COVID-19 News & Updates

S.3548 cares act

In response to the COVID-19 pandemic and in order to provide relief for employers and unemployed workers, Congress passed HR 748 – the Coronavirus Aid, Relief, and Economic Safety Act (CARES Act).

CASH STIMULUS PAYMENTS AND UNEMPLOYED WORKER BENEFITS

Direct Stimulus Checks:  The bill provides direct payments of $1,200 to US residents with an annual income up to $75,000 ($150,000 for married couples).  The stimulus checks are not available to those who have an annual income more than $99,000 ($198,000 for married couples).  An additional $500 per qualifying dependent child will be included with the $1,200 stimulus payment to qualifying Heads of Household.  This stimulus payment will be based upon one’s income from their 2018 tax return if they have not yet filed a 2019 tax return. The portal is available to use now: https://www.irs.gov/coronavirus/get-my-payment

Unemployment Benefits:  Employee, Self-employed individuals, independent contractors and gig workers who are working reduced hours, laid off, or are unable to work as a result of the COVID-19 outbreak will be eligible for unemployment insurance benefits.  In addition to state benefits, unemployed workers (including freelancers and workers who are furloughed) will receive $600 per week for four months. Oregon Unemployment website: https://www.oregon.gov/employ/unemployment/pages/default.aspx

ASSISTANCE FOR SMALL BUSINESSES

The CARES Act package provides significant funding and new programs to support small businesses across the country.  The package provides:

$349 billion in forgivable loans through the Paycheck Protection Program with no collateral or personal guarantee required.  https://home.treasury.gov/system/files/136/PPP--Fact-Sheet.pdf  

$10 billion for SBA economic injury disaster loans (EIDL) to provide grants of up to $10,000 or loans u to $2 million to qualifying small businesses.  https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources#section-header-0

$17 billion for SBA to cover six months of payments for small businesses with existing SBA backed business loans  This is six months of total relief from payments for existing and new applicants, though collateral is required.  New applicants have six months from the signing of the legislation to apply through SBA’s Lender Match Portal with six months of relief for both principal and interest. https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources#section-header-0

EMPLOYEE RETENTION CREDIT

Businesses that are forced to close or whose income has substantially declined as a result of COVID-19 could receive tax credits for 50% of employee wages up to $10,000 per employee.  This credit is not available for employers who have Paycheck Protection Loans. https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act

PAYROLL TAX PAYMENT DEFERRAL

Employers may choose to defer the 6.2% FICA taxes due through 2021 so they can increase cash flow and continue to pay their employees.  If a business chooses to delay paying payroll taxes to increase cash flow, they will be required to pay 50% of these taxes by December 31, 2021 and the taxes must be paid in full by the December 31, 2022.  Employers who have received Small Business Act loans that will be forgiven are not eligible. https://www.irs.gov/pub/irs-drop/n-20-22.pdf

RETIREMENT ACCOUNT CHANGES

Temporary waiver of RMDs for 2020 for all Retirement Savers: waives the required minimum distribution (RMD) requirement for retirement plans and IRAs in 2020.  This provision also applies to RMDs due in 2020, not attribute to 2019.  Individuals do not need to meet COVID-19 qualifying criteria to temporarily waive RMDs for 2020.

Elimination of Early Withdrawal Penalty: Waives the 10% early withdrawal penalty for withdrawals up to $100,000 from qualified retirement accounts for retirement plan participants who qualify for COVID-19 relief.  Please contact your tax advisor or plan administrator for further information.

Increase in the Retirement Plan Loan Amount: Increases the amount that can be taken as a loan from a qualified retirement plan from $50,000 to $100,000 for 2020 for those who qualify for COVID-19 relief.

H.R.6201 Families First Coronavirus Response Act

H.R.6201, or Families First Coronavirus Response Act, became law on March 18, 2020. According to Congress.gov, the bill provides paid sick leave and free coronavirus testing, expands food assistance and unemployment benefits, and requires employers to provide additional protections to health care workers.

This bill amends the Family and Medical Leave Act of 1993 and is now known as “Emergency Family and Medical Leave Expansion Act”. The bill applies only to private employers with fewer than 500 employees and provides employees with the right to take up to 12 weeks of job-protected leave.  Employers are also required to provide full time employees 80 hours of paid sick leave to self-isolate, care for a family member who has contracted the coronavirus, or as a result of interruptions in school or childcare due to the pandemic. This benefit is immediately available for the employee to utilize and is in addition to any existing paid sick leave offered by the employer.

