenue Service today warned taxpayers to be wary of criminals soliciting donations and falsely posing as legitimate charities. When fake charities scam unsuspecting donors, the proceeds don’t go to those who need the help and those contributing to these fake charities can’t deduct their donations on their tax return.
“We all want to help innocent victims and their families,” said IRS Commissioner Danny Werfel. “Knowing we’re trying to aid those who are suffering, criminals crawl out of the woodwork to prey on those most vulnerable – people who simply want to help. Especially during these challenging times, don’t feel pressured to immediately give to a charity you’ve never heard of. Check out the charity first and confirm it is authentic.”
Those who wish to make donations should use the Tax-Exempt Organization Search (TEOS) tool on IRS.gov to help find or verify qualified, legitimate charities.
With the TEOS, people can:
Verify the legitimacy of a charity
Check its eligibility to receive tax-deductible charitable contributions
Search for information about an organization’s tax-exempt status and filings
In addition, the IRS urges anyone encountering a fake or suspicious charity to see the FBI’s resources on Charity and Disaster Fraud.
Fake charities
Criminals commonly set up bogus charities to take advantage of the public’s generosity during international crises or natural disasters. Typically, they seek money and personal information, which can be used to further exploit victims through identity theft.
Fake charity promoters may use emails, fake websites, or alter or “spoof” their caller ID to make it look like a real charity is calling to solicit donations. Criminals often target seniors and groups with limited English proficiency.
Here are some tips to protect against fake charity scams:
Verify first. Scammers frequently use names that sound like well-known charities to confuse people. Potential donors should ask the fundraiser for the charity’s exact name, website and mailing address so they can independently confirm the information. Use TEOS to verify if an organization is a legitimate tax-exempt charity.
Don’t give in to pressure. Scammers often pressure people into making an immediate payment. In contrast, legitimate charities are happy to get a donation at any time. Donors should not feel rushed.
Don’t give more than needed. Scammers are on the hunt for both money and personal information. Taxpayers should treat personal information like cash and not hand it out to just anyone.
Be wary about how a donation is requested. Never work with charities that ask for donations by giving numbers from a gift card or by wiring money. That’s a scam. It’s safest to pay by credit card or check — and only after verifying the charity is real.
Taxpayers who give money or goods to a charity can claim a deduction if they itemize deductions, but these donations only count if they go to a qualified tax-exempt organization recognized by the IRS.
WASHINGTON — Tax Relief for Israel Conflict: The Internal Revenue Service today announced tax relief for individuals and businesses affected by the terrorist attacks in the State of Israel. These taxpayers now have until Oct. 7, 2024, to file various federal returns, make tax payments and perform other time-sensitive tax-related actions.
In Notice 2023-71PDF, posted today on IRS.gov, the IRS provided relief to certain taxpayers who, due to the terrorist attacks, may be unable to meet a tax-filing or tax-payment obligation, or may be unable to perform other time-sensitive tax-related actions. The IRS will continue to monitor events and may provide additional relief.
Filing and Payment Relief
Today’s notice postpones various tax filing and payment deadlines that occurred or will occur during the period from Oct. 7, 2023, through Oct. 7, 2024 (postponement period). As a result, affected individuals and businesses will have until Oct. 7, 2024, to file returns and pay any taxes that were originally due during this period. Among other things, this includes:
Individuals who had a valid extension to file their 2022 return due to run out on Oct. 16, 2023. The IRS noted, however, that because tax payments related to these 2022 returns were due on April 18, 2023, those payments are not eligible for this relief. So, these individuals filing on extension have more time to file, but not to pay.
Calendar-year corporations whose 2022 extensions run out on Oct. 16, 2023. Similarly, these corporations have more time to file, but not to pay.
2023 individual and business returns and payments normally due on March 15 and April 15, 2024. So, these individuals and businesses have both more time to file and more time to pay.
Quarterly estimated income tax payments normally due on Jan. 16, April 15, June 17 and Sept. 16, 2024.
