Tax Update for January 2016
Here's the January 2016 issue of Tax Update—our newsletter for the business community. This edition features articles on withholding tips for employers, FAQs for using Taxpayer Access Point (TAP), security enhancements for filing income taxes, and new Web pages that can help you!
Filing your Form 967, W-2s, and 1099s by the last day of February (Feb. 29, 2016, for the 2015 tax filing year) not only saves your business from being charged a penalty, but also helps your employees get their refunds faster and speeds up our return processing.
The Tax Commission uses employer W-2s as another piece of information when processing income tax refunds. For example, if we have a problem reading an employee W-2 attached to an income tax return, we'll compare it to the employer copy. But if we haven't received the employer copy, we'll write to the taxpayer, which further delays the refund.
We receive a significant amount of 967s and employer W-2s that have incorrect federal Employer Identification Numbers (EIN) or Tax Commission account/permit numbers. We also see returns that have the Idaho Department of Labor number instead of our account/permit number or no Idaho number at all. Some employers send us only W-2s with no 967.
Another delay in tax processing is due to reconciliation problems. We often see income tax withholding payments made throughout the year that don't match the amount reported on the 967.
Common W-2 errors to avoid:
- EIN doesn't match our records
- Employer state ID number on the W-2 doesn't match the Idaho issued Tax Commission account/permit number for the business
- Wages and/or withholding for Idaho aren't filled in
- A state identifier isn't used
- A list of W-2 information is provided instead of the actual W-2s
- Multiple copies of the same W-2s are sent (we only need one for each employee)
- W-2s with Idaho withholding aren't included with the 967
Common 967 errors to avoid:
- The 967 is sent without W-2s or 1099s
- The tax year on the W-2s doesn't match the tax year on the 967
- The 967 has an incorrect or unapproved format
- Scan line information is incorrect, illegible, or missing
- The filing frequency is incorrect
1099 filing tips:
- If your 1099s have Idaho withholding, include them with the 967
- If your 1099s don't have Idaho withholding but they're required to be filed with the Tax Commission, you can either upload them through our Taxpayer Access Point (TAP) or send them to us with Form 96
For more information, see our Income Tax Withholding page.
Typically, the third top reason people call us is to get help with filing and paying taxes through our Taxpayer Access Point (TAP) system. TAP is the secure online portal for managing your account and doing business with the Tax Commission.
To help our TAP clients, we've added, expanded, and reorganized our TAP Help FAQs, making them more user-friendly. In fact, our Taxpayer Services employees use these FAQs to answer most of the public's questions about what they can do and how they can navigate through TAP.
For example, did you know you can't change your login username? That's one answer you'll find under the "My account" category. Did you know you can store your banking information in TAP? The details are under the "banking" category. Our "filing returns" and "payment" categories include information on how to correct filing mistakes and fix payment errors.
Other TAP FAQs cover questions on setting up payment plans, registering, security measures, and uploading files.
Businesses can use TAP to pay their taxes and file most permit-based returns, as well as keep their account information updated, upload W-2s and 1099s, and much more. TAP has more than 70,000 active accounts and continues to grow.
With the increase in tax refund fraud and identity theft, the Tax Commission has implemented some safeguards to protect you and your identity when you file your 2015 individual income taxes this year.
Income Tax Refund Returns
We may ask you to verify that you filed your return or to verify your identity before we issue your income tax refund. If this happens, you'll receive one of the following letters from us:
- Return verification letter: If you receive this letter, you'll be asked to verify whether you filed a return by going online and entering some information that we provide in the letter. If you're unable to go online, you can mail us your verification.
- Identity verification letter: If you receive this letter, you'll be asked to verify your identity by taking an online quiz. You'll be required to answer questions that only you should know the answers to. If you're unable to do this online, you can mail or bring us copies of documents to prove your identity.
If you're e-filing this year, you'll be asked for extra information to combat stolen-identity tax fraud. If you have a state-issued driver's license or identification card, you'll be asked to provide information from it when you file. Although your return won't be rejected if you don't, providing this information will help your return process faster.
For more information about our security efforts, please visit our new Security Web page.
- The 2015 Idaho income tax return deadline is Monday, April 18, 2016. This follows the federal due date.
- You can start e-filing your 2015 tax return on Jan. 19, 2016. E-filing your return and choosing direct deposit is your fastest option for getting your refund.
We've added new Web pages, enhancements, and reports to our website. Below are some of the highlights of our efforts to better serve businesses.
- Tax Fraud page and our online Fraud Referral Form. The page explains tax fraud and provides a form taxpayers can use to report tax violations.
- Successor's Liability Clearance Letter. This page has important information about lowering the risk of a surprise tax debt when buying an existing business.
- Repair Shops. The page provides updated sales tax information for repair shops and covers labor, fabrication, and repairs. It replaces our Repair Shops brochure.
- Aircraft. This page—in partnership with the Idaho Transportation Department's Division of Aeronautics—provides information about registration and taxes for the sale, lease, or purchase of aircraft in Idaho.
- Claim of Right Income Repayments. When taxpayers are required to pay back money they included in taxable income in a previous year, they may be able to claim a credit or deduction on their Idaho return. The Web page shows taxpayers how.
We updated the following fuel documents and Web pages as a result of the recent fuels tax rate increase and other fuel changes made by the Legislature:
- Product Code List (for use with Form 1450) (document)
- FT-2, Retail or Bulk Sales of Gasoline and Diesel Fuel (document)
- FT-3 Fuels Tax Refunds for Gas and Diesel Consumers (document)
- Fuel Tax Bonding Options (new Web page about bonding requirements for fuel distributors; formerly a letter)
- IFTA Licensees – Claiming a Refund (Web page)
- Fuel purchased on Idaho Indian reservations (Web page)
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