The COVID-19 disease has drastically changed how we do business. With an unprecedented amount of American families and businesses being affected information is pouring in rapidly. Here are just a few highlights of some of the recent legislation that may help you and your business.
IRS People First Initiative
April 15th tax deadline automatically extended until July 15th, 2020.
First quarter 2020 estimated tax payment and tax payments due on April 15th extended until July 15, 2020 with no further penalties.
Existing Installment Agreement – payments suspended between 4/01/20 and 7/15/20. Interest will accrue. No default on installment agreements will be issued.
Pending Offer In Compromise – documents not due until 7/15/20.
Liens and levies suspended until 7/15/20.
New collection accounts will not be forwarded for action until after 7/15/20.
Audits – new audits on hold until after 7/15/20. In-person meetings on current audits on hold until after 7/15/20. The auditor may choose to work the audit remotely at their discretion. Document request notices should be completed as scheduled.
Families First Coronavirus Response Act
Requires employers to provide paid sick time to employees who are unable to work due to the effects of COVID-19. Employers with fewer than 500 employees must pay based on the below –
$511 per day and $5,110 in aggregate for paid sick used for those with COVID-19 symptoms or are required to self-isolate
$100 per day and $2,000 in aggregate for paid sick time used by en employee to care for an impacted family member
This goes into effect on April 1st and expires December 31, 2020.
Allows for a credit against payroll taxes for 100% of employer paid qualified sick leaves wages up to $200 per day per employee and $10,000 for all calendar quarters.
Individual Rebates – Advance refund on your 2019 tax filing based on your 2018 adjusted gross income (or 2019 if filed) as described below –
Individual – $1,200 each and $500 per child (begins to phase out at $75,000 and completely gone at $99,000)
Married filing joint – $2,400 and $500 per child (begins to phase out at $150,000 and completely gone at $198,000
Head of Household – $1,200 and $500 per child (begins to phase out at $112,500 and completely gone at $146,500
This will be direct deposited into your bank account or a check will be mailed to the last address the IRS has on file.
Small Business Payroll Protection Program – SBA 7(a) loan that can be partially forgiven if used to cover payroll, rent and operating costs. You may be eligible to borrow 250 percent of your average monthly payroll expenses, up to $10 million. Any SBA lending institution is qualified to help you through this process. If you need a lending referral, please contact our office.
SBA disaster relief loans – 12 month deferred payments offered. Go to this link to apply –https://covid19relief.sba.gov/#/
Current SBA loan – 6 month deferment on payments. Contact your current lending institution and request a payment deferment.
Refundable tax credit – payroll tax credit for up to 50% of wages paid for employers whose operations have had to completely or partially shut down due to government action during COVID-19 crisis. Wages of employees furloughed or reduced are eligible. For employers with 100 or fewer employees, all employee wages are eligible regardless if furloughed and credit is applied to the first $10,000 of compensation.
Delay of payroll tax deposits – employer portion of social security and medicare during 2020 can be paid in installments with half paid on 12/31/2021 and the remainder on 12/31/2022. This does not apply if Payroll Protection loan was obtained.
Net operating losses – for tax years beginning prior to 2021, 100% of the net operating losses can be taken and the carry-back period has been changed to 5 years.
Early Withdrawal Penalty Waived during 2020 for Coronavirus related distributions.