Stop the headache

Congress and the Virginia General Assembly have both held up tax filings and delayed taxpayers access to their possible tax refunds.

I am a CPA in Virginia Beach and we tax preparers, and taxpayers are suffering due to slow action in Washington and Richmond.

Congress is considering a bill to exempt the first $10,200 in unemployment benefits from federal taxes for 2020. The IRS started accepting 2020 income tax returns on Feb. 12, but if you are a taxpayer who collected unemployment in 2020, you cannot easily file until Congress decides how you will be taxed.

The General Assembly finally decided how to tax businesses that received federal Paycheck Protection Program loans in 2020.

Members voted to let companies whose PPP loans “were forgiven last year, or who received one of the state’s Rebuild Virginia grants, to deduct up to $100,000 on their 2020 tax returns for eligible expenses paid for by the loans and grants,” according to a recent Virginian-Pilot article.

Congress and the IRS had already stated that these forgiven loans (essentially a grant) are not subject to federal income tax, but Virginia was considering taxing all or part of this “grant” at the state level. Any business that received a PPP loan in 2020 could not have easily filed its tax returns, business and most likely personal, until they made this decision in Richmond. Most business tax returns are due March 15.

Both Congress and the Virginia Assembly had said you could file your returns and then file amended returns once they made decisions, this just means added tax preparation fees to taxpayers.

The General Assembly cut it close, and the federal government still hasn’t decided. Don’t we have enough uncertainty right now?

Michael Sabo, Virginia Beach