Quickfinder Updates

The Updates page provides information supplementing that in the Quickfinder Handbooks. Updates are arranged by publication, or by development type for broader developments that may impact multiple publications (such as tax legislation or late-breaking developments impacting 2016 returns). We invite you to visit this page regularly to view the most recent updates. For continued coverage of tax developments throughout the year, we recommend the Quickfinder Tax Tips Newsletter.

1040 Quickfinder Handbook (2016 Tax Year)

  • [2/7/17] Form 7004 Final Instructions Allow Six-month Extension for Calendar-year C Corporations (Outside Back Cover; Pages 17-2 and 17-6)
    • The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 established new due dates for Form 1120, U.S. Corporation Income Tax Return. For tax years beginning after 12/31/15, the Form 1120 due date is generally April 15 for calendar-year corporations, with an automatic five-month extension allowed (generally to September 15). However, under IRC Sec. 6081(a), the IRS may grant a reasonable extension (generally limited to six months) for filing any return. The IRS has released final instructions for Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, that grant an automatic six-month extension (generally to October 15, but to October 16, 2017 as October 15 falls on a Sunday this year) to calendar-year C corporations rather than the statutory five-month extension. It appears the IRS is using its authority under IRC Sec. 6081(a) to allow for a longer extension period. [Instructions for Form 7004 (Rev. December 2016), available at www.irs.gov]
  • [2/2/17] Kansas (Page 2-9)
    • Kansas revised the 2016 tax computation worksheet in its instructions to account for the new tax exemption for single taxpayers with taxable income of $5,000 or less and married taxpayers with taxable income of $12,500 or less. This changed the 2016 Quick Tax Method computation. For the updated worksheet, click here.
  • [1/11/17] Preparer Due Diligence Requirement for Certain Tax Credits (Pages 12-5 and 12-9)
    • On December 5, 2016, the IRS released temporary regulations (TD 9799) that implement the PATH Act expansion of the preparer due diligence penalties under IRC Sec. 6695(g) to the (1) child tax credit, (2) additional child tax credit and (3) American Opportunity Credit. Previously, the penalty applied only to the earned income tax credit. Preparers must use Form 8867, Paid Preparer’s Due Diligence Checklist, to certify that they have confirmed their clients’ eligibility for these credits. The expanded penalty rules apply for tax years beginning after 2015. Proposed regulations, which mirror the temporary regulations, were also issued. Temp. Reg. 1.6695-2T; Prop. Reg. 1.6695-2. Click here for TD 9799.
  • [1/11/17] 2016 State and Local Sales Tax Deduction (Page 3-13)
    • The IRS has released the state and local sales tax deduction worksheet and the accompanying tables for computing the deduction, which were not available at the time of publication. For the worksheet and tables, click here.
  • [1/5/17] Medical Reimbursement Plans (Page 6-4)
    • On 12/13/16, the President signed into the law the "21st Century Cures Act." The Act extends the relief previously granted under Notice 2015-17 to plan years beginning before 2017. Thus, small employers (average of less than 50 employees in the prior tax year) that maintain an employer payment plan to pay or reimburse employees for individual health care policy premiums before 2017 will not be liable for the Section 4980D penalty. For Notice 2015-17, click here.

      Note: The Act also provides that a "qualified small employer health reimbursement arrangement (HRA)" is exempt from the Section 4980D penalty for tax years beginning after 2016.

All States Quickfinder Handbook (2016 Tax Year)

  • [3/8/17] Oregon (Page OR-5)
    • Oregon issued new instructions for computing the Working Family Household and Dependent Care Credit (Schedule OR-WFHDC or Schedule OR-WFHDC-NP) when the taxpayer does not qualify for the federal credit due to non-taxable dependent care benefits received from his employer. For details, click here.
  • [1/30/17] Kansas (Pages KS-3 and KS-7)
    • Kansas revised the tax computation worksheet in its instructions to account for the new tax exemption for single taxpayers with taxable income of $5,000 or less and married taxpayers with taxable income of $12,500 or less. For details, click here. For its effect on the front cover, click here.

