Special Notice to Clients — 

This checklist was prepared for our clients and friends as a quick way to identify eligible programs. Please contact us for the details. Many of the details are not available yet from the government.
This is not meant to be an all-inclusive summary of the extensive programs.

 

Delays in Filing and Paying

        Federal tax payments and returns due 4/15/20 are delayed until 7/15/20

        For individuals, trusts, estates, partnerships, associations, companies and corporations

        Automatically postpones all 4/15/20 filings without a limit on amount

        Includes 1st quarter 2020 federal estimates (the 2nd quarter estimate will be due before the 1st quarter)

        Penalties and interest are waived for this 90 day period

        Includes individual, trust, gift tax, and C corporation returns

        Payments for IRA’s, HSA’s, MSA’s are also delayed until 7/15/20

        2016 claim for refund (statute of limitation issues) is not delayed

        Most states will follow suit for a delay in payment and filing

 

Direct Payments (Rebates) to Individuals

        Individuals with income ≤ $75,000 receive $1,200

        Married couples with income ≤ $150,000 receive $2,400

        Parents with children under age 17 receive $500 / child

        Phase-outs occur for individuals from $75,001 – $99,000 and married couples from $150,001 – $198,000

        Income is based on 2018 return unless 2019 return is filed

        Money is to be sent mid April (up to 12/31/19) by direct deposit if that info is available or by check otherwise

        Rebate is not subject to tax

        Reconciliation on 2020 return (Keep if you got too much and claim a credit if you got too little based on 2020 income)

 

Expanded Unemployment Benefits

        Extra $600 / week for 4 months (in addition to state benefit)

        Maximum of 39 weeks for combined federal and state assistance

        Self-employed and independent contractors would be eligible

 

Retirement Account Withdrawals

        Required minimum distributions (RMD) for 2020 are waived

        Up to $100,000 distributions that must be used for Corona related purposes

        Starting 1/1/20

        Can be repaid within 3 years or are taxed over 3 years (can elect out of 3 year spread)

        10% penalty is waived

 

Student Loans Held by the Dept. of Education

       All payments can be suspended through 9/30/20

       0% interest will accrue

 

Federally Backed Mortgage Loans such as FNMA and FHLMC

       180 day forbearance can be requested by the borrower

       No fees, penalties or interest beyond contractual amounts will be added

 

Above-the-Line Charitable Deduction

       Maximum $300 during 2020

       Permitted even if you don’t itemize

       Donations to a donor advised fund don’t count

 Qualified Family Leave

       Employees unable to work or telework who leave for care of a child under age 18 (school or childcare is closed)

       Wages paid 4/1/20 to 12/31/20

       Employed at least 30 days

       First 10 days may be unpaid with use of accrued time and sick leave benefits

       After 10 days, paid leave is required (2/3 of normal gross pay not to exceed $200 / day with a $2,000 max)

       Maximum is 10 weeks and $10,000

 

Qualified Sick Leave

       Unable to work or telework for specific virus-related reasons

       Subject to quarantine, isolation order, advised by health provider to self-quarantine, and experiencing symptoms

       80 hours of paid sick time to full-time employees

       Part-time employees based on average hours worked over a 2 week period

       No limit for length of service

       Regular rate up to a maximum of 10 days at $511 / day not to exceed $5,110 / employee to take care of self

       Regular rate up to a maximum of 10 days at $200 / day not to exceed $2,000 to take care of someone else

 

Qualified Family or Sick Leave General Rules

       Small business (< 50 employees) exemptions are coming

       Increased by portion of qualified health plan expenses

       Increased by 1.45% Medicare tax

       Not subject to 6.2% SS tax

       Refundable tax credit if it exceeds the credit on employer’s payroll tax

       Comparable credits are offered to self-employed individuals (net earnings divided by 260 days)

 

Small Business (generally < 500 employees) Loans (Paycheck Protection Program)($349 Billion)

       Covers employee payroll costs

       Administered by banks who are certified SBA Lenders (guaranteed 100% by SBA)

       Eligible if in operation on 2/15/20 and have employees

       Sole proprietors and independent contractors (self-employed) are eligible and use net Income from self-employment

       Qualified expenditures include payroll, group health care, mortgage interest, rent, utilities, interest on existing debt

       Payroll costs include salary, commission, tips, health care insurance, state unemployment and workers compensation

       Employees and self-employed have qualifying costs up to $100K

       Those having a principal residence outside the US do not qualify

       Utilities include electric, gas, water, transportation, phone, and internet

       6/30/12 is last day to apply or receive a loan but it is first come first serve…move quick!!!

