Has your business been impacted by COVID-19? You may qualify for newly created tax credits:

Earlier this week, loans up to $2 million dollars from the Small Business Administration were made available. On Wednesday night, the Families First Corona virus Response Act was signed into law, as well as an adjustment to the IRS tax deadline to July 15th.

 

Unsure of how that affects you and your taxes?

 

It helps individuals and families continue to pay bills without overburdening employers with provisions that:

  • Require employers to provide two weeks (10 days) of paid sick leave for COVID-19-related leave (for a quarantined employee or for the employee to care for a sick person), regardless of how long the employee has been employed.
    • Sick leave compensation for a sick employee is capped at $511 per day, while sick leave compensation for an employee to care for someone else is capped at $200 per day
  • Provide a payroll tax credits to employers in an amount equal to 100 percent of the two-week sick leave wages paid for COVID-19-related leave. This credit is refundable to the extent the amount paid exceeds the quarterly payroll taxes.
  • Provide a refundable tax credit to eligible self-employed individuals who take two weeks (10 days) sick leave in the amount equal to the lesser of:
    • $511 per day or 100% of the average daily self-employment income of the individual for sick individuals; and
    • $200 per day or 67% of the average daily self-employment income of the individual taking care or someone else.
  • Provide for paid family leave for 10 weeks (in addition to the two weeks of sick leave) for employees with minor children who are unable to work due to COVID-19-related school or daycare closure
  • Provide a payroll tax credit, capped at $200 per employee per day and $10,000 total, equal to the amount of qualified family leave wages paid. This credit is refundable to the extent the amount paid exceeds the quarterly payroll taxes.
  • Provide a refundable tax credit to eligible self-employed individuals who take 10 weeks sick leave in the amount of $200 per day or 67% of the average daily self-employment income.

 

It helps keep people healthy with provisions that:

  • Provide additional funds for nutrition and food assistance programs such as WIC and SNAP, as well as a modest amount of funds for any family with children whose school is closed.
  • Require that health insurers will not impose any costs (deductibles, co-payments, or coinsurance) for COVID-19 testing.

Per IRS Notice 2020-17, the Treasury Department has deemed anyone with an income tax payment due on July 15th (relating to the 2019 tax year or Q1 estimated tax payments for the 2020 tax year) as an “Affected Taxpayer” for purposes of the Robert T. Stafford Disaster Relief and Emergency Assistance Act signed into law on March 13. As a result, the filing & payment deadline is postponed – with no penalties or interest – until July 15. However, the maximum amount of tax owed that can be postponed is:

  • $10,000,000 for consolidated groups and C corporations, and
  • $1,000,000 for all other taxpayers.

Ready to discover what tax credits you qualify for? Let’s take 15 minutes to discuss.

J.S.


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