Depreciation Quickfinder Handbook (2016 Tax Year)

  • [2/7/17] Form 7004 Final Instructions Allow Six-month Extension for Calendar-year C Corporations (Outside Back Cover)
    • The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 established new due dates for Form 1120, U.S. Corporation Income Tax Return. For tax years beginning after 12/31/15, the Form 1120 due date is generally April 15 for calendar-year corporations, with an automatic five-month extension allowed (generally to September 15). However, under IRC Sec. 6081(a), the IRS may grant a reasonable extension (generally limited to six months) for filing any return. The IRS has released final instructions for Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, that grant an automatic six-month extension (generally to October 15, but to October 16, 2017 as October 15 falls on a Sunday this year) to calendar-year C corporations rather than the statutory five-month extension. It appears the IRS is using its authority under IRC Sec. 6081(a) to allow for a longer extension period. [Instructions for Form 7004 (Rev. December 2016), available at www.irs.gov]

Health Care Reform Quickfinder Handbook (2017 Edition)

  • [1/11/2017]
    • The 21st Century Cures Act was signed into law on December 13, 2016, which was after the Health Care Reform Quickfinder Handbook was published. Additionally, final regulations under IRC Sec. 36B and IRS Notice 2016-70 were released after the publication of the Handbook. Therefore, a packet containing “marked-up” redline changes to the affected pages in your handbook are available. Click here for the packet.

Individuals—Special Tax Situations Quickfinder Handbook (2016 Tax Year)

  • [2/7/17] Form 7004 Final Instructions Allow Six-month Extension for Calendar-year C Corporations (Outside Back Cover)
    • The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 established new due dates for Form 1120, U.S. Corporation Income Tax Return. For tax years beginning after 12/31/15, the Form 1120 due date is generally April 15 for calendar-year corporations, with an automatic five-month extension allowed (generally to September 15). However, under IRC Sec. 6081(a), the IRS may grant a reasonable extension (generally limited to six months) for filing any return. The IRS has released final instructions for Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, that grant an automatic six-month extension (generally to October 15, but to October 16, 2017 as October 15 falls on a Sunday this year) to calendar-year C corporations rather than the statutory five-month extension. It appears the IRS is using its authority under IRC Sec. 6081(a) to allow for a longer extension period. [Instructions for Form 7004 (Rev. December 2016), available at www.irs.gov]

Premium Quickfinder Handbook (2016 Tax Year)

