Tax Tips for Higher Education
Employee Retention Credit – Expanded – Extended
ISSUE:
The “Taxpayer Certainty and Disaster Tax Relief Act of 2020 – as part of the Consolidated Appropriations Action, 2021 (CAA) – (enacted December 27, 2020) amended and extended the Employee Retention Credit (ERC) that was included in the CARES Act.
SITUATION:
Denali Christian College (DCC) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii). They are required to file Form 990 annually.
The Accounting Team at DCC asked us to provide them with a brief description of the ERC and the changes made with the new tax legislation. Here goes…
2021 Mileage Rates
ISSUE:
The Internal Revenue Service has released the standard mileage rates for the coming year.
SITUATION:
Idaho Theological Seminary (ITS) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii). They are not required to file Form 990 annually.
ITS’ Controller called to ask a common, yearly question for this time of year:
“Has the IRS published the 2021 standard mileage rates yet?”
“As a matter of fact, yes they have,” we answered. “The rates are as follows:
Read More . . .
HEERF Student Grants Reported on Form 1098-T?
Through the Summer and Fall of 2020, the apparent IRS guidance was that student grants under the CARES Act Section 18004, Higher Education Emergency Relief Funds (HEERF), would be required to be reported on your 2020 Form 1098-T’s sent to students in January 2021. The grants, it seemed, would only be reported in Form 1098-T, Box 5. The IRS (on December 14, 2020) issued guidance that these payments would NOT be required to be included on the 2020 Form 1098-T – Hallelujah!
2020 Form 990-T Draft Instructions Released
ISSUE:
As we mentioned in September, the 2020 Form 990-T (draft) is organized differently from what we have seen annually since 1951. Now, the IRS has released the draft instructions for the 2020 Form 990-T.
SITUATION:
Denali Christian College (DCC) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii). They are required to file Form 990 annually.
DCC’s CFO to ask if we’d heard any updates with regard to the draft 2020 Form 990-T and the new Form 990-T, Schedule A.
We told her that the IRS has recently released the draft 2020 Form 990-T instructions. The “What’s New” section of the instructions reminds filers that “Mandatory electronic filing of the 2020 Form 990-T will begin in February 2021.” In addition, the draft alerts filers that the Form 990-T has been “redesigned for tax year 2020.” The instructions are 34 pages long and include three appendices (with Appendix A, Definitions). Also, there is a set of “Reminders” on page 2 that should be closely reviewed.
The draft 2020 Form 990-T instructions can be found at . . .
HEERF Reporting: A “Submitter” and “Editor(s)”
ISSUE:
The Department of Education has begun to provide guidelines on Higher Education Emergency Relief Fund (“HEERF” – CARES Act Section 18004) Annual Reporting – which differs from the quarterly reporting that is currently ongoing.
SITUATION:
Denali Christian College (DCC) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii). They are required to file Form 990 annually.
DCC received allocations under CARES Act Section 18004(a)(1) – Student and Institutional portions and Section 18004(a)(3). Their CFO called us to clarify an ED “edict” that all schools required to participate in the upcoming HEERF annual reporting send ED an email with the names of their appointed “Submitter” and “Editor(s)” by Friday, December 4, 2020.
“What are the definitions of a ‘submitter’ and an ‘editor’ that we have to report by this Friday?”