Income Tax News

Tuesday is April 15, when income taxes are due for American taxpayers. Some take it in stride, in the spirit of early 20th century U.S. Supreme Court Justice Oliver Wendel Holmes, Jr., who famously quipped that “taxes are the price we pay for a civilized society.” Others grumble at the burden of cutting a hefty check for Uncle Sam to waste on God knows what.

But for many, filing clears the way for getting a pretty fat check back from the feds in the form of a refund. What?

OK, it’s not like Uncle Sam is just doling out federal dollars to anyone. Those who get a refund paid more than the tax code says they owed — often invisibly in the form of paycheck tax withholding — and so the government is just returning the overpayment. Many financial and tax advisers urge clients to avoid it by increasing their tax withholding.

“A lot of people get excited when they receive a refund, but all that means is they overpaid their taxes throughout the year and are now getting their own money back, the money the government’s been holding on to,” said David Kline, vice president of communications and research for the California Taxpayers Association, a nonprofit tax research and advocacy group.

But hey, even if you did lose out on some interest you could have earned on the money, a refund’s like getting a little present in the mail. Nieka Bright, 41, a consultant from Oakland, said she increased her withholding so she wouldn’t end up with an April tax bill, and is expecting to get a refund this year of about $1,500, her first in “quite a while.”

“Refunds are always better than paying back the government for something that could have come out earlier in the year,” Bright said.

That may be why almost three out of four filers nationally overpay Uncle Sam and collect a refund the following spring, according to 2022 IRS data, the most recent year available, crunched by Upgraded Points, a travel and financial research company. The average refund among U.S. filers was nearly $3,300 annually.

The California average refund is close to that national figure, $3,344, 11th highest among the states, Upgraded Points data showed. Leading the states are Florida ($3,852), Texas ($3,774) and Wyoming ($3,720).

Among California’s 58 counties, seven of the 10 with the highest average federal tax refunds are in the Bay Area, the data showed. Leading them all by a wide margin is Marin, at $6,168, highest in the state and 6th highest among counties across the country. Teton County, Wyoming, had by far the highest average refund among U.S. counties: $13,168.

Other Bay Area counties in the top 10 statewide were San Mateo ($4,828), Santa Clara ($4,404), San Francisco ($4,273), Contra Costa ($3,940), Alameda ($3,584) and Napa ($3,524). The share of Bay Area filers receiving refunds ranges from 46% in Marin County to 66% in Solano County, and percentages have been decreasing in recent years.

Michael Stromberg, chief technology officer and lead data analyst at California-based Lattice Publishing, which partners with Upgraded Points to design and execute data studies, said that the average refund amount is higher in more affluent counties because with higher earners, even a small discrepancy in their withholdings can lead to a large refund.

“That trend definitely holds in the Bay Area and may even be more pronounced here because of the region’s wealth,” Stromberg said.

Stromberg said that in recent years, the national share of income tax returns that were overpaid and due either a refund check or future tax credit has been dropping, from 77% in 2017 to 70% in 2022.

California is one of 42 states that assess their own income taxes, which also are due April 15. As with federal income taxes, those who overpay will receive a refund check, but the amounts will differ due to the different state-level tax rates and codes.

California’s top level 13.3% income tax rate is the highest in the country, tax experts say, but they noted that rates for lower income brackets are lower.

“California has extremely high tax rates on high earners, but for lower- and middle-income earners, the rates aren’t particularly high,” said Jared Walczak, vice president of state projects at the Tax Foundation, a nonprofit research organization in Washington, D.C. “So in that sense, California can actually be competitive for those income brackets compared to other states. But as incomes rise, the tax burden becomes much heavier.”

Kline added that California’s top 5% of income earners pay about 62% of all the state’s personal income tax revenue.

“So we’re heavily reliant on high-income earners staying here and paying taxes,” Kline said.

Income tax is California’s single largest source of state revenue, 41%, far more than sales tax (17.25%) and corporate taxes (14.77%), making the state budget vulnerable to market swings that affect high earners’ incomes. The programs receiving the largest share of state tax revenue are health and human services (38%), K-12 education (27.35%) and higher education (8%).

The biggest recipients of federal spending are Social Security income for older people (22%), debt payments (14%), health programs (13%), Medicare health coverage for older people (13%) and national defense (13%).

President Trump and his fellow Republicans who control Congress have pledged to extend the Tax Cuts and Jobs Act that he signed in 2017 and is set to expire at the end of the year. Should that not happen, taxpayers next year may find themselves owing more and seeing smaller refunds.

“There’s a lot in flux right now that could impact taxpayers in California and across the country at the federal level,” Walczak said.

