COVID-19 Tax Relief and Paid Leave – What You Need to KnowPosted on May 19th, 2020
With schools and businesses shuttering to help combat the spread of the Coronavirus, there have been increased talks of paid leave for employees affected by the outbreak, tax extensions and deadlines. While the information has been changing almost daily since President Trump announced a National Emergency on Friday, March 13, 2020, we wanted to share with you some important information, as it currently stands, and will continue to update you as more information is released.
Penalty and Interest Waiver
On March 17, 2020, Treasury Secretary Steven Mnuchin announced the new deadline for tax payments is July 15, however, the filing deadline will remain April 15. The waiver only applies to individual taxpayers who owe less than $1 million in taxes and corporations owing less than $10 million in taxes. It is important to note the waiver also does not extend deadlines for Roth IRA/traditional IRA/HSA contributions which still has an April 15th deadline.
There still has not been an announcement regarding the quarterly estimated payments due April 15, 2020 and June 15, 2020. UPDATE: On March 18, 2020 the Franchise Tax Board announced the following: FTB is postponing until July 15 the filing and payment deadlines for all individuals and business entities for 2019 tax returns; 2019 tax return payments; 2020 1st and 2nd quarter estimate payments; 2020 LLC taxes and fees; and 2020 Non-wage withholding payments.
This update refers only to California, the deadline for federal tax returns is still April 15, 2020, however, a bill was introduced in the Senate today (March 19, 2020) that would push the federal filing deadline from April 15, 2020 to July 15, 2020. We will monitor the situation and post more information as it is released. UPDATE: On Friday, March 20, 2020 the Treasury Department and the IRS announced the tax filing deadline has now been extended to July 15, 2020.
Click here to read the full release.
For more information, you can read about the formal guidance issued by the IRS here.
On March 14, 2020 the House passed the Families First Coronavirus Response Act (H.R. 6201) with an amended version passed by the House on March 16, 2020. The current bill increases funding for testing and extends paid sick leave to employees affected by the virus. The Senate passed the House’s bill on March 18, 2020 and President Trump is expected to sign.
The bill requires employers with fewer than 500 employees to provide paid sick leave to employees who are forced to stay home due to infection or care for a family member (“qualified paid sick leave”) or due to quarantining (“qualified family leave”). The bill compensates employers and the self-employed for this paid leave in the form of a tax credit.
For a summary of the bill, please click here.
As you are likely aware, the entirety of the State of California is under executive order from the Governor to remain at home whenever possible, with limited exceptions. With the announced extensions of the filing and tax payment deadlines for federal and CA purposes to July 15, and in response to the Governor’s order, our physical office location is now closed in order to further encourage the social distancing measures recommended by the CDC to slow the spread of Coronavirus. As more information develops about the extended filing and tax payment deadlines, we will forward that critical information to you.
Rest assured though that we are conducting business and serving our clients during this unprecedented time, albeit with a remote workforce. We remain open and available by phone, email and other electronic means, and encourage the use of secure electronic document delivery whenever possible, both to upload items we need to continue our work on your behalf, as well as transmitting sensitive material to you. Doing so will protect you, our employees, and our other clients and friends of the firm from additional risk of exposure and help us comply with the intent of the Governor’s order. If you must either deliver or pick up materials in person, or by mail or delivery service, please call 951-676-6555 to make arrangements for delivery.
Your health and safety, along with our employees and their families, is of paramount importance to us. Please don’t hesitate to contact us with any questions you may have as we work together through the effects of the pandemic in our community.
Thank you for your continued business, and look very much forward to the day when these restrictions are no longer needed.