2013 New Year Change & Practice Update Seminar • October 2013 • Presented by • Leonore Heavey, Barbara Reeves, and Bobbie Swafford • Louisiana Department of Revenue
Disclaimers • This presentation is “informal advice” as contemplated by Louisiana Administrative Code 61:III.101.D.3, which provides that informal advice does not have the force and effect of law and is not binding on the Department, the public, or the individual seeking advice. Informal advice will have no effect on an audit • Any opinions expressed are those of the presenters
DOMA • IRS Revenue Ruling 2013-17 requires same sex couples who were married in a state that recognizes same sex marriage to file married filing joint or married filing separately • LDR response—RIB 13-024 • Current advice: • File your clients’ Louisiana tax returns as you would have prior to the IRS ruling • See page 21 & What’s New section of the Resident return
Non Refundable Child Care Credit • Child Care Credit Carried Forward From 2009 Through 2012 – Line 12C – • The child care tax credit for taxpayers whose federal adjusted gross income exceeds $25,000 is not refundable. Unused credit amounts can be used over the next four years. • For the 2013 tax year, credits carried forward from 2009 through 2012 can be applied on Line 12C. • Any remaining child care credit from 2008 has prescribed can not be applied to the 2013 tax liability. (R.S. 47:297.4)
School Readiness Credit Carryovers • School Readiness Credit carried forward from 2009 through 2012 – Line 12E – • The school readiness credit for taxpayers whose federal adjusted gross income exceeds $25,000 may not be refunded and any unused credit amounts can be used over the next four years. • For the 2013 tax year, credits from 2009 through 2012 can be applied on Line 12E. (R.S. 47:6104) • Any remaining credit from 2008 has prescribed and cannot be used on the 2013 tax return
School Readiness Credit for Child Care Directors and Staff • Refundable credit for eligible child care directors and staff • Based on certain attained qualifications • 2013 credit amounts based on CPI-U adjustment:
Sugar Cane Trailer Conversion Credit • The refundable credit for conversions made in 2013 is limited to $6,500 per trailer • 2013 is the last year the credit can be earned • No tax credit allowed for costs paid on and after January 1, 2014 • See RIB 09-026 for more information and for each year’s per trailer credit cap • R.S. 47:6029
Changes to Solar Energy Systems Credit • Act No. 428 of the 2013 Regular Session of the Louisiana Legislature made numerous changes to the tax credit provided in La. R.S. 47:6030including: • Wind systems no longer qualify • Credit no longer available for installations at residential apartment complexes • Significant differences between eligibility for leased versus purchased systems • All system components purchased on or after July 1, 2013 must be compliant with the American Recovery and Reinvestment Act of 2009-- “Buy American” (See RIB 13-013) • Credit phases out with a final sunset of January 1, 2018 • See RIB 13-026, Solar Energy Systems Tax Credit, for more information about the changes
Alternative Fuel Vehicle Credit Changes • Act 219 of 2013 specifies that flex fuel vehicles do not qualify • Act 427 of 2013 changed the definition of “alternative fuel” to “natural gas, liquefied petroleum gas, and any nonethanol based advanced biofuel” • Removes ethanol as alternative fuel • Retains electricity, but only if the vehicle • (a) has at least four wheels; (b) is manufactured primarily for use on public streets, roads, and highways and is able to attain a maximum speed of at least fifty five miles per hour; and (c) is propelled by an electric motor which draws electricity from a battery which has a capacity of not less than four kilowatt hours and is capable of being recharged from an external source of electricity • Low speed electric vehicles are no longer eligible • See RIB 13-023 for more information
Federal Income Tax Deduction • Two new Affordable Care Act taxes took effect in 2013 • 1. Net Investment Income Tax • Will be added to federal taxes paid for purposes of determining the FIT deduction because it is a tax on net income • 2. Additional Medicare Tax • Will NOT be added to federal taxes paid for purposes of determining the FIT deduction
New Additional Donation • SNAP Fraud and Abuse Detection & Prevention Fund, Line 41, page 5 (“Amount Due Louisiana” section) • For tax years beginning on and after January 1, 2013 • The monies in the fund may be appropriated by the legislature only to enhance fraud and abuse detection and prevention activities related to the Supplemental Nutrition Assistance Program. • Created by Act 635 of 2012
Schedule D—Donation of Refund • Line 4—SNAP Fraud and Abuse Detection and Prevention Fund–This fund provides fraud and abuse detection and prevention activities related to the Supplemental Nutritional Assistance Program. (R.S. 47:120.39) • Line 7—Checkoffdonation for the Louisiana Prostate Cancer Trust Fund has been changed to the Louisiana Cancer Trust Fund • Line 12—Louisiana Bicentennial and Battle of New Orleans Commissions. Current donations will be distributed to the Battle of New Orleans Commission; the Bicentennial Commission has ended by operation of law. • Line 22—Decorative Lighting on the Crescent City Connection (Act 194 of the 2013 Regular Legislative Session) • Line 23—Operation and Maintenance of the New Orleans Ferries (Act 194 of the 2013 Regular Legislative Session) • Line 24—Louisiana National Guard Honor Guard for Military Funerals (Act 392 of the 2013 Regular Legislative Session) • Line 25—Bastion Community of Resilience. Taxpayers may donate all or part of their refund for the development of innovative housing for recent war veterans and their families.
