COVID-19 Response

Critical operations will continue, filing deadlines delayed

The Internal Revenue Service reminds taxpayers and tax professionals to use electronic options to support social distancing and speed the processing of tax returns, refunds and payments. Click here to learn more about electronic filing options.


The deadline for filing Federal and State 1040s is now July 15, 2020.

Economic Impact Payments

Check IRS.gov for the latest information:

No action needed by most people at this time. Click here to view this release on the IRS website.


IR-2020-61, March 30, 2020

WASHINGTON — The Treasury Department and the Internal Revenue Service today announced that distribution of economic impact payments will begin in the next three weeks and will be distributed automatically, with no action required for most people. However, some taxpayers who typically do not file returns will need to submit a simple tax return to receive the economic impact payment.


Who is eligible for the economic impact payment?

Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible. Social Security recipients and railroad retirees who are otherwise not required to file a tax return are also eligible and will not be required to file a return. 

Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child.


How will the IRS know where to send my payment?

The vast majority of people do not need to take any action. The IRS will calculate and automatically send the economic impact payment to those eligible.


For people who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. The economic impact payment will be deposited directly into the same banking account reflected on the return filed.


The IRS does not have my direct deposit information. What can I do?

In the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail.

Update May 18, 2020: Some recipients will receive their payments via prepaid debit card instead of by check. View this press release on the U.S. Department of the Treasury website.


I am not typically required to file a tax return. Can I still receive my payment?

Yes. The IRS will use the information on the Form SSA-1099 or Form RRB-1099 to generate Economic Impact Payments to recipients of benefits reflected in the Form SSA-1099 or Form RRB-1099 who are not required to file a tax return and did not file a return for 2018 or 2019. This includes senior citizens, Social Security recipients and railroad retirees who are not otherwise required to file a tax return.


Since the IRS would not have information regarding any dependents for these people, each person would receive $1,200 per person, without the additional amount for any dependents at this time.


I have a tax filing obligation but have not filed my tax return for 2018 or 2019. Can I still receive an economic impact payment?

Yes. The IRS urges anyone with a tax filing obligation who has not yet filed a tax return for 2018 or 2019 to file as soon as they can to receive an economic impact payment. Taxpayers should include direct deposit banking information on the return.


I need to file a tax return. How long are the economic impact payments available?

For those concerned about visiting a tax professional or local community organization in person to get help with a tax return, these economic impact payments will be available throughout the rest of 2020.
 

Where can I get more information?

The IRS will post all key information on IRS.gov/coronavirus as soon as it becomes available.


The IRS has a reduced staff in many of its offices but remains committed to helping eligible individuals receive their payments expeditiously. Check for updated information on IRS.gov/coronavirus rather than calling IRS assistors who are helping process 2019 returns.

Federal Small Business Stimulus Aid Programs

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Families First Coronavirus Response Act (FFCRA)

This act provides tax credits to covered employers whose employees are placed on sick or medical leave for reasons related to COVID-19. Coverage begins on April 1, 2020 and requires paid leave under certain conditions for employers with fewer than 500 employees. This legislation is intended to ensure workers do not have to choose between paychecks and public health, while also mitigating the economic impact on businesses. Those with fewer than 50 employees may be exempt from providing this leave under certain circumstances. Read this article for a summary of the FFCRA and its exemptions as it pertains to employers. Mandated fact sheets are also available from the U.S. Department of Labor.

Paid Leave Required by Small and Mid-Sized Businesses

Click here to read more about paid leave mandates.

COVID-19 Relief for Small Businesses

Click here to learn more about assistance available for small businesses.

Small Business Stimulus Aid Programs

The U.S. Chamber of Commerce offers additional information about the Coronavirus Preparedness and Response Supplemental Appropriations Act, which enables the U.S. Small Business Administration to offer $7 billion in disaster assistance loans to small businesses impacted by COVID-19. 

