All the coronavirus news you can stand to digest (or we can deliver). This information may not be relied on as tax advice. You should consult with your advisor(s) and/or the jurisdiction.
Always at the top: Tracking COVID-19
A lawsuit has been filed against the Administrator of the SBA and others for the SBA’s failure to comply with the EIDL grant requirements under the CARES Act (e.g. the grant is to be in the amount requested by the applicant).
Updates on status of:
- Stimulus check: You can check on the amount and status of your stimulus check on the IRS website. If you are not required to file a tax return, you can provide deposit and other information to the IRS via their website.
- EIDL and PPPL programs: The Administration announced these programs were tapped out as of April 16, 2020. Through the PPPL program, 5,000 lenders issued $342 billion in 1.7 million loans, amounting to an average of $206,000 per loan.
- EIDL Advance/Grant (up to $10,000): The SBA released a notice that this will be limited to $1,000 per employee. We were told by the SBA that they are still considering applications completed between March 30 and April 16, 2020, but are not accepting new applications at this time. The SBA also said that, while the acceptance or denial of an application will have no bearing on whether an applicant receives an advance, applicants will not receive advances until their loan applications are processed. The SBA is advising loan applications are taking three or more weeks to process.
- Additional $600 in weekly unemployment benefits: The Labor Department released guidance on the additional $600 in weekly benefits. Timing of when these will take effect differs by state. All participating states are expected to apply the additional $600 retroactively to March 29, 2020.
- Unemployment benefits for self-employed and gig workers: The Labor Department recently released guidance for unemployment benefits for 1099 and Schedule C workers. Timing, the application process, and qualification requirements differs by state.
Expanded Unemployment Benefits for COVID-19
The Administration and Congressional leaders have reached an agreement on a $2T stimulus package that will expand both the length and amount of unemployment insurance available. If you’re recently unemployed and worried about how you’ll manage financially, here’s the information we know (so far):
- Workers will be eligible for a $600 weekly boost on top of regular state unemployment benefits
- Gig workers, freelancers, self-employed are eligible
- Workers who are furlough can get company benefits and UI
- Generous sick pay and family leave might be available first. The Families First Coronavirus Response Act signed on March 8th could qualify you for paid sick or family leave for two to 12 weeks.
- The 7-day waiting period to receive benefits could be waived, along with other eligibility requirements
- There’s a shortage of staff available to help with unemployment applications, and the websites become easily overwhelmed—but don’t give up trying to apply!
(Source: Kelly Anne Smith, Forbes)
Have questions about filing and payment deadline changes related to coronavirus?
The Internal Revenue Service just released a Frequently Asked Questions database pertaining specifically to Filing and Payment deadlines for the 2019 tax year. Information on the extended filing date, making contributions to your IRA, and more can be found in their FAQ, check it out here.
Deadline to make IRA and HSA Contributions for 2019 Tax Year Extended!
The IRS has clarified that the deadline to make Individual Retirement Account and Health Savings Account contributions for the 2019 tax year has been extended to July 15, 2020, as that is also the new deadline for filing and paying taxes for the 2019 year. This gives individuals an additional two months to make contributions to their retirement plans for the 2019 year.
Federal Income Tax Payment & Filing Deadlines Extended
The federal government said it is moving the April 15, 2020, tax filing deadline to July 15, 2020. Previously, it announced some income tax payments due on April 15, 2020, would be extended (deferred) for up to 90 days, until July 15, 2020, without incurring penalties and interest. The payment deferral applies to up to $1 million of non-corporate income tax payments, including self-employment taxes, and $10 million of corporate income tax payments. We’ll provide more information on this as it becomes available. Read the IRS notice deferring tax payments here.
Some State Income Tax Payment Deadlines Extended
Most states are synchronizing their payment and filing deadlines with the federal. New date shown for deadline in 2020. We’ve noted where there are differences. We recommend THIS chart from AICPA for more detailed information.
Up to two weeks of paid sick leave for COVID-19 care, capped at $511/day, and up to 12 weeks of paid sick leave to care for children whose schools or childcare centers are closed due to COVID-19, capped at $200/day. Excludes: companies with more than 500 employees, individuals employed less than 30 days. Department of Labor may exempt companies with less than 50 employees. Employers may exclude front line health workers. Applies to part-time employees.
Employers recover the cost of this and the cost of health insurance while the employee is on paid leave via a fully refundable payroll tax credit.
Contractors may take paid leave as an income tax credit against their quarterly tax estimates.
Also contains free COVID-19 testing.
Expires December 31, 2020.
Reality Bites: Oy Corona!
If you have been wondering what is the big deal about COVID-19 (you’re not alone), here is the scoop: COVID-19 spreads so fast that, if unchecked, experts worry the sick could overwhelm hospitals, forcing them to ration care, having to choose who receives services (ergo lives) and who doesn’t – an equation favoring the young, healthy, and wealthy. This occurred in Wuhan, China, and is occurring throughout Italy. The resulting strain on our medical system weakens our society’s ability to respond to other catastrophes. Read more, including tips on how to turn this lemon into lemonade and videos from Josh Gad and John Garrett to lighten the situation, here.
Employers May Make Tax-Free Payments To Employees To Cover COVID-19 Expenses
IRC Section 139 allows employers to make “qualified disaster relief payments” to employees to assist those employees in dealing with the COVID-19 crisis. The payments are tax-free to the employees, and fully deductible to the employer. Find exemptions and requirements here.
(Credit: Tony Nitti)