Officially now the longest government shutdown in history, hundreds of thousands of federal employees are furloughed—some are required to work, some are not— but none are receiving paychecks.
For some, the timing couldn’t be worse. Tax season is upon us and many American workers are left wondering what the government shutdown means in regard to their 2018 tax returns or tax status in general. If you or your HR department find yourselves inundated with questions from curious employees, be sure to arm yourself with the most recent information. Here’s what to tell employees during the government shutdown.
Do I have to pay federal income tax during the shutdown?
Yes. Despite the government shutdown, employees still need to pay income tax. Most likely this is being done for you automatically by the company’s HR department. If you’re an independent contractor or self-employed, be sure to set aside an appropriate amount to cover your quarterly tax requirement. We all still have to give our share to Uncle Sam.
Is the IRS open?
Yes, federal law requires the IRS to remain open during the shutdown, although the actual number of employees on-hand is less than normal. Around 57% of the IRS staff is expected to report for work during tax season, and of those 46,000 employees only 809 are getting paid (because their area of operations is funded by user fees).
Do I have to wait for the government to reopen before filing my 2018 tax return?
No. As soon as you’ve received your paperwork, like W-2s and 1099s, complete the necessary forms to file your tax returns. If you discover you owe money, go ahead and send a check. Don’t wait for the shutdown to end or else you might be penalized if it goes past April 15.
Will I receive my tax return?
Yes, although it may take a bit longer for you to receive payment than it has in past years. Delays are expected due to the reduced IRS staff and last year’s Tax Cuts and Jobs Act, which implemented the most significant tax overhaul we’ve witnessed in decades. File electronically if possible—paper returns won’t be processed until the shutdown is over.
What if I have a question about my tax return?
Don’t call the IRS. Their automated hotline isn’t operational during the shutdown. Instead, use their website and online tools for help, or seek guidance from a tax professional. Keep in mind that some tax professionals are still learning the nuances of the new tax codes, so you might want to give them some additional time to work on your return.
What if I’m being audited?
You’ll have a temporary excuse to pause any actions you’re taking in response to the audit as the IRS can’t conduct audits during a government shutdown. But it’s just a temporary break. Rest assured the IRS will find you once the shutdown is over, so you may as well gather your documentation in the meantime.
To sum up, yes you have to continue paying federal taxes even though the government is shut down. If you expect a return, be patient. The reduced staff at the IRS has a lot on their plate this year and they’re not getting paid to deal with it all. If you owe money, pay it right away to avoid any additional fines.
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