  • [2/7/17] Form 7004 Final Instructions Allow Six-month Extension for Calendar-year C Corporations (Inside Back Cover, Outside Back Cover; Pages 17-1, 20-1, 25-2 and 25-6)
    • The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 established new due dates for Form 1120, U.S. Corporation Income Tax Return. For tax years beginning after 12/31/15, the Form 1120 due date is generally April 15 for calendar-year corporations, with an automatic five-month extension allowed (generally to September 15). However, under IRC Sec. 6081(a), the IRS may grant a reasonable extension (generally limited to six months) for filing any return. The IRS has released final instructions for Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, that grant an automatic six-month extension (generally to October 15, but to October 16, 2017 as October 15 falls on a Sunday this year) to calendar-year C corporations rather than the statutory five-month extension. It appears the IRS is using its authority under IRC Sec. 6081(a) to allow for a longer extension period. [Instructions for Form 7004 (Rev. December 2016), available at www.irs.gov]
  • [2/2/17] Kansas (Page 2-9)
    • Kansas revised the 2016 tax computation worksheet in its instructions to account for the new tax exemption for single taxpayers with taxable income of $5,000 or less and married taxpayers with taxable income of $12,500 or less. This changed the 2016 Quick Tax Method computation. For the updated worksheet, click here.
  • [1/30/17] Principal Business Activity Codes — Forms 1065, 1120 and 1120S (Page 15-1)
  • [1/12/17] 2017 Federal Withholding Computation — Quick Tax Method (Page 23-1)
    • For the Quickfinder worksheet and Quick Tax Method tables for use in computing 2017 federal income tax withholding, click here.
  • [1/12/17] Where to File: Business Returns Filing Addresses — 2016 Returns (Page 15-1)
    • For the Quickfinder table showing filing addresses for 2016 business tax returns, click here.
  • [1/11/17] Preparer Due Diligence Requirement for Certain Tax Credits (Pages 12-5 and 12-9)
    • On December 5, 2016, the IRS released temporary regulations (TD 9799) that implement the PATH Act expansion of the preparer due diligence penalties under IRC Sec. 6695(g) to the (1) child tax credit, (2) additional child tax credit and (3) American Opportunity Credit. Previously, the penalty applied only to the earned income tax credit. Preparers must use Form 8867, Paid Preparer’s Due Diligence Checklist, to certify that they have confirmed their clients’ eligibility for these credits. The expanded penalty rules apply for tax years beginning after 2015. Proposed regulations, which mirror the temporary regulations, were also issued. Temp. Reg. 1.6695-2T; Prop. Reg. 1.6695-2. Click here for TD 9799.
  • [1/11/17] 2016 State and Local Sales Tax Deduction (Page 3-13)
    • The IRS has released the state and local sales tax deduction worksheet and the accompanying tables for computing the deduction, which were not available at the time of publication. For the worksheet and tables, click here.
  • [1/5/17] Medical Reimbursement Plans (Pages 6-4 and 18-15)
    • On 12/13/16, the President signed into the law the “21st Century Cures Act.” The Act extends the relief previously granted under Notice 2015-17 to plan years beginning before 2017. Thus, small employers (average of less than 50 employees in the prior tax year) that maintain an employer payment plan to pay or reimburse employees for individual health care policy premiums before 2017 will not be liable for the Section 4980D penalty. For Notice 2015-17, click here.

      Note: The Act also provides that a “qualified small employer health reimbursement arrangement (HRA)” is exempt from the Section 4980D penalty for tax years beginning after 2016.

Quickfinder Annual Tax Update (2016 Edition)

  • [2/7/17] Form 7004 Final Instructions Allow Six-month Extension for Calendar-year C Corporations (Pages 1-7, 1-9 and 6-3)
    • The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 established new due dates for Form 1120, U.S. Corporation Income Tax Return. For tax years beginning after 12/31/15, the Form 1120 due date is generally April 15 for calendar-year corporations, with an automatic five-month extension allowed (generally to September 15). However, under IRC Sec. 6081(a), the IRS may grant a reasonable extension (generally limited to six months) for filing any return. The IRS has released final instructions for Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, that grant an automatic six-month extension (generally to October 15, but to October 16, 2017 as October 15 falls on a Sunday this year) to calendar-year C corporations rather than the statutory five-month extension. It appears the IRS is using its authority under IRC Sec. 6081(a) to allow for a longer extension period. [Instructions for Form 7004 (Rev. December 2016), available at www.irs.gov]

Quickfinder Tax Tables for Business Returns (2016 Tax Year)

  • [2/7/17] Form 7004 Final Instructions Allow Six-month Extension for Calendar-year C Corporations (Page 1)
    • The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 established new due dates for Form 1120, U.S. Corporation Income Tax Return. For tax years beginning after 12/31/15, the Form 1120 due date is generally April 15 for calendar-year corporations, with an automatic five-month extension allowed (generally to September 15). However, under IRC Sec. 6081(a), the IRS may grant a reasonable extension (generally limited to six months) for filing any return. The IRS has released final instructions for Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, that grant an automatic six-month extension (generally to October 15, but to October 16, 2017 as October 15 falls on a Sunday this year) to calendar-year C corporations rather than the statutory five-month extension. It appears the IRS is using its authority under IRC Sec. 6081(a) to allow for a longer extension period. [Instructions for Form 7004 (Rev. December 2016), available at www.irs.gov]