Refund Options • Act 818 of 2012—For tax years 2013, 2014 and 2015 taxpayers may choose among 3 options • Paper check • MyRefund card • Direct deposit to bank account • Default is MyRefund card. • Taxpayers will receive a MyRefund card if: • No refund option chosen • Direct deposit account number is incomplete or unreadable
Refund Reissue Notices • Refund reissue notices--“blue letter” • For refund cards issued in 2012 that have not been activated, and • Un-cashed checks issued in 2012, • Refunds for taxpayers who did not respond to LDR by October 18, 2013 will be turned over to Unclaimed Property
What’s New for 2013—Corporate, Composite partnership, and Sales & use Tax
Corporate Income Tax • No short form (dormant corporations and non-profits with UBTI will file the CIFT-620) • Schedule G - Reconciliation of Federal and Louisiana Net Income: • Line 2d has been changed to require the reporting of Louisiana depletion in excess of federal depletion. • Line 2e has been changed to require the reporting of expenses not deducted on the federal return due to Internal Revenue Code Section 280C. • Line 2f has been changed to report subtractions from federal net income other than those reported on lines 2a through 2e. • Lines 2d through 2f were previously blank, allowing the reporting of subtraction items other than those reported on lines 2a through 2c.
Corporate Income Tax • Non Refundable Credits - Schedule NRC: Dedicated Research - Code 220 - This credit has been deleted from the return. • Tax Credit changes (see Individual Income Tax) • Solar energy systems, RIB 13-013 & RIB 13-026 • Alternative fuel vehicle, RIB 13-023 • Sugar cane trailer conversion, RIB 09-026
Corporate Tax Incentive Changes • Changes were made to several tax incentive programs administered by other state agencies. Contact the certifying agency to determine if your client is impacted by these program changes. • Louisiana Economic Development (LED) • Research & Development Credit • Motion Picture Investor Credit • Enterprise Zone Credit/Rebate • Ports Investor Credit • State Historic Preservation Office (CRT) • Commercial Historic Rehabilitation Credit (RIB 13-022)
Composite Partnership Return • Electronic only for 2013 tax year Via MEF • Nonresident individual partners only • Resident partners cannot be included • No payments will be made by the partnership on behalf of resident partners • Consider adjusting estimated payments • Will now include tax credits earned by the partnership • Extensions for the composite return will also be electronic only
Sales and Use Tax • Change to Vendor’s Compensation: • Rate reduced from 1.1% to 0.935% • See RIB 13-020 • Taxpayers must use current form to properly calculate the correct vendor’s compensation amount • Use R-1029 (7/13) from July 2013 forward • Use R-1029 (7/12) for tax periods between July 2012 to June 2013 • Using the wrong return will cause processing delays and may require you to refile using the correct return • If the July 2013 return was filed before the new return was available, if you pay any additional tax resulting from the decrease in vendor’s compensation, interest and penalty will be waived
Sales and Use Tax—Exemptions • Act 271 [R.S. 47:305(D)(2)(a)] expands the exemption for patients and staff of hospitals to exempt the sale of meals furnished to staff and residents of nursing homes, adult residential care providers, and continuing care retirement communities • Effective June 13, 2013, however the provisions of the Act are retroactive. • Other legislative changes—go to http://revenue.louisiana.gov/ click on “Publications” tab and select “Legislative Summaries” • Legislative Summaries are available for 1996-2013
Sales and Use Tax—Exemption Certificates • As of August 1, 2013, the state and local sales and use tax exemption certificate for sales occurring at events sponsored by nonprofit organizations may be obtained annually from LDR instead of on a per event basis • Beginning January 1, 2014, direct pay, sale for resale, and manufacturing machinery and equipment sales tax exemption certificates will be renewed automatically unless • LDR determines the taxpayer no longer qualifies for the exemption, or • Taxpayer has not met its filing and payment obligations
Use Tax Enforcement Authority • Act 425 of 2013 created R.S. 47:302(U): • Collection of consumer use tax. It is the duty of the secretary of the Department of Revenue to collect all taxes imposed pursuant to this Chapter and Chapters 2-A and 2-B of this Subtitle which may be due upon the sale by a remote seller of tangible personal property or services in Louisiana. The secretary is authorized and directed to employ all means available to ensure the collection of the tax in an equitable, efficient, and effective manner. • If you do not already include a question regarding online or catalog purchases on which your clients paid no sales tax, please add such a question.