According to Congress.gov, employers will be allowed tax credits for providing paid Sick Leave or Emergency Family and Medical Leave.  For eligible self-employed individuals, the bill allows a credit for the amount equal to the number of days that the individual is unable to perform services for a reason that said individual would be entitled to receive sick leave, multiplied by the lesser of $200 or 67% of the average daily self-employment income of the individual. Limits apply to each credit. For further information and greater detail, visit:
https://www.congress.gov/bill/116th-congress/house-bill/6201/text

H.R. 6074 Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020

H.R. 6074, or Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, became law on March 6, 2020. This bill provides $8.3 billion in emergency funding for federal agencies to respond to the coronavirus outbreak.

$20 million of the $8.3 billion has been allocated to the “Disaster Loans Program Account” of the Small Business Administration. Coronavirus has been deemed a disaster and the funds that have been transferred to the Disaster Loans Program Account will be available to make economic injury disaster loans in response to the coronavirus. The remaining $8.28 billion will be used to fund the development, manufacturing, and delivery of vaccines and other necessary supplies, as well as grants for local, state, and tribal public health agencies. Further information is available at:
https://www.congress.gov/bill/116th-congress/house-bill/6074/text

Federal Filing Deadlines

On March 21, 2020, the Treasury Department and Internal Revenue Service announced that the federal income tax filing due date has been automatically extended from April 15, 2020 to July 15, 2020. Payments to the Department of the Treasury may also be deferred to July 15, 2020 in an amount up to $1,000,000 without penalties and interest. There is no need to file additional forms to qualify for the extension, as the deadline has been automatically extended for all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax. The Internal Revenue Service urges taxpayers who are due a refund to file as soon as possible. The IRS Commissioner, Chuck Rettig, notes that “Filing electronically with direct deposit is the quickest way to get refunds.” For more information and regular updates from the IRS regarding the Coronavirus, visit:
https://www.irs.gov/coronavirus

State Filing Deadlines

According to Oregon.gov:

“Initial quarterly payments for the new Corporate Activity Tax (CAT) are due April 30, 2020. The department understands that the pandemic may impact commercial activity, up or down, to an extent that makes it difficult for businesses to estimate their first payment. The department will not assess underpayment penalties to taxpayers making a good faith effort to estimate their first quarter payments.”

At this time, there have been no further updates from the Oregon Department of Revenue regarding any deadline extensions in response to the COVID-19 outbreak. Updates can be found on the Oregon Department of Revenue’s official website:

https://www.oregon.gov/dor/Pages/COVID19.aspx

Federal Reserve

As of Monday, March 23, 2020, the Federal Reserve has announced that banks will be allowed to continue lending to creditworthy households and businesses in order to support the U.S. economy. For more press releases from the Federal Reserve, visit:

https://www.federalreserve.gov/covid-19.htm

Department of Education

On March 20, 2020, U.S. Secretary of Education, Betsy DeVos, announced that the office of Federal Student Aid would provide student loan relief by allowing borrowers with federally held student loans to have their interest rates set to 0% for a period of at least 60 days. Borrowers will also have the option to suspend payments for at least two months. Updated press releases from the Department of Education can be found at:
https://www.ed.gov/news/press-releases

Additional Resources for Coronavirus Updates:

U.S. Small Business Administration
https://www.sba.gov/

CDC Guidance for Businesses and Employers
https://www.cdc.gov/coronavirus/2019-ncov/community/organizations/businesses-employers.html

The President’s Coronavirus Guidelines for America: 15 Days to Slow the Spread
https://www.whitehouse.gov/wp-content/uploads/2020/03/03.16.20_coronavirus-guidance_8.5x11_315PM.pdf

U.S. Department of Labor Coronavirus Resources
https://www.dol.gov/coronavirus

Oregon Health Authority COVID-19 Updates
https://govstatus.egov.com/OR-OHA-COVID-19

COVID-19 Related Business Layoffs, Closures, and Unemployment Insurance Benefits
https://www.oregon.gov/employ/Pages/COVID-19.aspx

Oregon Coronavirus Information & Resources
https://govstatus.egov.com/or-covid-19

 

Reid, Hanna, Johnson & Company CPAs LLC

1101 Siskiyou Boulevard
Ashland, OR 97520-2238

Telephone: 541-482-3711
Fax: 541-482-3714
E-Mail: Reception@reidhanna.com

For more information click here