Small Business Quickfinder Handbook (2016 Tax Year)

  • [2/7/17] Form 7004 Final Instructions Allow Six-month Extension for Calendar-year C Corporations (Outside Front Cover, Outside Back Cover; Pages C-1, F-1, Q-2 and Q-6)
    • The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 established new due dates for Form 1120, U.S. Corporation Income Tax Return. For tax years beginning after 12/31/15, the Form 1120 due date is generally April 15 for calendar-year corporations, with an automatic five-month extension allowed (generally to September 15). However, under IRC Sec. 6081(a), the IRS may grant a reasonable extension (generally limited to six months) for filing any return. The IRS has released final instructions for Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, that grant an automatic six-month extension (generally to October 15, but to October 16, 2017 as October 15 falls on a Sunday this year) to calendar-year C corporations rather than the statutory five-month extension. It appears the IRS is using its authority under IRC Sec. 6081(a) to allow for a longer extension period. [Instructions for Form 7004 (Rev. December 2016), available at www.irs.gov]
  • [1/30/17] Principal Business Activity Codes — Forms 1065, 1120 and 1120S (Page A-1)
  • [1/12/17] 2017 Federal Withholding Computation — Quick Tax Method (Page I-1)
    • For the Quickfinder worksheet and Quick Tax Method tables for use in computing 2017 federal income tax withholding, click here.
  • [1/12/17] Where to File: Business Returns Filing Addresses — 2016 Returns (Page A-1)
    • For the Quickfinder table showing filing addresses for 2016 business tax returns, click here.
  • [1/5/17] Employer Payment Plans (Pages D-15, K-10 and P-3)
    • On 12/13/16, the President signed into the law the “21st Century Cures Act.” The Act extends the relief previously granted under Notice 2015-17 to plan years beginning before 2017. Thus, small employers (average of less than 50 employees in the prior tax year) that maintain an employer payment plan to pay or reimburse employees for individual health care policy premiums before 2017 will not be liable for the Section 4980D penalty. For Notice 2015-17, click here.

      Note: The Act also provides that a “qualified small employer health reimbursement arrangement (HRA)” is exempt from the Section 4980D penalty for tax years beginning after 2016.

Tax Legislation

  • [1/12/16] Consolidated Appropriations Act, 2016 (Public Law 114-113)
    • The Consolidated Appropriations Act, 2016 (CAA) includes many tax provisions in its Division Q—Protecting Americans from Tax Hikes Act of 2015 (PATH Act) and several more in its Division P—Tax-Related Provisions.

      Staying true to the Quickfinder tradition of providing often-needed reference information in a concise, easy-to-use format, we’ve created tables that summarize key CAA tax provisions applicable to average individuals and small businesses. The CAA also includes many specialized tax provisions that impact real estate investment trusts (REITs), IRS personnel, court proceedings, and deductions and credits that apply to only a few (or very large) businesses—we’ve excluded those to help tax professionals quickly locate the information they will most often need during this tax season and the years ahead.

      Click here for the Quickfinder tables summarizing the key tax provisions of the CAA, which are organized as follows:

      • CAA Division Q (PATH Act) Tax Provisions
        • Expired Provisions Extended Permanently
        • Expired Provisions Extended Through 2019
        • Expired Provisions Extended Through 2016
        • Non-Extender Provisions Added or Changed

      • CAA Division P Tax Provisions Added or Changed

Late-breaking Developments Impacting 2016 Returns*

*Developments occurring after publication of handbooks but impacting 2016 returns

