Daily Deduction Round Three Of Pandemic Relief Is Almost Done.
Renu Zaretsky
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Senate approves $1.9 trillion coronavirus relief package. The bill includes, among other provisions: $1,400 per-person payments for single filers making up to $75,000 and joint filers making up to $150,000, phasing out at $80,000 and $160,000; weekly additional jobless benefits of $300 through September 6 that will be partially tax-free. The bill also includes a temporarily expanded and newly-advanceable Child Tax Credit of up to $3,600 per child, tax-free student loan forgiveness for four years, and $350 billion in aid to state and local governments. The House still must approve the Senate version before it goes to President Biden for his signature. 

Speaking of the pandemic and states, tune in tomorrow for a State of the States conversation and discussion. The online event will focus on the lessons state budget officials have learned during the pandemic and the new, innovative strategies they are using to stabilize their economies. Colorado Governor Jared Polis will have a keynote conversation with TPC’s Kim Rueben. TPC’s Richard Auxier will moderate a panel discussion with Kentucky budget director John Nicks and Ohio budget director Kimberly Murnieks. Learn more and register here, the event begins at 1:30 on Tuesday, March 9. 

CPAs to IRS: Extend tax filing deadline by two months. The AICPA has an urgent request for the IRS and Treasury: They want the 2020 deadline for federal income tax payments and extension requests delayed until June 15. The group says a two-month reprieve is necessary because the tax filing season didn’t start until Feb, 12 and because the IRS has been burdened by various pandemic-related changes to tax law. AICPA also notes that many IRS employees still are working remotely and have limited access to certain tax data. Rettig has so far resisted delaying the filing deadline. As of Feb 26, the IRS has received about 45 million returns, about 24 percent fewer than the same time last year.

Washington State Senate passes a new capital gains tax. The bill passed by a narrow margin and heads to the state House for likely passage. The tax, effective for 2023, would generate about $550 million annually. The 7 percent tax rate would apply to the sale of stocks and bonds and personal property and businesses if gains exceed $250,000. Sales of  family-owned business that earn less than $10 million annually, homes, commercial real estate, retirement accounts, livestock, and other properties would be exempt. Opponents say the bill  is unconstitutional and vow a court challenge. Washington’s constitution bars a state personal income tax.  

A Missouri state senator proposes the largest income tax cut in state history.  Republican state Sen. Lincoln Hough wants to reduce the state’s top income tax rate in 2022 from an expected 5.3 percent to 4.8 percent. Hough's bill, not yet assigned to a committee, follows a 2018 legislation signed by Gov. Mike Parson that reduced the top rate from 5.8 percent to 5.4 percent in 2019 and subsequent reductions contingent on revenue growth.

For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at [email protected].