Originally Published: April 14, 2025 at 2:33 PM PDT

Originally Appeared Here

INDIANAPOLIS (WISH) — An Indiana University professor and former mayor on Friday said most local governments would have very little money to spare if lawmakers approved a property tax overhaul.

Paul Helmke is the director of the Civic Leaders Center at the IU O’Neill School of Public and Environmental Affairs. He served three terms as the mayor of Fort Wayne from 1988 to 2000. Helmke said property tax revenue is crucial for local functions such as emergency services and street repair, in addition to funding schools. Unlike income taxes, he said property tax revenue is entirely local. The state doesn’t receive any.

Indiana homeowners have endured a massive spike in assessed values since 2021. Property taxes became the top issue in the 2024 gubernatorial election and Gov. Mike Braun has campaigned for a property tax cut ever since he took office. His tax plan has gone through a total of four iterations at the Statehouse to date. At a rally in support of Braun’s proposal last month, homeowners told News 8 their bills have risen by thousands of dollars, in some cases.

Helmke said those spikes are due primarily to a combination of inflation and rising assessed values. In an interview with News 8 for Sunday’s “All INdiana Politics,” he said his own property tax bill went up 15 percent even though his rate went down.

“It’s something you could argue, well, I’m wealthier now, my house is worth more, but again, the catch is, that doesn’t mean there’s more money in your pocket,” he said. “So that’s why there’s this push for property tax refrom. When your value goes up, that doesn’t give you more money to spend, so it’s harder to pay those property taxes.

Braun originally called for lawmakers to reset property taxes to 2021 levels. The current version of the plan instead allows homeowners to claim a credit of up to 10% on their total property tax bill, to a maximum of $300. Seniors on fixed incomes could claim an additional credit of $150 while disabled veterans could get an extra $250 credit. Those two credits could not be combined with each other. House Republicans also added a long-sought business personal property tax exemption and rolled in a separate piece of legislation that requires traditional public schools to share property tax revenue with charter schools.

The measure also caps local income tax, or LIT, rates at 2.9%, down from 3.75% in current law. House Republicans have said local governments would not raise LIT rates high enough to offset homeowners’ savings under the bill. Helmke disagrees. He said the vast majority of local government units in Indiana have LIT rates so far below the 2.9% cap they could make up the lost revenue and still remain below the limit. He said it’s very likely counties will take advantage of that.

“I think for most homeowners, it’s probably going to be a wash. Because if you own a home, you could see a $300 tax reduction. Maybe not next year but in the next 2 to 3 years, you’re going to see an income tax hike that’s more than that,” he said.

Gov. Mike Braun late Thursday said he looked forward to signing the bill in its current form.

That would require the Senate to concur with the House’s package rather than send it to a conference committee, where the bill could be rewritten yet again. A motion to concur has already been filed and SB1 is listed on the Senate’s concurrence calendar for Monday. Senate President pro tempore Rod Bray, R-Martinsville, on Thursday indicated he would prefer to concur and send the bill to Braun.

“I think we’re for sure talking about it as a caucus. We’ve been looking at it very closely, our caucus members have, looking at some runs and making sure they understand how it affects their communities and so we’ll continue to talk about it over the weekend,” he said. “But it’s my strong hope that we’ll be able to concur.”

“All INdiana Politics” airs at 9:30 a.m. Sunday on WISH-TV.

SB1 offers meaningful tax relief for Hoosiers. The plan to CUT, CAP, and REFORM means relief now and systemic changes for the future to protect taxpayers. Thank you to the House for their hard work and I look forward to the Senate sending this to my desk for signature next week!

— Governor Mike Braun (@GovBraun) April 10, 2025

Originally Appeared Here

The acting head of the IRS plans to resign after being bypassed over a new agreement to share the tax data of undocumented immigrants with Homeland Security personnel, according to two people familiar with the situation.

Acting IRS commissioner Melanie Krause — the tax agency’s third leader since President Donald Trump’s inauguration — will participate in the deferred resignation program the Trump administration offered to agency employees in recent days, said the people, who spoke on the condition of anonymity for fear of reprisal.

Disagreements over the agency’s direction also factored into Krause’s decision to leave, the people said.

Losing three agency leaders in three months is “unprecedented,” one of the people said. “I don’t think we’ve seen anything like this at IRS.”

Treasury Department officials in recent days sought to circumvent IRS executives so immigration authorities could access private taxpayer information, the people said. Those conversations largely excluded Krause’s input.

Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi L. Noem signed an agreement Monday allowing the practice, although IRS lawyers had counseled that the deal probably violates privacy law. Krause learned of the deal after representatives from the Treasury Department released it to Fox News, the people said.

Krause also felt unable to push back on moves the U.S. DOGE Service was forcing through the tax agency, they said, including dramatic staffing cuts, a technology infrastructure overhaul and long-term IRS priorities.

