Non-filers have until October 15th to register

State Treasurer Colleen Davis urges Delawareans not typically required to file federal income tax returns to watch their mail for a letter from the Internal Revenue Service (IRS) saying they may qualify for a federal Economic Impact Payment (EIP). The letter urges recipients to visit the special Non-Filers: Enter Payment Info tool on IRS.gov before the Oct. 15 deadline to register for a payment.

“According to the IRS, letters are going to 32,875 Delawareans who don’t have to file a return,” Davis said. “Though the federal government has already sent payments to almost 500,000 people in Delaware, I want to make sure everyone gets a payment who is entitled to.”

People can qualify for a payment, even if they don’t work or have no earned income, however, not everyone can use the online tool. The tool should be used for those who do not normally and are not planning to file a federal income tax return for 2019 for any reason including income less than $12,200 (or $24,000 if married filing jointly), no income at all, or homelessness. Others, including low and moderate-income workers and working families receiving benefits such as the Earned Income Tax Credit or Child Tax Credit, will need to file a regular return as soon as possible. The IRS will use their tax return information to determine and issue any EIP for which they are eligible.

Those using the Non-Filers tool can speed up the arrival of their payment by choosing direct deposit. Those who do not choose direct deposit receive a check. Two weeks registering, people can track the status of their payment using the Get My Payment tool on the IRS website.

To date, Delawareans have received a total $810,451,229 worth of EIP payments.

Returns must be filed by July 15th

According to the Internal Revenue Service (IRS), unclaimed income tax refunds from 2016 worth more than $6 million remain available to an estimated 5,600 taxpayers in Delaware who did not file a 2016 federal income tax return.

The law typically provides a period of three years for taxpayers to claim a tax refund, but that was extended to July 15th this year due to the coronavirus pandemic.

“Time is running out, so I urge every Delaware taxpayer who is due a refund from 2016 to file now,” said State Treasurer Colleen Davis. “There is no penalty for a late filing if a refund is due, but taxpayers lose the opportunity to claim their money if their returns are not filed by next week.”

Refunds of taxes withheld are not the only things people stand to lose by not filing. Many low- and moderate-income workers may be eligible for the Earned Income Tax Credit (EITC). For 2016, the credit was worth as much as $6,269.

Taxpayers can find current and past tax year forms, along with instructions, on the IRS Forms and Publications page, or by calling toll-free 800-TAX-FORM (800-829-3676).

Nationally, the IRS estimates more than $1.5 billion is available to approximately 1.4 million individual taxpayers who did not file a 2016 tax return. Refunds not claimed become the property of the U.S. Treasury.

View the state by state breakdown here.

NEW CASTLE (March 7, 2019) – The Department of Health and Social Services (DHSS) is urging working individuals and families in Delaware to meet with volunteer tax preparers at locations across the state to determine if they are eligible for the federal Earned Income Tax Credit (EITC) and to file a federal tax return by April 15 if they are.

In January, DHSS sent out notices to clients who might be eligible for the EITC, the single largest check that many working families receive each year. To be eligible, an individual or couple must have earned income from a job and meet other requirements. Income can come from salaries, wages, tips, commissions, royalties, self-employment net earnings, jury duty pay, union strike benefits, non-taxable combat pay or long-term disability benefits before the minimum retirement age.

“For thousands of working families and their children in Delaware, the Earned Income Tax Credit is a proven benefit, lifting many families out of poverty,” said DHSS Secretary Dr. Kara Odom Walker. “We urge individuals and families to meet with tax preparers across the state to help determine if they are eligible for this important tax credit and to file their tax returns.”

To qualify for EITC, for example, a single parent of two qualifying children must have earned income and adjusted gross income of less than $45,802 in 2018. For a married couple filing jointly with two qualifying children, the limit is less than $51,492. Other income requirements:
• A single parent with three or more children: $49,194 ($54,884 if married and filing jointly)
• A single parent with one child: $40,320 ($46,010 if married and filing jointly)
• Single, with no children: $15,270 ($20,950 if married and filing jointly)

The refundable tax credit means that tax filers are likely to get back more from the federal government than they pay in taxes, so they are in line for a significant refund. In Delaware last year, about 71,000 eligible workers and families received about $171 million through the Earned Income Tax Credit, with an average credit of $2,401. In the U.S., about 25 million eligible workers and families received about $63 billion through the EITC last year, with an average credit of $2,488.

“It is important to DHSS and our community partners to increase the number of Delaware working families who know about the Earned Income Tax Credit, as well as the number who apply for it,” said Ray Fitzgerald, director of DHSS’ Division of Social Services. “This is money that can make a real difference in the lives of so many people in Delaware and enhance the lives of their children.”

The list of Delaware Tax and Financial Services Campaign Sites open through April 15:

•  Claymont Library (drop off only): 400 Lenape Way, Claymont; 10 a.m.-4 p.m. Friday and Saturday
• Northeast State Service Center: 1624 Jessup St., Wilmington; 9 a.m.-4 p.m. Monday, Wednesday and Friday
• Woodlawn Library (Spanish speakers available): 2020 W. Ninth St., Wilmington; 3-8 p.m. Monday; 10 a.m.-3 p.m. Tuesday, Wednesday, Thursday and Saturday
• Route 9 Library and Innovation Center: 3022 New Castle Ave., New Castle; 10 a.m.-8 p.m. Monday and Tuesday; 10 a.m.-4 p.m. Friday
• Hudson State Service Center: 501 Ogletown Road, Newark; Noon-8 p.m. Monday; 9 a.m.-1 p.m. Tuesday and Friday; 9 a.m.-4 p.m. Wednesday, Thursday and Saturday
• Williams State Service Center: 805 River Road, Dover; noon-4 p.m. Monday, Wednesday and Thursday; 8 a.m.-4 p.m. Tuesday
• Goodwill of Delaware-Milford: 694 N. DuPont Highway, Milford; 1-7 p.m. Tuesday, Thursday and Friday; 9 a.m.-4 p.m. Saturday
• First State Community Action Agency-Georgetown (Spanish speakers available): 308 N. Railroad Ave., Georgetown; 9 a.m.-6 p.m. daily
• Free Taxes-$tand By Me Delaware (online self-prepared returns only): myfreetaxesde.org/