Quarterly payroll and excise tax returns normally due on Oct. 31, 2023, and Jan. 31, April 30 and July 31, 2024.
Calendar-year tax-exempt organizations whose extensions run out on Nov. 15, 2023.
Retirement plan contributions and rollovers.
Other tax-related deadlines are postponed as well. See Notice 2023-71 and Rev. Proc. 2018-58 for details.
In addition, the penalty for failure to make payroll and excise tax deposits due on or after Oct. 7, 2023 and before Nov. 6, 2023, will be abated as long as the deposits are made by Nov. 6, 2023.
Who Qualifies for Relief?
Any individual whose principal residence or business entity or sole proprietor whose principal place of business is in Israel, the West Bank or Gaza (the covered area).
Any individual, business or sole proprietor, or estate or trust whose books, records or tax preparer is located in the covered area.
Anyone killed, injured, or taken hostage due to the terrorist attacks.
Any individual affiliated with a recognized government or philanthropic organization and who is assisting in the covered area, such as a relief worker.
The IRS automatically identifies taxpayers whose principal residence or principal place of business is located in the covered area based on previously filed returns and applies relief. Other eligible taxpayers can obtain this relief by calling the IRS disaster hotline at 866-562-5227. Alternatively, international callers may call 267-941-1000.
If an affected taxpayer receives a late filing or late payment penalty notice from the IRS for the postponement period, the taxpayer should call the number on the notice to have the penalty abated.
There’s been lingering confusion about tax reporting for peer-to-peer payment apps such as Venmo and PayPal.
Here is what you need to know:
Personal P2P payments between friends and family still won’t be taxable, according to the IRS.
On the contrary, if you are using a Venmo business account or a Paypal business account, you may be held accountable for the taxes due on these transactions. Continue reading for a guide!
Business Accounts:
Starting this tax year, such companies must use a new, lower threshold when issuing tax forms to individuals who make business transactions through those platforms. The tax-year 2023 threshold is just $600 for even a single transfer, down from more than 200 transactions worth an aggregate above $20,000.
As a result of the change, more taxpayers are likely to receive Form 1099-K, which reports third-party business payments to the IRS.
For any business, it’s important to keep detailed records of the costs related to the production of income. This includes any payments made through P2P platforms, as well as other business expenses — another issue P2P app users face.
For IRS purposes, using a P2P payment platform is similar to paying cash, which the IRS considers to be an unsubstantiated transaction. Business owners need to have additional documentation — such as invoices, receipts, or expense reports — to support the business purpose of payments made through a P2P platform.
For example, a business might pay its janitorial crew through Venmo for legitimate office cleaning expenses. But for IRS purposes, a Venmo time-stamped transaction alone does not supply sufficient information to substantiate a business expense.
If you pay business expenses with Venmo, PayPal, or another P2P platform, make sure you have an invoice from your contractor or get a receipt from the vendor.
This documentation should include the amount paid and a description of the business expense.
This will ensure that you have the right backup information for your deductions if the IRS ever questions the legitimacy of your expense.
Keep in mind, as a business-owner, any payments made to you through a P2P app are still subject to IRS Form 1099 reporting rules and will need to be properly accounted for. From the IRS’s perspective, business income collected through a P2P app is no different from any other transaction that goes through a traditional bank account. Businesses are still required to report any payments received through Venmo and PayPal as taxable income when filing taxes.
WASHINGTON — The Internal Revenue Service today reminded individuals and businesses in most of California and parts of Alabama and Georgia that their 2022 federal income tax returns and tax payments are due on Monday, Oct. 16, 2023. The normal due date of April 18 was postponed for many residents of these states in the wake of natural disasters earlier this year.
The IRS normally provides relief, including postponing various tax filing and payment deadlines, for any area designated by the Federal Emergency Management Agency (FEMA). As long as their address of record is in a disaster-area locality, individual and business taxpayers automatically get the extra time, without having to ask for it.
What areas qualify for the Oct. 16 deadline?
