03/30/2020
Tax Update for COVID-19 Relief
Due to the importance of this topic and its lasting effects on everything from health care to the economy, I have been gathering information from the IRS and tax member associations that are covering the latest COVID-19 tax updates. I can give you the information I have received guidance on.
Due Date for tax returns and payments originally slated for April 15, 2020 have been extended to July 15, 2020. Penalties and interest will be waived for these returns. This does not cover partnership (1065) or Sub Chapter S Corporate (1120-S) returns as they were due before the extension was added.
Also HSA and Retirement contributions make up payments that were due by 4/15 for the 2019 tax year have been extended to 7/15 as well.
The first estimated tax installment payment for 2020 which was due by 4/15 has been extended to 7/15. The remaining payments are due on schedule for 6/15, 9/15 and 1/15/21. I understand it is weird that the second payment is due before the first, but no other guidance is given. So to recap, the payments are due 6/15, 7/15, 9/15 and 1/50/21.
Payments for 2019 taxes that were scheduled for 4/15/20 can be changed. For most individuals that I prepared taxes for, you can call the US Treasury Financial Agent at (888)-353-4537 to change your payment date. If you used the IRS Direct Pay or EFTPS. you can log into your account and cancel the payment and reschedule it for the 7/15/20 due date. If you paid by credit card, you can call and cancel that payment and make a new one.
Sick Leave - If you have questions on this as an employee or business owner, send me a text and I will forward you the information that I have at the moment. This information is ongoing and all the details have not been released from the IRS on exactly how this will work.
Small Business Resources - The SBA has made available up to 2 million dollars for small business low interest loans, with up to 1 million dollars that is forgiven.These loans are for payroll for employees that make under 100,000, rent and or mortgage interest and utilities to keep your business open and running. There is also a $10,000 emergency grant you can get right away. You can apply directly with this link -
https://www.sba.gov/funding-programs/disaster-assistance
If the link does not work, copy and paste into your browser.
Individuals:
1. Unemployment Benefits are increasing for those individuals whose employment has been reduced or stopped. Please visit your state unemployment website for further details.
2. Rebate Credit checks - 1200 per adult or 2400 for married individuals and 500 per qualifying child. Because this is a credit, these payments are non-taxable. These will be mailed or deposited as per your last tax return filed. There is income limitations, but if you made 75,000 single or 150,000 married filing together or less, you should received the full rebate amount. From the information that I have, for those people that are above this income level of 75 or 150 thousand, the payment will begin to phase out between 75,000 and 98,000 for single and 150,000 and 198,000 for married persons. Anything over 98,000 and 199,000 levels of income will not be eligible for the rebate check. Persons on Social Security will also be eligible, even if they were not required to file. I have no information on the when the rebates will be deposited or mailed. There are also some exclusions on the rebates concerning back taxes, back child support or back student loans that are not clear as to what will happen yet. If you do not receive the check for some reason, it can be available to some when they file their 2020 taxes in 2021.
3. Distributions from your IRA up to 100,000 can be taken with no penalty. The income from the distribution can be elected to claim over a three year period and if you pay it back in 3 years, it is considered non-taxable. You must be directly affected to care for a spouse or dependent directly related to COVID-19 or have adverse financial effects of COVID-19. It covers distributions from 1/1/20 until 12/31/20.
4. Individuals will also have credit protection. You can make an agreement with a creditor to defer one or more payments for up to 120 days beginning on 1/31/20. On federal backed mortgage loans, taxpayers who are experiencing hardships with COVID-19 can ask for forbearance by submitting a request confirming their hardship for up to 180 days. No new foreclosures or evictions are being allowed during the CARES ACT. When we are over the hump of COVID-19 this will be released and evictions and foreclosures will resume. There will be more information on this when we can return to normal status.
I will update any information if I have found it to be incorrect. Also please visit IRS.GOV for all the latest information regarding the disaster assistance available to you as an individual or small business.
