These are extraordinary times. As a Generation X’er, this is shaping up to be the most influential time of my life – and not in a good way. The best way I can see to help in the fight against COVID-19 (aside from following social distancing guidelines), is to provide information that others may find useful in their financial or business lives. This is why I am introducing Tax Time’s Blog today, and the first topic will be the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act.
Relief for Individuals
You get more time: The filing and payment deadline for tax returns and payments normally due on April 15, 2020, has been extended to July 15, 2020. This does not apply to prior years, or even to returns that were due March 15, 2020, like S Corporation (Form 1120S) and Partnership (Form 1065) returns. The details are available on the Internal Revenue Service’s (IRS) website.
You might get some cash: Many Americans will be eligible for economic impact payments of $1,200 per individual, $2,400 for married couples, and $500 for each qualifying child. IRS is managing these payments and, as of this writing, guidance is still being developed. It appears that filing your 2018 and/or 2019 income tax returns will be important, since that’s where the IRS will look to determine your eligibility and for your banking information, to make the direct deposit. Now is a good time to file, if you haven’t already, and we can help. Here are the basic rules are the economic impact payments –
Single taxpayers with Adjusted Gross Income (AGI) up to $75,000 will be eligible for the maximum payment of $1,200.
The payment reduces by $5 for each $100 of income above $75,000, down to no payment at all for AGI’s above $99,000.
Married taxpayers with AGI’s up to $150,000 will be eligible for the maximum payment of $2,400.
The payment reduces by $5 for each $100 of income above $150,000, down to no payment at all for AGI’s above $198,000, when there are no qualifying children.
You can get the latest updates on the payment by following the IRS’ Coronavirus Tax Relief web page. Clients can get in touch with us when they have questions specific to their own, personal situation, by sending an email to email@example.com.
Relief for Businesses
The IRS’ Coronavirus Tax Relief web page has some good information for small businesses as well. There are several programs in development to help those businesses affected by the stay-at-home orders around the country.
Small Business Administration’s Economic Injury Disaster Loans (EIDL): The CARES Act temporarily expands eligibility for Economic Injury Disaster Loans (EIDL) administered by the SBA and provides an emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19. The advance will be available within 3 days of applying for an EIDL. To access the advance, you first apply for an EIDL and then request the advance. You will not have to repay the advance, even if your application for a loan is denied. The advance may be used to keep employees on payroll, to pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent, and mortgage payments. You can apply for the loan on the SBA’s website here.
Paycheck Protection Program: The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. The Paycheck Protection Program will be available through June 30, 2020. Get more information about this program and apply at the SBA’s website. You can download a sample of the application form to see what kind of information you’ll need to provide.
Employee Retention Credit: There is a refundable credit of 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19. You can get more information about that credit here. Here’s what you need to do –
Fax the form to 855-248-0552.
Get in touch if you need help. If you’re not yet a client, let’s chat about how I can help your business. Existing clients can contact me directly at firstname.lastname@example.org for specific questions about their own situations. Stay tuned to this page and the links above for updates, as these topics are all very fluid and guidance is being developed and changing rapidly.
Above all else, stay safe. We can beat this together.