“She no longer feels like she’s in a position where she can impact the decision-making that’s happening,” said a person familiar with the situation. “And [she believes] that some of the decisions that are being made now are things the IRS can never recover from.”

A Treasury Department spokesperson said Krause led the IRS “through a time of extraordinary change” as it tries to upgrade its technology and carry out other changes to help make government more efficient. “We wish Melanie well on her next endeavor,” the spokesperson said.

Representatives from the White House did not immediately respond to a request for comment.

Krause was the IRS’s chief operations officer before she became acting commissioner on Feb. 28. Her predecessor, Doug O’Donnell, retired rather than clash with DOGE and immigration enforcement officials who wanted broad access to confidential personal taxpayer data.

O’Donnell replaced Danny Werfel, the Biden-appointed IRS commissioner who hoped to remain in office during Trump’s term. But Trump announced plans to fire him and bring on former congressman and auctioneer Billy Long, a six-term Republican lawmaker without experience on tax-writing committees.

The Trump administration has moved aggressively to bring the IRS in line with the president’s priorities. Officials held a recent gathering with tax IT engineers to discuss building a cross-government data-sharing system that would allow agencies to use personal tax information to hunt for fraud in social safety net programs. IRS lawyers warned Krause that the initiative probably violated privacy laws, which prevent the sharing of personal data even with other government agencies.

Monday’s agreement with DHS would permit immigration enforcement officials to obtain highly protected tax information for people the Trump administration hopes to detain and deport. A redacted copy of the memorandum was filed in the U.S. District Court for Washington, D.C., as part of a lawsuit brought by worker and immigrant advocacy groups seeking to block the data-sharing.

The possibility of such an agreement had raised alarms among current and former IRS officials, who said it was a privacy breach and contravened the tax agency’s longtime guarantee that taxpayers suspected of being in the country illegally wouldn’t have their information turned over to immigration enforcement. Undocumented workers’ wages are subject to the same tax withholding and reporting requirements that applies to other U.S. residents.

DHS officials previously suggested they’d ask the IRS for help locating 7 million people. There are about 11 million undocumented immigrants in the United States, according to federal officials’ estimates.

Improper disclosure of tax information is punishable with prison time and hefty fines. Taxpayers whose privacy is violated are entitled to monetary compensation.

Under the terms of Monday’s agreement, Immigration and Customs Enforcement officials must provide the targeted person’s name and address, and the specific reason the disclosure could be relevant to a non-tax-related criminal investigation.

DHS spokeswoman Tricia McLaughlin said the “government is finally doing what it should have all along: sharing information across the federal government to solve problems.”

The memorandum sets out a “clear and secure process to support law enforcement’s efforts to combat illegal immigration,” a Treasury Department spokesperson said.

John Koskinen, who was IRS commissioner under President Barack Obama and Trump, said Krause’s situation shows that the Trump administration has “no qualms” about interfering at the tax agency. It is “unheard of that you would try to manage the agency from the Treasury Department,” he said.

Krause is the latest executive to leave the IRS amid a broad leadership shake-up. Employees who accept the deferred resignation offer are set to leave the agency on April 28, roughly two weeks after the April 15 tax-filing deadline.

Dozens of IT and cybersecurity officials have been placed on leave. About 7,000 employees were laid off in February, with more cuts announced last week.

The administration plans to slash the agency’s head count by about 25 percent compared with where it was in January, as part of the White House’s effort to shrink the size of the federal government.

Originally Appeared Here

After months of grappling with an uncertain economy shaken by the loss of federal jobs and grants, the Maryland General Assembly is finally poised to pass a budget Monday that cuts about $2 billion in spending while overhauling the state’s income tax policy and creating several new taxes and fees to fill a more than $3 billion budget hole.

Most Marylanders will not see major changes to their income tax bills from the revisions first proposed by Gov. Wes Moore (D) in January. About 6 in 10 taxpayers will see a modest decrease on their tax bill, with an average savings of $43, according to an analysis by the Board of Revenue Estimates. A little over one-third of taxpayers will see no change. And just under 6 percent of taxpayers — largely those who make $500,000 or more a year — will see an average increase of $1,849.

The budget also creates a new 2 percent surcharge on capital gains, higher vehicle fees, a new $5 fee on tires that will boost the state’s Transportation Trust Fund, higher taxes on cannabis and sports betting, and a 3 percent tax on technology services. The Tech Tax has exemptions for cybersecurity companies, quantum-computing companies and intellectual-property services — key industries that the governor has identified as growth areas for the state’s economy.

All of those tax and fee changes will net the state about $1.6 billion in revenue, legislative leaders said on Friday.