Use Tax Enforcement Activities • LDR Discovery Unit is utilizing third party data to assist with use tax compliance • Pilot—Tobacco Excise and Use Tax notices • Mailed late September 2013 • Covers periods 2003-2009 • Letter includes print out of all tobacco products purchased from out of state vendor where taxes not remitted by vendor or taxpayer, including date, product, quantity and purchase price
Fiduciary and Partnership Information Extensions • Please use appropriate form • Fiduciary—R-6466 (prior to 2012, R-6466 was for both returns) • Partnership—R6463 • As these returns become electronic, the extensions will become electronic • Look for fiduciary to become electronic for 2014 returns filed in 2015
Amnesty Basics • Act 421 of the 2013 Louisiana Legislature instituted a three-year statewide state tax amnesty program • The dates for Amnesty 2013: • Monday, September 23 – Friday, November 22 • The deal for Amnesty 2013: Pay 100% of the tax, all fees and ½ of the interest owed & LDR will waive 100% of the penalty and the other ½ interest • In 2014, no penalty waiver and only 15% of interest will be waived • In 2015, no penalty waiver and only 10% of interest will be waived • The website: http://ldrtaxamnesty.com/ • The phone number: 866-782-9241
Amnesty Tips • If your client only owes penalty, they must apply via the website. Penalties will not be waived without an application. • If a taxpayer cannot afford to take advantage of amnesty for all eligible periods, tax periods can be deselected on the Amnesty website • No installment agreements accepted for amnesty unless all payments received by LDR by November 22, 2013.
No Amnesty Invitation? • Invitations were mailed to most recent address LDR had on file. Call amnesty phone number to obtain letter ID number then apply via the amnesty website • Decedents did not receive an amnesty invitation. Representatives may walk in or call to determine payoff amount. Proof of representation is required. • Taxpayers with taxes under field audit and litigation were mailed letters with contact information. Call to determine payoff amount.
