Holyoke Tax Service Welcomes New & Returning Clients For 2023! We look forward to another great year of serving all your tax-related needs, including your individual and business returns, rental real estate and multi-state returns, payroll, and much more.
Tax Season is here! The IRS began accepting e-filed returns on January 23.
At Holyoke Tax Service we are always upfront with our customers. In keeping with that philosophy, we regret that some of you are going to be disappointed this year because the beneficial provisions of 2021, most notably the fully-refundable and increased Child Tax Credit, the expanded Earned Income Credit for people without qualifying children, and Recovery Rebate Credit (a/k/a "fourth stimulus") were all only one-time, and we have reverted to the prior rules for 2022 (although, of course, if you haven't yet filed, or need to amend, 2021, we can still do that). Nonetheless, please be assured that, no matter how much the rules change, we will always obtain the best possible results for you.
COVID-19 Essential Employee Premium Pay Program - Round 3
Some of us may have been a little surprised to receive a $250 check from the Commonwealth of Massachusetts this month for a program we did not believe we qualified for. This is because, while like the first two rounds of $500 checks for Massachusetts residents during 2021 who earned at least $13,500 of income from employment (determined separately for each spouse in the case of a joint return), and had total household income below 300% of the federal poverty level, in the third and final round the requirement that an individual had not received any unemployment compensation was dropped.
The government press release helpfully notes that, while these payments are specifically excluded from Massachusetts tax, and that since they are below the $600 filing threshold 1099-G's will not be issued, they "may" be federally taxable. Obviously these payments are, in reality, not at all compensation for services performed, as there is no correlation to hours worked, nor even that they were "essential" (could have been all remote). However, it remains an open question whether they may be construed as qualified disaster relief payments, perhaps in this case to promote the general welfare by mitigating the negative impact of the pandemic on low-to-moderate income families. Stay tuned.