“We’ve made sure our core programs are solid and funded,” said Del. Ben Barnes (D-Prince George’s), chair of the House Appropriations Committee. “We know we have to take cuts and we took about $2 billion in cuts, but we also raised the revenue to make sure our core values are protected.”

Even with the deep cuts, lawmakers restored funding for some key priorities, including education restructuring and disability services. Barnes said the budget cuts thread the needle “between doing what is hard and doing what is intolerable” in a Democratic-controlled state that is uniquely at risk from the federal job and funding cuts coming out of the Trump administration.

Sen. Guy Guzzone (D-Howard) also emphasized how the budget agreement reflects the state’s values.

“We protected some of the things that are most dear to us,” Guzzone, who chairs the Senate Budget and Taxation Committee, said after a panel of legislative leaders finalized the budget. “We decided it was in the state’s interest to work together, and we did that.”

Democratic leaders in both chambers agreed to a budget plan in conference committee on Friday, setting up lawmakers to take final votes on the last day of the 90-day legislative session. The bill resolved some differences between lawmakers in the house and senate over education cuts, the transportation budget, triggers that force the state to revisit the budget and a new 3 percent tax on technology services that has been labeled the “Tech Tax.”

Republicans in Annapolis, who are in the minority, pressed for a budget with more cuts and less new revenue.

“You cannot tax your way to prosperity,” Senate Minority Leader Stephen S. Hershey Jr. (R-Queen Anne’s) said during floor debate over the budget on Tuesday. “And that’s what this budget does.”

Moore’s original tax plan would have cost some low- and middle-income Marylanders more, because it eliminated itemized deductions for all income brackets. Lawmakers amended that proposal to phase out itemized deductions among those who make more than $200,000 a year, so that those who make more are eligible for fewer deductions.

That change shifted more of the tax burden to a small number of high-income taxpayers, many of whom report volatile nonwage income, according to analysts at the Board of Revenue Estimates.

“Accordingly, State income tax revenues will increase more in good years and grow more slowly or decline by a greater amount in recessions and/or stock market corrections,” the board said in a report published last month. The report also noted that the state is facing “very uncertain economic circumstances” because of actions taken by the Trump administration.

Originally Appeared Here

More than 1 million eligible Americans still have time to claim their missed payments before April 15, 2025, the IRS’s $1,400 stimulus check deadline draws near. The American Rescue Plan Act, which was created to offer financial assistance during the COVID-19 epidemic, includes this payment, which is linked to the 2021 Recovery Rebate Credit (RRC).

As the IRS’s $1,400 stimulus check deadline approaches, over 1 million eligible Americans still have time to claim their overdue payouts before April 15, 2025. (Unsplash )

You may still qualify if you never received the entire $1,400 stimulus check or if you did not submit a 2021 tax return, but there is not much time left. We explain who is eligible, how to submit a claim, and what occurs if you miss the deadline below.

Significance of deadline

In 2021, the IRS issued the third round of COVID-19 economic impact payments, which included the $1,400 stimulus payment. Millions of eligible individuals were left out even though the majority of Americans received their cheques automatically because of:

*Making mistakes in filing

*Insufficient knowledge of the 2021 Recovery Rebate Credit

*Being exempt from filing taxes because of a low income

In order to claim the money, the IRS is now advising taxpayers who were qualified but never got their payout to submit a 2021 tax return by April 15, 2025.

Also read: What is IRS MATH Act? US House passes bill to transparently handle tax return errors, here’s what happens next

Eligibility

You might be eligible for a $1,400 stimulus payout from the IRS if:

*In 2021, your Social Security number was active.

*You weren’t listed on someone else’s tax return as a dependent.

*In 2021, you did not receive the entire $1,400 payment.

*Despite being eligible to file a 2021 tax return, you chose not to do so.

The credit is particularly crucial for low-income people and retirees who depend on Social Security since, as the IRS has confirmed, even those with little or no income in 2021 can claim it.

The IRS $1,400 stimulus check claim process before April 15

*You can qualify for the Recovery Rebate Credit (RRC) if you did not file a 2021 tax return or if you were paid less than the entire $1,400.

*You must file a 2021 tax return by April 15, 2025, in order to be eligible for the IRS $1,400 stimulus payment. To receive the payout, you must file a return even if you don’t typically file taxes.

*You can mail or online file your return.

*Eligible taxpayers can file for free under the IRS Free File program.

*For those who require assistance with filing taxes, there are IRS Taxpayer Assistance Centres.

*The IRS will send your missed stimulus payment by mail cheque or direct deposit after processing your 2021 tax return.

Why the $1,400 stimulus check didn’t reach some Americans

The IRS claims that because of misunderstandings about the filing requirements, many qualified Americans were unable to get the $1,400 stimulus check.

