This article was originally published on March 18th and is being updated as new information becomes available.
Amidst the uncertain environment due to coronavirus (COVID-19), we created this FAQ page to help our clients and friends of the firm stay current on matters that affect their businesses, employees, and their own finances. This page will be continually updated as new information becomes available.
Please note that many of these topics cannot simply be addressed from the accounting side of your business. We are encouraging our clients to involve not only us, but also their lawyers and their bankers and other business advisors in communications and decisions regarding the issues below.
What does the payment extension mean?
On March 17, 2020, Secretary Mnuchin announced that the IRS will allow:
- individuals to defer federal income payments of up to $1 million for 90 days without incurring interest or penalties
- corporations will be allowed to defer up to $10 million in federal income tax payments for the same 90 day period without incurring interest or penalty
Does the extension apply to State returns as well?
The AICPA has a running document of all of the current state tax updates affected by COVID-19: AICPA State Tax Filing Relief Chart for Coronavirus
Do I still have to file a tax return by April 15?
Friday, March 20, Treasury Secretary, Steven Mnuchin, announced on Twitter that the upcoming April 15th tax deadline will be postponed until July 15th. All individuals and corporations will now have additional time to file and will not be required to file an extension next month. Details about this announcement can be found here.
We recommend still planning to file by your original timeline, especially if you expect a refund. Taxpayer refunds will continue to be processed, and taxpayers are encouraged to still file their return by April 15. According to the IRS FAQ page, most refunds are issued in less than 21 calendar days.
Does this change or delay affect those who pay quarterly tax payments?
Notice 2020-17 extends the period of time to pay estimate payments due 4/15/20 until 7/15/20. It is possible further guidance will address other estimated tax payments.
Why did they extend the payment deadline for 2019 taxes?
The intent behind the tax liability payment extension is to help stimulate the American economy, which has been significantly affected by the COVID-19 pandemic.
What kind of credits might I get from the loss of income resulting from forced closures of my business?
Is there an extension on payroll tax deposit requirements?
Under current guidance, there is no evidence of an extension on payroll tax deposit requirements.
Legislation & Relief Options
What’s going on with student loans?
On March 13, President Trump announced that he would waive student loan interest amid the coronavirus crisis. On March 20, the Department of Education released an announcement clarifying the policy change. For now, federal student loan borrowers will be able to put off two monthly loan payments. Additionally, interest will be waived for 60 days, starting retroactively on March 13.
What are the details of the Families First Coronavirus Response Act (FFCRA)?
What are some resources for me as an affected business owner?
We recommend visiting the U.S. Small Business Administration (SBA)’s Coronavirus (COVID-19): Small Business Guidance & Loan Resources for resources and guidelines for business owners.
What is coming in the CARES Act?
Other Relief: HDHP Coverage
The IRS has published guidance making it clear that high-deductible health plans (HDHPs) can pay for COVID-19-related testing and treatment without putting their status at risk. That means individuals with HDHPs that provide such coverage can continue to contribute to their health savings accounts (HSAs) and deduct the contributions on their 2020 tax returns (or make pre-tax contributions their employer-sponsored HSAs).
Health insurance plans generally must satisfy several requirements to qualify as an HDHP. For example, providing nonpreventive health care coverage without a deductible, or with a deductible below the requisite minimum, would forfeit HDHP status. (Vaccinations are considered preventive care.) The IRS is temporarily suspending this rule to avoid administrative delays or other financial disincentives that could impede testing and treating for COVID-19.
Changes in Workforce
What about unemployment? How does that factor into this?
How do I implement a remote work contingency plan?
Do you have any recommendations for technology to use with a remote workforce?
For organizations that do not already have technology in place to support collaborative working remotely, we recommend Microsoft Teams – which is being offered free for six months right now by Microsoft in response to COVID-19. Learn more about using technology collaboratively through tools like Microsoft Teams here.