COVID-19 BUSINESS AND TAX DEVELOPMENTS
We sincerely hope that you are weathering these troubling times safely and in good health. We’ve received numerous calls regarding how to benefit from the efforts of the federal government’s response to Covid-19. The landscape is changing daily, and we will do our best to provide updates to you as they become available.
Last week, the IRS extended the deadline of all taxpayers with an April 15 deadline to July 15. This is an extension to file as well as pay. This extension includes individuals, trusts, and corporations, and applies to taxes due for 2019 as well as first quarter payments for 2020. Mississippi has only extended their deadline until May 15. If you file in Mississippi, this means we will need to get your tax return filed or extended by May 15 to avoid any interest and penalties.
Payroll Tax Assistance
The Families First Coronavirus Response Act is the only legislation as of this writing that has been signed into law. It provides prompt reimbursement for small businesses that pay sick leave to employees ill with the virus or caring for children or other family members due to school or childcare closures. For sick individuals, the credit covers 100% of the employee’s regular rate of pay up to $511 per day for up to 10 days. For employees caring for sick individuals or children who are impacted because of school or childcare closure, the credit will pay up to $200 per day for up to 12 weeks. The credit will be processed on a reimbursement basis. Employers electing to pay these credits will be reimbursed by reducing the amount of payroll taxes that they pay in, and if that’s not enough, they will receive a refund from the IRS. Your payroll processor will handle the reimbursement for this credit.
Small Business Loans
The Small Business Administration has approved up to $2 million in long term low-interest loans for working capital and payroll. Some of our clients are struggling meeting ongoing expenses while revenues have been reduced. This problem is what the SBA loans are for. You might contact your local banker and ask about an SBA loan to tide you over until business picks back up.
Many banks are offering deferrals or the ability to restructure existing loans.
We will post more updates as they become available. Good luck to you. Please callus with any questions or if we can assist in any way.