Typical explanations include:

*Due to low income or dependence on Social Security payments, 2021 tax returns were not filed.

*Filing mistakes that resulted in a blank Recovery Rebate Credit (RRC) field

*Believing they were not qualified because they had previously received stimulus funds

The IRS has identified one million taxpayers who may still qualify and is writing to inform them of their unpaid balance in order to keep them from losing out.

Things you should know

After examining 2021 tax forms, the IRS determined that around 1 million taxpayers qualified for the stimulus payout since the RCC field was either left blank or $0 was wrongly recorded.

These taxpayers are now getting automatic payments by mail or direct transfer, with the maximum amount being $1,400 and the amount varying based on several factors.

A supplemental letter outlining the payment would also be sent to impacted taxpayers, the IRS said. The $1,400 payment could still be lost by those who never filed a 2021 return, though, and they must do so by April 15 in order to be eligible for the credit. For some taxpayers, the IRS website offers free filing choices.

It is particularly crucial for low-income people or those who do not normally file tax returns since, as the IRS has stressed, the credit can be claimed even if a person has little or no income in 2021.

The taxpayer must not have been included as a dependent on another person’s return and must have a current Social Security number in order to qualify.

Depending on their specific situation, taxpayers who submit a 2021 return may potentially qualify for additional pandemic-era benefits, such as the Earned Income Tax Credit and the Child Tax Credit. A much bigger return could result from claiming all the credits at once.

Also read: IRS tax refund April 2025: Who will get back their deposit this month? Schedule here

Additionally, the IRS is providing assistance through Taxpayer Assistance Centres, particularly for those who require assistance completing their 2021 returns or confirming their eligibility. The IRS’s contact website allows users to book locations and appointments.

Originally Appeared Here

Conservative Leader Pierre Poilievre announced his second tax break of the campaign targeted at investors Sunday, promising to defer capital gains taxes if the proceeds are reinvested in Canada.

“The current capital gains tax locks up investment in old assets, because selling them would force a big bill,” Poilievre said in a statement. 

“Allowing reinvestments without tax will unlock billions to immediately begin building, hiring, investing and growing.”

The Conservatives say the tax cut, which would be available to investors from Canada Day until the end of 2026, will be made permanent if it’s proven successful at driving economic growth.

The party says any gains made on Canadian investments will still be taxable when the investor cashes out their investment for good or moves the proceeds of that investment out of Canada. 

“This will be like economic rocket fuel for Canada,” Poilievre told an audience in Toronto on Sunday. “We will soar above the Americans. We will reverse the lost Liberal decade and make this country boom.”

The Conservatives say the change would cost $5 billion in 2025 and $5.5 billion in 2026. Poilievre also announced last week that his government would cut the lowest marginal rate of income tax by 2.25 percentage points, at a cost of $14 billion a year.

Refocusing the campaign on Trump

On Thursday, Poilievre announced a future Conservative government would allow investors to contribute $5,000 more a year to their tax-free savings accounts (TFSA) — as long as they invest that extra cash in Canadian companies.

The Conservatives did not provide a costing for the TFSA top up. 

CBC News has reported that sources within the party are complaining about a “dysfunctional” campaign with too much centralized power and the belittling and aggressive treatment of staff.

At the heart of that reported dysfunction are concerns by some Conservatives that the campaign needs to pivot — and focus more on the threat posed by the U.S. President Donald Trump. 

Asked about whether he intends to focus on Trump and tariffs, Poilievre insisted his campaign is already doing so. 

“Today we are standing up to the Americans with a Canada first reinvestment tax cut,” he said. “President Trump has said he wants the Liberals back in power. We know why; he wants Canada weak.”

Blanchet criticizes Carney over quiet weekend

Speaking in Danville, Que., on Sunday, Bloc Québécois Leader Yves-François Blanchet announced a host of policies targeting seniors, including:

• Expanding a tax credit for Quebecers aged 60 and over to the rest of Canada.
• Implementing an automatic income tax return for seniors.
• Adding protections for defined benefit pension plans.
• Increasing the home care tax credit for people aged 70 and over.
• Introducing a tax credit for energy-efficient renovations to multi-generational residences that allow seniors to stay in their homes longer.
• Changing federal pension legislation to allow people who remarry or enter a common-law relationship after turning 60 to receive survivor benefits from their new spouse’s estate. 

At the announcement, Blanchet told reporters that Liberal Leader Mark Carney is taking Quebec votes for granted by not holding news conferences this weekend.

Blanchet said Carney had an “orgy of skeletons” in his closet and accused him of hiding from the media. 

On Saturday, Carney met with volunteers at his Nepean riding office. Sunday Carney met with an Ottawa family before flying to Toronto where he met with volunteers. The Liberal leader has not taken questions from the media over the two days.

