What about companies formed in 2023? I thought we had different deadlines than older companies. Does this pause affect all businesses the same way?

Companies formed in 2023 fall under the "existing entities" category, which originally had until January 1, 2025 to file their initial reports. Companies formed in 2024 have 90 days from formation to file. The enforcement pause affects all businesses subject to the CTA equally - regardless of when they were formed. However, it's important to note that the technical legal requirement still exists for all applicable businesses, even though there's no enforcement mechanism currently in place. My recommendation remains to prepare your information so you're ready when enforcement resumes, which it almost certainly will.

You didn't waste your time. If anything, you're ahead of the game. The database still exists and your information is properly recorded. When enforcement resumes (which most experts think it will), you won't have to scramble like everyone else.

I've never heard of the Taxpayer Advocate Service. Do they help with complicated situations involving multiple years and different income sources? Also, do they help negotiate payment plans or is that a separate process?

Yes, they absolutely help with complicated multi-year situations - that's actually their specialty. My case involved W2 income, freelance work, and some investment income across several years. They're particularly helpful when your case has special circumstances or when you've tried to resolve issues through normal IRS channels without success. The advocate can help with the entire process including setting up payment plans and exploring options like Offers in Compromise if you can't pay the full amount. They'll look at your financial situation holistically and recommend the best approach. They can even request holds on collection activities while you're working with them. To contact them, call 1-877-777-4778 or find your local office on the IRS website.

This is a really good point. My brother thought he'd owe thousands, but ended up getting about $1,500 back because his W2 withholding more than covered what he owed from his side gig. Don't assume you'll owe until you run the numbers!

Thanks, this is helpful! My relocation paperwork does mention a "tax gross-up" for some of the benefits, but not all of them. So for the ones that weren't grossed-up, I'll end up owing taxes on those out of pocket, right?

That's exactly right. For the benefits that weren't grossed-up, you'll need to pay taxes on that amount out of your own pocket. For example, if you received a $3,000 lump sum that wasn't grossed-up, you might owe roughly $750 in taxes (depending on your tax bracket) that comes out of your pocket. The ones that were grossed-up should be fine - the extra amount your employer added should cover the tax liability for those specific benefits. Just be prepared for your W-2 to look higher than you might expect, since it includes both your regular salary and all these additional taxable benefits.

I got that same warning last year but just ignored it. TurboTax throws up caution flags for any significant changes year-over-year. As long as your W-2 accurately reflects everything (including the relocation benefits), you're fine to proceed past that warning. It's just an automated check, not an actual problem with your return.

Thanks, that's reassuring but quick follow-up question - what if my brother ends up not filing at all? Would that mean we only claimed 80% of the policy (my 20% + parents 60%)? Would that cause issues?

If your brother doesn't file at all, that wouldn't necessarily create problems regarding the Premium Tax Credit. The IRS is primarily concerned with making sure no more than 100% of a policy is claimed. Claiming less than 100% might mean some of the credit goes unclaimed, but it's not a compliance issue. However, if your brother was required to file a tax return (based on his income and situation) and received advance premium tax credits, he actually must file a return to reconcile those credits even if he otherwise wouldn't be required to file. Failure to file in this case could result in him being ineligible for advance premium tax credits in future years.

Yes, CashApp Taxes (formerly Credit Karma Tax) does generate Form 8962 correctly including Part IV allocations, even though the user interface doesn't explicitly show this section. I was worried about this too, so I actually downloaded the PDF of my complete return after filing and checked - the allocation was there on the generated 8962.

Do you have the exact section in Pub 970 that says this? I'm looking at it now and can't find where it specifically says undergraduate only.

It's in the section about AOTC eligibility requirements. The publication states that the credit is available "for the first 4 years of postsecondary education" and then further clarifies that a student who has completed "the first 4 years of postsecondary education before the beginning of the tax year" isn't eligible. The key is in how they define "completed the first 4 years" - there's a part that explains that a student who has already completed an undergraduate degree program is considered to have completed their first 4 years of postsecondary education, regardless of how long it actually took. So by graduating with your bachelor's degree, you've "used up" your AOTC eligibility even though it only took 3 years.

Don't do it. The IRS systems are pretty good at catching this now. They get information from your school about what degree program you're in, and universities report whether you're an undergraduate or graduate student on the 1098-T form. It's not worth risking an audit and penalties over this.