Thirteen counties in Alabama due to severe storms, straight-line winds and tornadoes starting on Jan. 12. The disaster area includes Autauga, Barbour, Chambers, Conecuh, Coosa, Dallas, Elmore, Greene, Hale, Mobile, Morgan, Sumter and Tallapoosa counties.
Fifty-five of California’s 58 counties—all except Lassen, Modoc and Shasta counties. IRS relief is based on three different FEMA disaster declarations covering various jurisdictions and event time frames.
Nine counties in Georgia due to severe storms, straight-line winds and tornadoes beginning on Jan. 12. The disaster area includes Butts, Crisp, Henry, Jasper, Meriwether, Newton, Pike, Spalding and Troup counties.
The current list of eligible localities is always available on the disaster relief page on IRS.gov.
What returns and payments qualify for the Oct. 16 deadline?
Eligible returns and payments include:
2022 individual income tax returns and payments normally due on April 18.
For eligible taxpayers, 2022 contributions to IRAs and health savings accounts.
Quarterly estimated tax payments normally due on April 18, June 15 and Sept. 15.
Calendar-year 2022 partnership and S corporation returns normally due on March 15.
Calendar-year 2022 corporate and fiduciary income tax returns and payments normally due on April 18.
Quarterly payroll and excise tax returns normally due on May 1 and July 31.
Calendar-year 2022 returns filed by tax-exempt organizations normally due on May 15.
Other returns, payments and time-sensitive tax-related actions also qualify for the extra time. See the IRS disaster relief page for details.
For those planning ahead, is relief available for Hurricane Idalia and the Hawaii wildfires?
Yes, but primarily for individuals and businesses who already requested extensions to file their 2022 returns. In general, these taxpayers now have until Feb. 15, 2024, to file. As a reminder, this is more time to file, not to pay. Details vary but currently, relief is available to:
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.
In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting with relief activities who are affiliated with a recognized government or philanthropic organization.
Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed in early 2024), or the return for the prior year (that is, the 2022 return normally filed in 2023). See Publication 547 for details.
The tax relief is part of a coordinated federal response to the damage caused by these disasters and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov.
WASHINGTON – As the new school year begins, the Internal Revenue Service reminds teachers and other educators that they’ll be able to deduct up to $300 of out-of-pocket classroom expenses for 2023 when they file their federal income tax return next year.
This is the same limit that applied in 2022, the first year this provision became subject to inflation adjustment. Before that, the limit was $250. The limit will rise in $50 increments in future years based on inflation adjustments.
This means that the 2023 Educator Expense Deduction is up to $300. If they’re married and file a joint return with another eligible educator, the limit rises to $600. But in this situation, not more than $300 for each spouse.
Who qualifies?
Educators can claim this deduction, even if they take the standard deduction. Eligible educators include anyone who is a kindergarten through grade 12 teacher, instructor, counselor, principal or aide who worked in a school for at least 900 hours during the school year. Both public and private school educators qualify.
What’s deductible?
Educators can deduct the unreimbursed cost of:
Books, supplies and other materials used in the classroom.
Equipment, including computer equipment, software and services.
COVID-19 protective items to stop the spread of the disease in the classroom. This includes face masks, disinfectant for use against COVID-19, hand soap, hand sanitizer, disposable gloves, tape, paint or chalk to guide social distancing, physical barriers, such as clear plexiglass, air purifiers and other items recommended by the Centers for Disease Control and Prevention.
Professional development courses related to the curriculum they teach or the students they teach. But the IRS cautions that, for these expenses, it may be more beneficial to claim another educational tax benefit, especially the lifetime learning credit. For details, see Publication 970, Tax Benefits for Education, particularly Chapter 3.
Qualified expenses don’t include the cost of home schooling or for nonathletic supplies for courses in health or physical education. As with all deductions and credits, the IRS reminds educators to keep good records, including receipts, cancelled checks and other documentation.
