. There have been a whole lot of changes in recent weeks – below is my attempt at a “headline” version of items that may impact you. I’ve attempted to quote or provide links to sources where possible, and review for accuracy (any errors herein are mine). Keep in mind things are changing daily – and options may impact everyone differently depending on individual circumstances, so you should confirm expected result before taking action. If you have questions or would like additional information on a particular area, please reach out.
IRS Deferred Deadlines:
7/15/2020: Form 1040, 1041, 1120 with normal 4/15 tax filing deadline – filing and payment deferred
7/15/2020: IRA and HSA contributions for 2019 (normal 4/15 deadline)
7/15/2020: Q1 2020 estimated payments (Q2 still due 6/15)
7/15/2020: Due date for extension to 10/15 if not able to file by 7/15 – extension of filing, not payment
7/15/2020: Deadline to correct excess contribution to 401k/IRA (normally 4/15)
IRS installment agreement payments suspended 4/1 – 7/15/20
2020 IRA Distributions:
RMD (required minimum distribution) waived for 2020.
10% early distribution does not apply for coronavirus-related distribution(s) in 2020 up to $100,000.
Changes to withholding requirements, plan loans, etc – contact your investment and/or tax advisor
2020 Charitable Contributions:
$300 above-the-line deduction for individuals who do not itemize
Limiting charitable deduction to 60% of income can be suspended for 2020 for qualified contributions.
2020 Miscellaneous:
Over-the-counter items (including menstrual products) are now eligible expenses for HSA/FSA or HRA
Telehealth services can be paid before reaching deductible (temporary to encourage telehealth during Covid outbreak)
Increase in allowable corporate charitable contribution deduction
Student loan payments temporarily qualify as tax-excluded employer education assistance
Changes to rules regarding NOL (net operating loss) carryback and income limitations
Stimulus Payments:
Up to $1200 per taxpayer not claimed as dependent plus $500 per child under 17 (subject to phase-out thresholds)
The IRS will process these payments automatically based on 2019 tax return (if filed), 2018 tax return, or information such as social security payments for non-filers
How much will you get? Here’s a Payment Calculator (see green box in middle of article)
States are extending various state and local income and other tax filings. Here’s a comprehensive link:
Paid Sick Leave and Expanded Family and Medical Leave under FFCRA
Department of Labor COVID-19 information
Information for Employers:
The CARES Act information below is largely based on Summary of Cares Act for Employers
Section 1102/1106: Paycheck Protection Program: SBA Loans – for specific purposes, 10-year terms and criteria for forgiveness. Note: This is first-come, first-serve while funds are available; also this loan and certain other credits are mutually exclusive
Sections 2102-2111: Pandemic Unemployment Assistance/Emergency Increase/Temporary Full First Week
Expands unemployment to individuals not eligible for regular/extended benefits (such as self-employed and Gig workers)
Effective 1/27/2020 to 12/31/2020
Maximum 39 weeks, amount authorized by state
Eligible individuals receive additional $600/week on top of state’s unemployment insurance
Waiting period (typically one week) waived
Additional 13 weeks after state unemployment exhausted (typically 26 weeks, so up to 39 weeks)
Partial unemployment for employees with reduced hours
Section 2301: Employee retention credit for eligible employers
Applies to wages (and health benefits) paid after 3/21/2020 thru 12/31/2020
Offset employer social security payments up to $5000 per employee who continues to work
Eligible employer – operations fully or partially suspended due to COVID-19 OR gross receipts are 50% or less as compared to same quarter in prior year (teleworking is considered operational)
Different criteria for employers with more than or less than 100 employees (in 2019)
Not eligible if receive small business interruption loan under CARES
Section 2302: Delay in payroll tax payments – employer share of social security tax can be deferred in 2020, with 50% paid in 2021 and 50% in 2022
Section 3601-3602: Emergency Paid Sick Leave – effective 4/1/2020
max $511/day related to direct Covid illness/symptoms x days missed up to 10
max $200/day related to care for someone with direct Covid illness/symptoms x days missed up to 10
max $200/day related to caring for child due to school/child care provider closure x days missed up to 10 weeks (subject to 2-week waiting period during which employer sick time can be used)
Section 3603: Unemployment insurance – managed by states
Section 3605: Paid leave for rehired employees (terminated after 3/1/2020)
Section 3606: Advance payroll tax refund for Emergency Paid Sick Leave and FMLA – if paid leave > payroll tax deposits. Families First Act also provides credit for qualified health expenses (such as health insurance premiums).
Section 3608: Extension for minimum contribution to single employer pension plan
Section 4003: Loans for certain distressed businesses (related to passenger and cargo air carriers, national security, others per Federal Reserve)
Tax Code 139: Disaster Relief – employers can provide “qualified disaster relief” payments to or on behalf of employees (not taxable income)
…and a technical correction was added in to make qualified improvement property for lessors 15-year property eligible for bonus depreciation (retroactive to 1/1/18).
Take care and stay safe!