Amnesty LDR Walk-in SiteAlexandria • 2nd Floor, Rapides Parish Courthouse 701 Murray Street Alexandria, Louisiana 71301 • 8:00 a.m. – 4:00 p.m. on the following days: • October1, 3, 8, 10, 17, 18, 22, 24, 29, and 31 • November 5, 6, 7, 12, 13, 14, 15, 18, 19, 20, 21, and 22
Amnesty LDR Walk-in SiteLafayette—Site I • Representative Vincent Pierre 800 W. Congress St., Suite A Lafayette, Louisiana 70501 • 9:00AM-3:00PM (This office opens at 9:00a.m. and closes from 12:00 to 1:00pm for lunch) • October 1-2, 7-9, 14-16, 21-23, 28-30 • November 5-7, 12-15, 18-22
Amnesty LDR walk-in siteLafayette—Site II • Department of Children and Family Services 825 KalisteSaloom Rd. Brandywine Complex Bldg 6, Suite 100 Lafayette Louisiana 70501 • 8:00AM- 3:00AM • October 1-4, 8-11, 15-18, 22-25, 29-31 • November 1, 5-8, 12-15, 18-22
Amnesty LDR Walk-in SiteLake Charles—Site I • Representative A.B. Franklin 2808 East Broad Street Lake Charles, Louisiana 70615 • 8:00 AM-4:00 PM (This office closes from 12:00-1:00 PM for lunch) • October 1-3, 8-10, 15-16, 22-23, 29-30 • November 5-7, 12-15, 18-22
Amnesty LDR Walk-in SiteLake Charles—Site II • Senator Ronnie Johns 1011 Lakeshore Dr., Suite 515 Lake Charles, Louisiana 70601 • 8:30am - 4:00pm • (This office opens at 8:30a.m. and closes from 12:00pm to 1:00pm for lunch) • October 1-3, 8-10, 15-16, 22-23, 29-30 • November 5-7, 12-15, 18-22
Amnesty LDR Walk-in SiteMonroe • Monroe State Office Building Room #242, 2nd Floor Conference Room 122 St John Street Monroe, Louisiana 71201 • 8:00 a.m. – 4:00 p.m. on the following days: • October 2, 3, 9, 10, 16, 17, 23, 24, 30, and 31 • November 5, 6, 7, 12, 13, 14, 15, 18, 19, 20, 21, and 22
Amnesty LDR Walk-in SiteNew Orleans • Louisiana Department of Revenue, Southeast District (504-568-5233) 1450 Poydras Street Suite 800 New Orleans, Louisiana 70112 • 8:00 AM – 4:00 PM (This location closes from 12:00 p.m. to 1:00 p.m. for lunch.) • September 23-November 22, 2013
Amnesty LDR Walk-in Site Shreveport • Shreveport State Office Building Conference (Room located in Basement) 1525 Fairfield Avenue Shreveport, LA 71101 • 8:00 a.m. – 4:00 p.m. on the following days: • October 2, 3, 9, 10, 16, 17, 23, 24, 30 and 31 • November 5, 6, 7, 12, 13, 14, 18, 19, 20, 21 and 22
Individual Income Tax • File electronically • E-Services help line (225)-219-2490 or -2488. • Refund turnaround – • 12-16 weeks for paper • 21 days for e-filed
Individual Income Tax Modern E-filing (MEF) will allow for the submission of PDF files with e-filed returns. Return attachments can also still be submitted via E-Fax number: • (225) 231-6221 Include taxpayer’s name, account number and tax filing period on the top of the first page.
Tips to Remember • Carefully check social security numbers. • Be sure that mailing addresses are kept up to date. • When entering the mailing address, be sure it matches the Postal Service information. • If the address doesn’t match perfectly, there will be processing delays.
Address Changes • Taxpayers must ensure that their mailing addresses are up to date • Failure to update a changed mailing address can result in delayed income tax refunds and correspondence • Please update your address with the US Postal Service. LDR does monthly updates. • You can change your address on the LDR website:www.revenue.louisiana.gov/AddressChange • Businesses can add or change addresses in LaTap using the edit feature.
Common Filing Delays • Name issues --Always file with the same names (first, middle, last) in the same order each year. • Math errors. • Conflicts with third party data or compliance reviews. • Difference in estimated payments and credit carry forwards reported compared to LDR records.
Common Filing Delays • “Other” claimed on Schedule E, F or G. • Large Refunds. • Amended Returns completed incorrectly. • Tip--Amended returns should be completed as if no other return was ever filed for the period.
Paper Return Tips • Use the correct year form • Submit all pages of the tax returneven if left blank • Supply all essential information and complete the entire return • All taxpayers must sign the return as well as a third party preparer • Be sure that your printer ink is working properly and the return is easily read.
Paper Return Tips • Don’t mail checks without a tax return or appropriate voucher. • Make sure to include the Social Security Number(s) or the account number and tax year on all payments and correspondence. • Be sure to make the check payable to the Louisiana Department of Revenue.
Paper Return Tips • Returns with a balance due go to a different PO Box than refund returns • A return for which a payment is due should be mailed to: P.O. Box 3550, Baton Rouge, LA 70821-3550. • All other individual income tax returns should be mailed to: P.O. Box 3440, Baton Rouge, LA 70821-3440.
Paper Return Tips • If requesting a direct deposit of a refund, carefully check the bank account and routing numbers. • Sending your return via certified mail or courier will not speed processing of your return and will more likely delay your refund.