USA: The IRS Provides Answers Regarding Coronavirus SLFR Funds

USA: The IRS Provides Answers Regarding Coronavirus SLFR Funds

The Internal Revenue Service (IRS), the revenue service of the US federal government, has recently issued answers to states and local governments on taxability and reporting of payments regarding Coronavirus State and Local Fiscal Recovery Funds (SLFR Funds).

The recovery funds allow eligible states and local governments a substantial infusion of resources to meet pandemic response needs. The IRS has released a set of FAQs that provide detail and insight into the tax consequences for individual recipients and the reporting requirements for the states and local governments and employers, as applicable.

Many recipients of the recovery funds will have to report certain payments as income tax and might owe tax depending on the reason for the payment. The FAQs also cover answers regarding payments used to assist with childcare and other basic needs.

In addition, states and local government administrators will find information regarding their filing requirements, this includes when Forms 1099 need to be filed.

The FAQs have been published to provide taxpayers and tax professionals with general information as quickly and efficiently as possible.

If you are interested in doing business in the United States, find out everything you need to know about payroll, tax, social security, employee benefits, work permits, employment law and more in the activpayroll Guide to Doing Business in the United States. This is available as a free PDF to download.