We hope you and your family are safe and healthy. We want to bring you the most relevant and accurate information, and as the news on tax relief has been evolving daily over this last week here is a summary of what we know now.
We have included a summary below of certain tax relief programs provided by the IRS and the Franchise Tax Board as they stand today. We will monitor the news closely from government agencies and keep you updated on changes and new developments.
Your Haskell & White Team is accessible remotely using the same contacts as before. The first week of this experience has shown that our in-place technological capability is sufficient to allow everyone to work successfully from the comfort and safety of their own home.
Federal Income Tax Return Filing Relief
In a statement just issued by the Secretary of the Treasury, the IRS income tax return filing deadline of April 15, 2020 will be delayed until July 15, 2020. In addition, the Treasury Department and the Internal Revenue Service are providing special payment relief to individuals and businesses in response to the COVID-19 Outbreak.
Federal Income Tax Payment Relief
After initial statements that Taxpayers would be able to defer certain income tax payments of up to $1 million for individuals and $10 million for Corporations, the IRS has removed the limits and expanded the eligible payments. In its latest Notice, the IRS is allowing all income tax payments due with a due date of April 15, 2020 to be deferred until July 15, 2020. There will be no interest or penalties charged as a result of this deferral. This payment relief applies to all individual returns, including self-employed individuals, and all entities. IRS will automatically provide this relief to taxpayers. Taxpayers do not need to file any additional forms or call the IRS to qualify for this relief.
This relief includes 2019 remaining balances due as well as estimated tax payments for tax year 2020 that are due on April 15, 2020.
Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020.
This relief only applies to federal income tax (including tax on self-employment income) payments otherwise due April 15 and now due July 15, 2020, not deposits or payments of any other type of federal tax. State filing and payment deadlines vary and are not always the same as the federal filing deadline. Many states have also provided some form of relief. The IRS urges taxpayers to check with their state tax agencies for those details.
Additional Federal Relief
Congress enacted the Families First Coronavirus Response Act last week, which includes emergency expansions of Paid Sick Leave and FMLA. We will provide additional information soon on this Act. Note that it includes a refundable credit to employers against Social Security taxes to the extent of the paid leave provided. Any excess is refundable. Rules are being drafted by the Labor Department and Treasury on these provisions, but are anticipated to provide employers the ability to hold back an amount of Social Security deposits equal to the estimated credit.
The Senate is currently working on an additional relief Act anticipated to include changes to the tax law which may include proposals for relaxation of current loss limitations and freeing prior year NOL carryovers to be carried back to prior years.
The Franchise Tax Board (FTB) recently announced special tax relief for California taxpayers affected by the COVID-19 pandemic. Affected taxpayers are granted an extension to file 2019 California tax returns and make certain payments until July 15, 2020. Governor Newsom’s March 12 Executive Order initially extended the date to June 15 but was pushed back to be consistent with the federal filing and payment extensions.
This relief includes moving the various tax filing and payment deadlines that occur on March 15, 2020, through July 15, 2020, to July 15, 2020. This includes individuals’ and entities’ 2019 tax returns and income tax payments, as well as 2020 quarterly estimated tax payments.
The FTB will also waive interest and any late filing or late payment penalties that would otherwise apply.
Working Capital Relief
The SBA is offering low-interest loans for loss of revenue and cover working capital. See https://www.sba.gov/disaster-assistance/coronavirus-covid-19 for applicability.
More relief in the form of capital programs is anticipated in current legislation currently being debated in the Senate. We will keep you posted on any developments in Congress.
The Team at Haskell & White is Accessible
We have implemented a work from home arrangement for all of our team members, with current anticipation of us returning to the office on Monday, April 13. Please note that we could reduce or extend this period of time based on how the COVID-19 situation evolves and based on any governmental directives. We are connecting via Teams Chat, Skype, Zoom, High Five, our Portal, and traditional email and conference calls. Please continue to use the phone numbers and email addresses you have on file. Calls are being forwarded to mobile phones. When sending documents we prefer scanned copies or uploading to one of our portals, as opposed to sending hard copies.
We are committed to helping you move your business forward during this time of tremendous uncertainty. If we can be of service to answer any questions or provide you advice, please reach out to your engagement partner or team member. We will continue to provide updates on the information we believe to be relevant to your business. The health and safety of your employees and their families are in our thoughts.
Your Haskell & White Team