       Loan is 2.5 * monthly payroll costs (over 12 months prior to loan) (special seasonal and industry rules) up to $10 million

       Interest at 1% loan with a 2 year maturity

       Payments will be deferred for a minimum of 6 months from date of loan disbursement

       No collateral, personal guarantees or recourse to owners

       Funds should be used during the covered period in the 8 weeks after loan origination (loan can be forgiven in whole or part)

       Loan principal is forgiven for proceeds used over an 8 week period for qualified costs listed above

       The 8 week period begins on the date of the loan origination

       Expected forgiveness is the amount lender expects borrower to expend

       At least 75% of the loan must be used for payroll costs to have full forgiveness

       Amount forgiven is reduced if FTE headcount declines or salaries decrease

       Start gathering monthly payroll (W-2’s and 941’s) and self-employed information (Sch C and bank stmts) for 2019 and 2020

       Applicant must submit SBA Form 2483 to the bank and whatever forms the bank requires (varies by bank)

 

SBA Economic Injury Disaster Loans (EIDL) (< 500 employees)

       Emergency advance up to $10,000 within 3 days of applying

       Must have been in business as of 1/31/20

       Loans available from 1/31/20 – 12/31/20

       Includes sole proprietors with and without employees

       Can still do the paycheck protection program above but the $10,000 will be applied against the loan

 

Employee Retention Credit

       For employers whose operations were fully or partially suspended as a result of a government order; or

       For employers who had a significant decline in gross receipts (declined by > 50% from same quarter in prior year)

       Employers with ≤ 100 employees, all wages are eligible (limits if >100)

       Refundable payroll tax credit of 50% of wages (IRS Form 7200)

       Up to $10,000 / employee / quarter

       Cannot use this credit and the small business loan above

       Relates to wages paid 3/13/20 – 12/31/20

Employer Payments of Student Loans

       Tax free to the employee with a maximum of $5,250

       Paid by employer for employee

       3/27/20 – 1/1/21

 

Net Operating Loss Expansion

      NOL’s generated in 2018, 2019 or 2020 can be carried back 5 years

      The 80% limit on NOL’s is suspended to fully offset income

 

Business Interest Deduction

      Business interest deduction was increased from 30% of taxable income to 50% of taxable income

 

Qualified Improvement Property Technical Correction

      100% bonus depreciation is permitted on interior improvements for non-residential property

      Retroactive for improvements after 9/27/17 filed on Form 3115 Change in Accounting

 

Loans to Certain Industries (the Big Winners)

      Air and cargo carriers

      Businesses critical to national security

      Hospitals

      Many government branches

      Education

 

Ohio Considerations

      Ohio state and cities have delayed filing and payment date to 7/15/20

      Ohio Dept. of Insurance – employees with reduced hours still can have group coverage, health insurance payments can be delayed for 60 days, COBRA and continuation rules are loosened for now

      Ohio unemployment pays 50% of average weekly wage with a $118 minimum / week and a $424 maximum / week for 26 weeks

Clickable Links to HELPFUL REFERENCES

___Coronavirus Aid Relief and Economic Security Act (CARES Act) (3/27/20)
___Families First Coronavirus Response Act (3/18/20)
___IRS People First Initiative
___Loan Forgiveness Details
___SBA emergency $10K advance for EIDL
___DOL Q & A
___SBA Paycheck Protection Program
___IRS Interim Final Rule
___IRS information

The CPA Advisory Group

Reach the CPA Advisory Group by calling 614-942-1990, emailing Info@cpaagi.com, or just filling out the contact form on this site at cpaagi.com/contact/.

 

CPA Advisory Group, Inc.

Leading Small Businesses and Individuals to Success

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