For 2022 tax returns being filed now: Don’t forget to claim educator expenses
For those who received a tax filing extension, qualify for a disaster extension, or for any other reason are still working on their 2022 return, the IRS reminds educators that the rules for claiming the deduction are the same as they are for 2023. For those who obtained an extension, the filing deadline is Oct. 16, 2023. But taxpayers can avoid processing delays by filing before that date.
File electronically when ready. Tax-filing software uses a question-and-answer format that makes doing taxes easier. Whether a return is self-prepared or prepared with the assistance of a tax professional or trained community volunteer, the IRS urges everyone to file electronically and choose direct deposit for refunds. For details, visit IRS.gov/efile.
In addition, the IRS urges anyone who owes taxes to choose the speed and convenience of paying electronically, such as with IRS Direct Pay, a free service available only on IRS.gov. For information about this and other payment options, visit IRS.gov/payments.
Live in Michigan and have Tax Questions? Contact ATS
The IRS issued Notice 2023-60 on Friday, providing Tax Guidance For Religious Exemptions, Hardship Waivers, and other administrative exemptions provided by the IRS, from electronic filing requirements included in final regulations (T.D. 9972) issued in February.
The final regulations reflected changes made by the Taxpayer First Act, P.L. 116-25, intended to increase electronic filing. They generally require persons filing partnership returns, corporate income tax returns, unrelated business income tax returns, withholding tax returns, certain information returns, registration statements, disclosure statements, notifications, actuarial reports, and certain excise tax returns to e-file those returns for tax years ending on or after Dec. 31, 2023.
The final regulations provided an administrative exemption from the electronic filing requirement for filers whose religious beliefs conflict with the requirement. In the most recent notice, the IRS said these filers should file Form 8508, Application for a Waiver from Electronic Filing of Information Returns, to notify the IRS in advance that they qualify for the exemption. Thereafter, filers who qualify for a religious exemption should file returns and other documents on paper in accordance with the applicable paper filing requirements, the IRS said.
T.D. 9972 also authorized the IRS commissioner to grant hardship waivers and to grant other administrative exemptions “to promote effective and efficient tax administration.” The procedure for seeking the waiver and any additional administrative exemptions provided by the IRS — is or will be available in applicable IRS revenue procedures, publications, forms, instructions, or other guidance, including postings on irs.gov.
Notice 2023-60 also obsoletes Notice 2010-13, Form 1120, Form 1120-F, Form 1120S, Form 990, and Form 990-PF Electronic Filing Waiver Request Procedures, which provided guidance on obtaining administrative exemptions for those forms because the new notice makes the previous one unnecessary, the Service said.
Tax Guidance For Religious Exemptions, Hardship Waivers, and others – 2023
WASHINGTON — The Internal Revenue Service reminds eligible contractors who build or substantially reconstruct qualified new energy efficient homes that they might qualify for a tax credit up to $5,000 per home with Section 45L Tax Credit.
The actual amount of the credit depends on eligibility requirements such as the type of home, the home’s energy efficiency and the date when someone buys or leases the home. This important credit was expanded as part of the Inflation Reduction Act of 2022.
Eligibility for builders and homes
To qualify, eligible contractors must construct or substantially reconstruct a qualified new energy efficient home. They also must own the home and have a basis in it during the construction, and they must sell or lease the home to a person for use as a residence.
The homes must also be specified categories of single-family (including manufactured) or multifamily homes under Energy Star programs, be located in the United States, and meet applicable energy saving requirements based on home type and acquisition date.
Requirements and credit amounts for 2023 and after
For homes acquired in 2023 through 2032, the credit amount ranges from $500 to $5,000, depending on the standards met, which include:
Energy Star program requirements
Zero energy ready home program requirements
Prevailing wage requirements
Requirements and credit amounts before 2023
For homes acquired before 2023, the credit amount is $1,000 or $2,000, depending on the standards met, which include:
Certifying that the home has an annual level of heating and cooling energy consumption that is at least 50% (or 30% for certain manufactured homes) less than that of a comparable home that meets certain energy standards, with building envelope component improvements accounting for at least 1/5 (or 1/3 for certain manufactured homes) of the reduction