Paycheck Protection Program

The U.S. Small Business Administration (SBA) will provide $349 billion in loans through the Paycheck Protection Program to small businesses and non-profits. Portions of these loans will be forgiven to the extent that recipients maintain their existing workforce or rehire. Loans can be up to $10 million and interest rates are maxed at 4% for portions of the loan that do not qualify for loan forgiveness. Learn more about the program here, and check out the payroll calculator on our Resources page.


Borrowers should carefully review PPP regulations and guidance and the certifications required to obtain a loan, as they are continually being updated to reflect the most current state and federal regulations.


For general questions you can contact the SBA PPP dedicated line at 1-833-572-0502. If you are having difficulty accessing the PPP with your lender, you can find a list of all eligible lenders based on your zip code here. Additionally, certain online lenders like PayPal are accepting PPP applications. Intuit also provides a great calculator for estimating PPP eligibility. Please make sure you retain all documentation related to your PPP application and contact our firm if we can help support you during this time.

Economic Injury Disaster Loan (EIDL) Update

Update direct from the SBA, 4/13/2020


On March 29, 2020, following the passage of the CARES Act, the SBA provided small business owners and non-profits impacted by COVID-19 with the opportunity to obtain up to a $10,000 Advance on their Economic Injury Disaster Loan (EIDL). The Advance is available as part of the full EIDL application and will be transferred into the account you provide shortly after your application is submitted. To ensure that the greatest number of applicants can receive assistance during this challenging time, the amount of your Advance will be determined by the number of your pre-disaster (i.e., as of January 31, 2020) employees. The Advance will provide $1,000 per employee up to a maximum of $10,000.


You may be eligible for another loan program, the Paycheck Protection Program, which is available through participating lenders. Below is a comparison of the two loan programs:


Paycheck Protection Program

PURPOSE

Forgivable if used for payroll (minimum of 75% of the funds received) and the remaining for certain operating expenses (amount of any EIDL advance is not forgivable)

TERMS

Up to $10 million

1% interest rate

FORGIVABLE

YES

MATURITY

2 years

FIRST PAYMENT DUE

Deferred 6 months


Full EIDL Loan

PURPOSE

To meet financial obligations and operating expenses that could have been met had the disaster not occurred (amount of any EIDL advance is forgiven)

TERMS

Up to $2 million

3.75% for businesses

2.75% for non-profits

FORGIVABLE

NO – EIDL Loan

YES – EIDL Advance

MATURITY

30 years

FIRST PAYMENT DUE

Deferred 1 year


To locate a Paycheck Protection Program Lender, please visit: www.SBA.gov/PaycheckProtection.

Information on available resources may be found at www.sba.gov/coronavirus. For more information on these services, please go to www.sba.gov/local-assistance to locate the email address and phone number for the nearest SBA district office and/or SBA's resource partners.

                 

Flexible Spending & HSA Accounts

Recent Changes Due to COVID-19

The CARES Act recently implemented by Congress has further defined qualifying events (pertaining to COVID-19) to provide greater flexibility for mid-year election changes to Flexible spending accounts.


With schools and childcare facilities temporary closed, you may be eligible to change your Dependent care election. Some qualifying events include:

  • Loss of childcare due to daycare facility closed
  • No longer need childcare due to reduction in hours, work from home orders, or loss of employment
  • Need for childcare services due to schools being closed

For Medical Flexible Spending Accounts (FSA), the IRS has recognized the following as qualified events where you are now eligible to make an election change:

  • FMLA leave
  • Reduction in work hours that causes loss in coverage
  • Change in employment status
  • Change in cost from provider
  • Change in provider due to change in cost

If you are interested in making a change to your elections under your Flexible Spending Account, we strongly recommend contacting your Human Resources department for further instruction.


The CARES Act also now allows reimbursement for expenses incurred for non-prescribed over-the-counter (OTC) medicine and medical supplies that are eligible for reimbursement under Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA). This change repeals the Affordable Care Act's prohibition on reimbursement of such expenses under those arrangements. In addition, menstrual products are included as covered expenses that can be reimbursed under FSA and HSA Medical accounts. 


These provisions are retroactive to January 1, 2020 and at this time there is no set date for an expiration on these provisions.

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