Economic Impact Stimulus
IRS Portal for Non-Filers: https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here
IRS Portal for updating Banking/ Dependents/ Mailing Address: https://www.irs.gov/coronavirus/get-my-payment
IRS warns of coronavirus-related tax scams: https://www.accountingtoday.com/news/irs-warns-of-coronavirus-related-tax-scams?position=editorial_4&campaignname=ACT%20Daily-04032020&utm_source=newsletter&utm_medium=email&utm_campaign=ACT_Daily_Daily%2B%27-%27%2B04032020&bt_ee=zSXgZbaWA93%2BVGBnP3UfxYF90VhVIUZsvz%2BE0tDTSaM86m8GxMpYNWfxyM%2BBVjy9&bt_ts=1585908060649
Key Provisions of COVID-19 Stimulus
Payroll Protection Program: This is a loan program through SBA that provides funds to small businesses and the self-employed to cover payroll, utility, rent or mortgage interest expenses. Some or all of this loan may be forgiven as a tax free grant. Please do not confuse this with other disaster relief loans offered on the SBA website. You must contact a lender directly to initiate the PPP loan, the sooner the better. SBA will start accepting applications through lenders starting April 3rd, 2020. Check the links below for additional information, and if you have questions, please call the office.
Payroll Protection Loans: https://www.uschamber.com/sites/default/files/023595_comm_corona_virus_smallbiz_loan_final_revised.pdf
Extended and Enhanced Unemployment Insurance (UI) Benefits Available: In conjunction with the Federal DOL , States are offering extensions of UI benefits up to 13 weeks over normal state benefit periods not to exceed 39 weeks of benefits. In addition, there will be up to an additional $600 in Federal UI benefits under the Pandemic Unemployment Assistance (PUA) added to the state benefit through July 31, 2020. UI benefits are also being extended to Sole-proprietors, sub-contractors and the self-employed if qualified.
Unemployment Benefit Flow Chart: https://www.labor.ny.gov/ui/pdfs/cares-act-need-to-know-flowchart.pdf
NYS Extends Unemployment benefits to workers with Reduced Hours: https://www.labor.ny.gov/ui/employerinfo/shared-work-program.shtm
Required Paid Sick/ Family Leave: Starting March 18th in NYS and Federally on April 2nd, employers are required to pay employees 100% of wages/salaries up to $511 if they’ve been forced to take leave for coronavirus related reasons. This required pay, under the federal guidelines, will be reimbursed to the employer through credits against their payroll taxes. There is a fine balance that will have to be managed to ensure compliance with both state and federal mandates in this area. See below for a link to a required posting ALL employers have to post for employees by April 1st. If employees are working from home employers are required to forward this posting to those employees as well. Call our office or reach out to your payroll provider for more details on this mandate.
Required Employer Posters: https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf
Employee Retention Credit: Eligible employers will receive a credit against employment taxes for each calendar quarter in an amount equal to 50% of the qualified wages with respect to each employee. The amount of qualified wages taken into account for each eligible employee, however, will not exceed $10,000 per calendar quarter and the credit will not exceed the applicable employment taxes owed for such calendar quarter. The credit is not applicable if the employer is also taking advantage of the small business interruption loan (PPP loan).
IRS Retention Credit FAQ’s: https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act
2020 Recovery Rebates for Individuals: Individuals with an adjusted gross income of $75,000 or less will be eligible for up to $1,200 ($2,400 for joint tax returns) and $500 for each qualifying child under age 17. The payments will start to phase out for taxpayers who earn more than $75,000 or $150,000 for a joint return. If you filed a 2018 or 2019 tax return or receive Social Security Benefits and included banking information, your recovery stimulus will be direct deposited. If not, checks will be distributed. The IRS is still developing additional guidance and we will do our best to stay on top of this as it becomes available.
Additional info from the IRS: https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know
Additional Individual Stimulus Provisions:
- Student Loan Deferrals: You may request a coronavirus related deferral of payments for federally backed student loans through Sept. 30, 2020. Also- Interest accruals have been temporarily suspended. Be careful if your in a loan forgiveness program that any actions taken under the stimulus acts doesn’t jeopardize your standing in those programs
- COVID-19 related Distributions from Qualified Defined Contributions Plans (IRA, 401(k), 403(b) etc..):If your personal health or economic situation requires you to dip into your retirement savings, you may take a distribution of up to $100,000 from certain retirement plans without fear of an early withdrawal penalty. You will have the option to pay back the distribution over a 3-year period and not have it included in income, or you may pay tax on the distribution ratably over a 3-year period. There MUST be a COVID-19 related issue necessitating the withdrawal.
- Charitable Contributions: for tax year 2020, an above the line deduction will be allowed for up to $300 in charitable contributions.
- Suspension of RMD’s: For the 2020 tax year, required minimum distributions from retirement plans are suspended.
This is just a snapshot of provisions related to the 3 federal Acts related to coronavirus stimulus. There are many additional provisions not discussed here. The above information is not intended to be complete authority on the topics, please contact your tax preparer for further details on any subjects you find relevant to your situation.