Singh pitches government loans for homebuyers

NDP Leader Jagmeet Singh announced his party’s plan to give first-time homebuyers who qualify for a mortgage access to publicly backed, low-interest, fixed-term loans.

“This will make a huge difference in people’s lives; they’d have affordable loans so they can actually buy their first home,” Singh said in Port Moody, B.C., Sunday.

WATCH | Singh says his plan would help more Canadians afford a home: 

Singh announces plan for first-time homebuyers

NDP Leader Jagmeet Singh, speaking in Port Moody, B.C., on Day 8 of the election campaign, says if his party wins the election, it would offer low-interest, fixed-term, publicly backed mortgages for first-time homebuyers.

Asked if he’s approached banks and credit unions about the possible impact of government loans entering the mortgage market, Singh said he was not concerned about the opinions of Canada’s big banks.

“I’m not too worried about what banks think. This is about helping out people,” Singh said. “I think it’s the right thing to do to help out a first-time homebuyer.”

Originally Appeared Here

The Roundhouse in Santa Fe. Post file photo

STATE News: 

• Bill to eliminate state income tax for many working families now heads to Governor
  

SANTA FE – After conference committee meetings Friday, the House of Representatives and the Senate both voted to agree on amendments to House Bill 14, a tax bill that would effectively eliminate state income tax for tens of thousands of New Mexico families.

HB 14 increases and expands tax cuts for nearly 400,000 New Mexicans, includes credits for foster parents and guardians, expands a Gross Receipts Tax deduction for healthcare practitioners, and makes a modest increase to taxes on alcoholic beverages, directing funds to address alcohol related harms across New Mexico. 

HB 14 would effectively eliminate state income tax for:

Married couples	Single individuals
with three kids making $70,000 or less	with three kids making $60,000 or less
with two kids making $65,000 or less	with two kids making $55,000 or less
with one kid making $55,000 or less	with one kid making $40,000 or less
with no kids making $30,000 or less	with no kids making $25,000 or less

These tax cuts are refundable, so families would receive a refund payment for any credits going beyond the household’s state tax liability.

“In an open and transparent process, members of the House and the Senate came together to reach an agreement on a tax package that will bring relief to New Mexico families who are struggling to keep up with rising costs,” said HB 14 sponsor Rep. Derrick Lente (D-Sandia Pueblo), who serves as Chair of the House Taxation and Revenue Committee. “In the face of economic uncertainty at the federal level, New Mexico is putting more money in the pockets of the public school teachers, police officers, firefighters, and the workers who power our state.”

The amended tax bill now also includes: 

• Foster Parent and Guardian Tax Credit: provides financial relief for foster parents and guardians with a refundable $250 per month credit;

• Liquor Excise Tax Increase: raises the liquor excise tax by 20% to generate additional revenue for targeted programs to help address alcohol harms and support treatment; and

• Health Practitioner Coinsurance Deduction: expands the existing Gross Receipts Tax deduction for healthcare providers to include coinsurance payments.

Most of the tax changes in this bill would take effect in fiscal year 2027. HB 14 now heads to the Governor’s desk to be signed into law. 

Below is a list of other key affordability legislation passed by the House this session: 

• House Bill 6 (Awaiting Governor’s signature): Raises minimum pay for workers on publicly-supported projects 
• House Bill 7 (Awaiting Senate floor vote): Provides a head start at financial independence for every child born in New Mexico, by establishing “baby bonds” that would generate interest throughout the individual’s childhood and which could be used for education, housing, entrepreneurship costs, or investment opportunities when the child graduates from high school
• House Bill 22 (Awaiting Senate floor vote): Stops employers from taking credit card fees out of the wages of tipped workers 

• • Raises minimum teacher salaries by $5,000 and providing a 4% average salary increase for public school personnel;

  • Improves food security with $10 million in annual funding for food banks;

  • Directs $110 million to targeted housing development with a focus on Bernalillo and Doña Ana counties;

  • Makes $45.9 million available to housing providers to focus on specialized housing solutions and a strategic response to homelessness; and

  • Delivers $15 billion in state and federal funding for Medicaid and other critical healthcare services.

• House Bill 69 (Awaiting Governor’s signature): Expands access to the federal Public Service Loan Forgiveness (PSLF) program within New Mexico;
• House Bill 15 (Awaiting Senate floor vote): Strengthens New Mexico’s healthcare workforce, particularly in high-demand fields, by incentivizing New Mexico alumni working in healthcare to return to the state;
• Senate Bill 267 (Awaiting Governor’s signature): Adds new protections for residential renters and applicants for residential rentals, including capping application and late fees and requiring more notice for increasing fees;
• House Bill 91 (Awaiting Governor’s signature): Allows public utilities to implement additional rate structures intended to reduce utility costs for low-income customers. and
• House Bill 47 (Signed by Governor): Increases property tax exemptions for veterans.