  • [3/14/17] Recent Developments Roundup
    • Foreign Housing Cost Exclusion. A U.S. citizen (or U.S. resident alien) living abroad can elect to exclude the foreign earned income and housing cost amount from gross income (subject to certain limitations). The housing cost exclusion under Code Section 911 is calculated based on the number of days physically present in the foreign location. In addition, the IRS allows a higher housing cost ceiling for taxpayers living in certain high-cost geographic locations (relative to the U.S.). The IRS released the table of adjusted limitations on foreign housing expenses for 2017 and indicated that some taxpayers may elect to apply the 2017 limitations for tax years beginning in 2016—potentially impacting 2016 returns. (IRS Notice 2017-21)
    • Foreign Earned Income and Housing Costs—Time Limit Waiver for 2016. Code Section 911 allows certain U.S. citizens and U.S. resident aliens living and working abroad (qualified individuals) to exclude from income limited amounts of foreign earned income and housing costs. To qualify for the exclusions, (1) a taxpayer’s tax home must be in a foreign country and (2) a bona fide residence or physical presence test must be met (with both tests requiring the taxpayer to be in a foreign country for a certain amount of time). The IRS can waive the minimum time requirements if the taxpayer must leave the foreign country because of war, civil unrest or similar adverse conditions in that country that precluded the normal conduct of business. The taxpayer must be able to show that he could have expected to meet the minimum time requirements if not for the adverse conditions.