Fitzgerald said individuals and couples who plan to go to tax preparation sites need to bring these documents with them:

• Driver’s license or another form of photo ID
• Social Security cards (for yourself, spouse, children and other dependents listed on the tax return)
• W-2s, 1095s, 1098s and 1099s
• List of other income/expenses (for possible itemized deductions)
• Child care information (provider’s EIN number, address and receipts for amounts paid)
• Bank account information for direct deposit
• Copy of last year’s return if available

A growing body of research has found that the EITC increases incentives to work, stabilizes income, is linked to improvement in maternal and infant health, leads to better performance by children in school, and increases work effort and earnings when children reach adulthood. The IRS estimates that 20 percent to 25 percent of qualifying workers do not receive the tax credit because they do not file a federal return to claim it.

In Delaware, volunteers are needed at tax sites. Those who are interested can go to www.nehemiahgateway.org to sign up.

The Delaware Division of Revenue would like to alert taxpayers to a new and growing scam involving fraudulent tax refunds being deposited into real taxpayer bank accounts. After the money is deposited, the crooks use various tactics to con taxpayers into turning over those funds.

How does it work? Thieves are using schemes, including phishing, to steal client data from tax professionals. They then use that data to file fraudulent tax returns, and use the taxpayers’ real bank accounts to deposit those tax refunds. Finally, the thieves pose as the IRS or other law enforcement representatives, call attention to the error, and ask taxpayers to return the money to them.

If you ever receive a refund that you are not expecting, call the Division of Revenue for more information. You can also check out the Taxpayer Guide to Identity Theft at IRS.gov to learn how to protect yourself from tax scams, where you can also find help with returning an erroneous refund.

The IRS warns that versions of this new scam may continue to evolve. If you think you’re being scammed, call the Delaware Division of Revenue’s Fraud Team at (302) 856-5358 for assistance.

Small business identity theft is a big business for identity thieves. Just like individuals, businesses may have their identities stolen and their sensitive information used to open credit card accounts or file fraudulent tax returns seeking bogus refunds. To mark “National Tax Security Awareness Week,” the Delaware Division of Revenue, along with the IRS and the nation’s tax industry have joined together to warn small businesses to be on-guard against a growing wave of identity theft against businesses and employers.

In the past year, the Internal Revenue Service noted a sharp increase in the number of fraudulent Forms 1120, 1120S and 1041 as well as Schedules K-1. The fraudulent filings include forms filed relating to partnerships, estates and trusts. Identity thieves are displaying a sophisticated knowledge of the tax code and industry filing practices as they attempt to obtain valuable data to enable them to file fraudulent returns.

Identity thieves have long made use of stolen Employer Identification Numbers (EINs) to create fake Forms W-2 that they file with fraudulent individual tax returns seeking refunds. Fraudsters also used EINs to open new lines of credit or obtain credit cards. Now, they are using company names and EINs to file fraudulent returns for the businesses themselves.

As with fraudulent individual returns, there are certain signs that may indicate identity theft. Those filing returns for corporations, partnerships, estates or trusts should be alert to potential identity theft and contact the IRS if they experience any of these issues:

• Extension to file requests are rejected because a return with the Employer Identification Number or Social Security number is already on file;
• An e-filed return is rejected because a duplicate EIN/SSN is already on file with the IRS;
• An unexpected receipt of a tax transcript or IRS notice that doesn’t correspond to anything submitted by the filer;
• Failure to receive expected and routine correspondence from the IRS because the thief has changed the taxpayer’s address.

New Procedures to Protect Businesses in 2018

The Division of Revenue, the IRS, and software providers share certain data points from returns, including business returns, which help identify a suspicious filing. Delaware and the IRS are asking that businesses and tax practitioners provide additional information that will help verify the legitimacy of the tax returns they file.

For 2018, the “know your customer” procedures that are being put in place include the following questions:

• Authorized signer – Confirm the name and SSN of the company executive authorized to sign the corporate tax return;
• Payment history – were estimated tax payments made? If yes, when were they made, how were they made, and how much was paid?
• Parent company information – is there a parent company? If yes, what is the name of the parent company?
• Deduction information – Provide additional information based on deductions claimed;
• Filing history – has the business filed Form(s) 940, 941 or other business-related tax forms?

Individuals operating as sole proprietorships who file Schedule C with Form 1040 and partnerships that file Schedule K-1 with Form 1065 also will be asked to provide additional information items, such as a driver’s license number. Providing this information will help Delaware and the IRS identify suspicious business-related returns.

For small businesses looking for a place to start on security, the National Institute of Standards and Technology (NIST) has produced Small Business Information Security: The Fundamentals. NIST is the branch of the U.S. Commerce Department that sets information security frameworks followed by federal agencies. The United States Computer Emergency Readiness Team (US-CERT) has created Resources for Small and Midsize Businesses.

Take the steps recommended by cyber experts to protect your business, and visit the Identity Protection: Prevention, Detection and Victim Assistance for more information about business-related identity theft.