Originally Appeared Here

Individuals and businesses in parts of West Virginia affected by severe storms, straight-line winds, flooding, landslides and mudslides that began on Feb. 15 now have until Nov. 3 to file various federal individual and business returns and make tax payments. 

The IRS will offer relief to any area designated by the Federal Emergency Management Agency; this currently includes Logan, McDowell, Mercer, Mingo, Wayne and Wyoming Counties.

Individuals and households that reside or have a business in these counties qualify for this filing and payment relief. The same relief will be available to any other counties added later to the disaster area. The current list of eligible localities is on the Tax relief in disaster situations page on IRS.gov. 

Michael Swensen/Photographer: Michael Swensen/Ge

The tax relief postpones various tax filing and payment deadlines that occurred from Feb. 15 through Nov. 3 this year. Affected individuals and businesses will have until this Nov. 3 to file returns and pay taxes originally due during this period.

The November deadline will now apply to: 

• Individual income tax returns and payments normally due on April 15, 2025.
• 2024 contributions to IRAs and health savings accounts for eligible taxpayers.
• Quarterly estimated tax payments normally due on April 15, June 16 and Sept. 15, 2025.
• Quarterly payroll and excise tax returns normally due on April 30, July 31 and Oct. 31, 2025.
• Calendar-year partnership and S corp returns normally due on March 17, 2025.
• Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2025.
• Calendar-year tax-exempt organization returns normally due on May 15, 2025. 

Penalties for failing to make payroll and excise tax deposits due on or after Feb. 15, 2025, and before March 3, 2025, will also be abated if the deposits were made by March 3, 2025. 
The disaster assistance and emergency relief for individuals and businesses IRS page has details on other returns, payments and tax-related actions qualifying for relief during the postponement period.  

The IRS automatically provides filing and penalty relief to any taxpayer with an address of record in the disaster area. These taxpayers do not need to contact the agency to get this relief. 

If an affected taxpayer doesn’t have an address of record in the disaster area — because, for example, they moved to the disaster area after filing their return — they could receive a late filing or late payment penalty notice from the IRS for the postponement period. The taxpayer should call the IRS Special Services at (866) 562-5227 to update their address and request disaster tax relief. 

In addition, the service 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 in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS Special Services toll-free number above. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Disaster area tax preparers with clients outside the disaster area can choose to use the Bulk Requests from Practitioners for Disaster Relief option, described on IRS.gov. 

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 2025 return normally filed next year) or the return for the prior year (2024). Taxpayers have up to six months after the due date of their federal income tax return for the disaster year (without regard to any extension of time to file) to make the election. For individual taxpayers, this means Oct. 15, 2026.

The FEMA declaration number (4861-DR) should be written on any return claiming a loss.

Originally Appeared Here

Small business owners in Montana know firsthand how government overreach stifles economic growth and burdens entrepreneurs. The IRS’s latest rule targeting business partnerships is yet another example of Washington, D.C. bureaucrats placing unreasonable strain on small businesses.  

Implemented in the 11th hour by the outgoing administration, this rule is a last-ditch effort to push through a failed Biden regulatory agenda. Rather than modernizing outdated processes, the IRS is imposing more regulations, forcing businesses to navigate complex reporting requirements.

Montana’s economic success relies on its small businesses, which constitute 99.3% of our businesses and employ over 65% of our workforce. Unlike large corporations with legal teams, small businesses lack the resources to push back against pervasive IRS overreach. 

Compliance with this new rule isn’t just an administrative hassle — it’s a costly disruption that diverts time, money, and personnel away from business expansion.

This last-minute attempt to expand IRS authority is a further escalation of the Biden administration’s crackdown on business partnerships. In 2023, the IRS established a special unit to focus on small business partnerships. This unit operates outside the standard IRS audit structure, creating a parallel process that confuses taxpayers and disrupts operations. Business owners now face conflicting guidance from multiple audit teams, none of which provide clear resolutions.

This audit unit is a weaponized arm of the federal government, functioning with ideological bias rather than sound tax policy.  Internal descriptions of its work reveal a disturbing pattern — its members view those who lawfully utilize basis adjustments as “evil.” This blatant targeting of taxpayers based on political leanings is an abuse of power that further burdens honest business owners and undermines trust in the tax system.

President Trump has rightly taken steps to end the weaponization of federal agencies, issuing an executive order titled “Ending the Weaponization of the Federal Government” to dismantle politically motivated enforcement efforts. Under this directive, agencies must cease investigations, prosecutions, and civil enforcement actions that target Americans based on ideological differences. The IRS pass-through audit team falls squarely within this mandate and should be immediately disbanded.