      Each year, the IRS publishes a list of the countries that qualify for the waiver for the preceding year and the dates they qualify. For 2016, the IRS has determined that war, civil unrest or similar adverse conditions precluded the normal conduct of business in South Sudan beginning on 7/10/16. Thus, an individual who left South Sudan on or after 7/10/16 will be treated as a qualified individual for the period during which he was present in, or was a bona fide resident of, South Sudan if he establishes a reasonable expectation of meeting the minimum time requirements if not for the adverse conditions. Individuals who establish residency, or are first physically present, in South Sudan on or after 7/10/16 do not qualify. (Rev. Proc. 2017-26)
  • [2/24/17] Recent Developments Roundup
    • 2016 Form 990-EZ Updated. The IRS has released an updated version of the 2016 Form 990-EZ, Short Form Return of Organization Exempt from Income Tax. The revised form includes 29 help icons (depicted as blue question marks) that provide helpful information and links to the IRS’s website. These icons, which work on any device with Adobe Acrobat Reader and Internet access, are intended to help small-size and mid-size exempt organizations avoid common mistakes when completing the return. The IRS warns exempt organizations that the new help icons do not replace the Form 990-EZ instructions. In addition, the IRS reminds nonprofit groups that Form 990-series returns are due on the 15th day of the fifth month after the end of the tax year. For calendar-year organizations, the deadline to file 2016 returns is 5/15/17 (with an automatic six-month extension allowed). (News Release IR-2017-14)
    • Definition of Childless Taxpayer for EIC Purposes—IRS Proposed Change. With respect to the Earned Income Credit (EIC), the IRS has historically taken the position that if a child meets the definition of a qualifying child for more than one taxpayer, and the child is not a qualifying child of a taxpayer under the Section 152(c)(4) tiebreaker rules, then that taxpayer may not claim the childless EIC. However, the IRS has released proposed regulations (REG-137604-07) that would change this policy. Under the proposed rules, if a child is a qualifying child for more than one taxpayer, and the child is not a qualifying child of a taxpayer under the tiebreaker rules, then the child will not be treated as a qualifying child for EIC purposes. Therefore, that taxpayer can claim the childless EIC if the other requirements are met. The proposed regulations would apply to tax years beginning after the date they are published as final. However, pending the issuance of the final regulations, taxpayers may choose to apply the proposed regulations in any open tax years. [Prop. Reg. 1.32-2(c)(3)(ii)]
    • IRS Won’t Reject Returns If Health Coverage Information Missing. Earlier this year, the IRS made changes to its system that would automatically reject tax returns that failed to provide information on health coverage. However, on 1/20/17, the President issued an executive order that directed federal agencies to waive, defer, grant exemptions from or delay implementation of Affordable Care Act (ACA) provisions that impose a fee, tax, penalty or regulatory burden. In reaction to this order, the IRS has announced that it will continue to allow electronic and paper returns to be accepted for processing in instances where taxpayers don’t indicate their health coverage status. However, the IRS reminds taxpayers that the legislative provisions of the ACA are still in force, and taxpayers are still obligated to follow the law and pay any amounts owed. The IRS’s announcement is available at www.irs.gov/affordable-care-act/individuals-and-families/individual-shared-responsibility-provision.
    • Tax Relief for Certain Students Whose Education Loans Were Discharged. The IRS has announced that taxpayers, who took out federal student loans to finance attendance at schools owned by American Career Institutes, Inc., and whose loans were discharged under the Department of Education’s Defense to Repayment or Closed School discharge process, will not have to recognize gross income as a result of the debt discharge. Furthermore, these taxpayers will not be required to increase their taxes or income if they claimed Section 25A education credits or took Section 221 interest deductions or Section 222 higher education expense deductions in a prior year for payments made with proceeds of these discharged loans. The IRS will not require creditors to file information returns and furnish payee statements as a result of the discharge relief provided. This tax treatment is effective for tax years beginning in 2016 or later. (Rev. Proc. 2017-24)
  • [1/11/17] Recent Developments Roundup
    • 2017 Standard Mileage Rates. Beginning on 1/1/17, the standard mileage rates for cars, vans, pickups and panel trucks are 53.5 cents per mile for business miles, 17 cents per mile for medical or moving purposes and 14 cents per mile for charitable purposes. The business expense rate is down half a cent per mile from 2016, and the medical and moving expense rates are down two cents per mile from the 2016 rates. The charitable rate is set by law and remains unchanged from last year’s rate. The portion of the business standard mileage rate treated as depreciation is 23 cents per mile for 2012 and 2013, 22 cents per mile for 2014, 24 cents per mile for 2015 and 2016, and 25 cents per mile for 2017. When computing the allowance under a Fixed and Variable Rate (FAVR) plan, the standard vehicle cost cannot exceed $27,900 for autos or $31,300 for trucks and vans. (IRS Notice 2016-79)
    • ACA Information Reporting Deadlines Extended. The IRS has announced extended due dates and penalty relief for 2016 information reporting mandated by the Affordable Care Act (ACA). The ACA requires detailed information reporting for insurers, self-insured employers and certain other providers of minimum essential coverage under IRC Sec. 6055, as well as employers with 50 or more full-time employees. Employers, insurers and other providers will now have until 3/2/17, rather than 1/31/17, to issue the 2016 forms to individuals for reporting about the health coverage on Form 1095-B, Health Coverage, and 1095-C, Employer-Provided Health Insurance Offer and Coverage. Good-faith transition relief from penalties under IRC Secs. 6721 and 6722 for 2016 information reporting under IRC Secs. 6055 and 6056 also is extended. Note: Because of the extended due date, some individual taxpayers may not receive a Form 1095-B or Form 1095-C by the time they are ready to file their 2016 tax return. Taxpayers may rely on other information received from their employer or other coverage provider for purposes of filing their returns. Taxpayers do not need to wait to receive Forms 1095-B and 1095-C before filing their returns. (IRS Notice 2016-70)
    • IRS Explains Scope of New De Minimis Error Safe Harbor. The IRS has released a notice that explains the scope of the new de minimis error safe harbor for information returns and payee statements created by the PATH Act. The notice also provides procedures for payees to elect to receive a corrected statement. Under the safe harbor, payers do not have to provide an amended information return and payee statement to correct an error that is $100 or less ($25 or less in the case of errors involving tax withholding), unless the payee makes an election requesting a corrected statement. In general, a payee may make the election in the calendar year the statements are required to be furnished. A payer may prescribe any reasonable manner for the payee to make the election, including in writing, online or by telephone. The notice is effective for information returns required to be filed, and payee statements required to be furnished, after 12/31/16. (IRS Notice 2017-9)