Additionally, Trump’s executive order on a federal hiring freeze underscores the need for agencies to maximize efficiency and eliminate waste. The IRS pass-through audit team does the opposite — operating in an unnecessary parallel structure, demanding redundant paperwork, and issuing misguided rulings that harm compliant taxpayers. This unit exemplifies bureaucratic inefficiency and is an affront to taxpayers who expect the government to work for them, not against them.

The Trump administration should take immediate steps to disband the IRS pass-through audit unit, and Congress must ensure this abuse of power is permanently curtailed. And they should cancel the pending IRS rules on business partnerships.

Montana’s Sens. Steve Daines and Tim Sheehy must recognize the devastating impact this rogue audit team will have on our state’s economy and fight to eliminate it. Small business owners should not bear the brunt of politically motivated overreach while the IRS fails to address its own inefficiencies.

The IRS should not have the power to unilaterally impose rules that create unnecessary burdens on small businesses. We need policies that encourage investment, job creation, and economic stability, not more red tape that hinders entrepreneurs. It’s time for lawmakers to stand up for small businesses, rein in the IRS, and put an end to regulations that do more harm than good — starting with the immediate disbanding of the IRS pass-through audit unit.

Dan Bartel is a former Montana Senator who served on the Senate Finance and Claims Committee. He lives in Lewistown.

Originally Appeared Here

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If you make less than $150,000 a year, President Donald Trump wants to abolish your taxes, U.S. Commerce Secretary Howard Lutnick said in an interview with CBS on Tuesday.

“I know what his goal is: No tax for anybody who makes less than $150,000 a year. That’s his goal. That’s what I’m working for,” Lutnick said in the interview.

Lutnick also mentioned Trump’s plans to eliminate taxes on tips, overtime pay and Social Security. Other tax proposals that Trump floated in 2024 and earlier this year include creating a tax deduction for interest payments on car loans, and easing the income tax rules that expatriate Americans must follow.

Trump has also talked about eliminating the Internal Revenue Service, or IRS, in favor of an External Revenue Service, to collect money from foreign sources. And since taking office in January, he’s hit some of the U.S.’s biggest trading partners with a slew of tariffs. Read more about Trump’s tax plans.

But specific details for many of Trump’s tax proposals are few and far between.

Without knowing more about the proposed tax cut for those earning $150,000 or less, it’s difficult to assess how the plan would work, says Carl Lewis, a certified public accountant in New Orleans.

“I’m not very hopeful about the way it is presented as a broad-based cut,” he says. According to Lewis, the plan could include provisions that allow some taxpayers to qualify but not others.

Also, the idea of eliminating taxes for those earning $150,000 or less may refer solely to income taxes, and likely wouldn’t eliminate the payroll taxes that U.S. workers pay toward Social Security and Medicare. A majority of taxpayers earning less than $200,000 pay more in payroll taxes than income taxes, according to a report by the Tax Foundation in 2019, based on data from the U.S. Congress Joint Committee on Taxation.

Meanwhile, Congress is currently debating the extension of the Tax Cuts and Jobs Act. The sweeping legislation, initially enacted in 2017, during Trump’s first term, brought about lower income tax rates, a near-doubling of the standard deduction and a much more generous child tax credit, among other changes. All of these provisions are set to expire at the end of this year, unless Congress acts.

No taxes on Social Security income

During his presidential campaign, Trump proposed many initiatives to cut taxes for Americans. For example, Trump said he wants to eliminate taxes on Social Security retirement benefits for seniors.

While retirees with low incomes generally don’t owe taxes on their Social Security benefits, those who receive income from other sources, such as wages or rental income, may owe income tax on up to 85 percent of their benefits.

According to the Tax Policy Center, a plan to eliminate taxes on Social Security benefits would benefit beneficiaries earning between $63,000 and $200,000 the most.

However, tax cuts for Social Security could come at a price, according to experts. Exempting Social Security benefits from income tax would increase the budget deficit by $1.6 trillion over ten years and accelerate the trust fund’s insolvency, according to a report by the Tax Foundation.

Ending taxes on tips and overtime pay

Trump also has pledged to eliminate income taxes on tips and overtime income, but his administration hasn’t yet detailed how those plans will work.

However, the Tax Foundation warned that eliminating overtime taxes could distort the labor market. Since salaried positions are exempt from overtime rules, more employees would seek jobs that offer overtime pay.

Bottom line

While it’s unclear precisely how Trump’s plan to end taxes on income of less than $150,000 would be implemented, he has vowed to change tax rules considerably during his second term.

Lewis said he expects that, with a Republican-controlled Congress, Americans should expect significant tax-law changes to take place during Trump’s second term in office.

Originally Appeared Here