Provided by Michael Hadjiloucas of EisnerAmper LLP.
Below are some IMPORTANT announcements from the IRS and the Families First Coronavirus Act signed by President Trump on March 18, 2020.
1= Brief comments from IRS Notice 2020-18 (March 20, 2020):
- April 15 Tax deadline extended until July 15
- ALL payments are deferred – (for extension and 1st quarter 2020)
- NO limit on amount
- No need to file an extension until then
2 = Brief tax pointers from Families First Coronavirus Response Act (For employers with less than 500 employees)
- Establish a federal emergency paid leave benefits program to provide payments to employees taking unpaid leave due to the coronavirus outbreak.
- Expand unemployment benefits and provide grants to states for processing and paying claims.
- Require employers to provide paid sick leave to employees.
- Establish requirements for providing coronavirus diagnostic testing at no cost to consumers.
- Provide new tax credits/refunds to offset new costs associated with paid emergency leave and sick leave benefits
- Provide credit/refund for health plan expenses associated with emergency and sick leave wages.
Some pointers from IRS announcement (IR 2020-57 on March 20,2020):
- For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded paid child care leave when employees' children's schools are closed or child care providers are unavailable.
- Employers receive 100% reimbursement for paid leave pursuant to the Act.
- Health insurance costs are also included in the credit.
- Employers face no payroll tax liability. / Self-employed individuals receive an equivalent credit.
- Reimbursement will be quick and easy to obtain.
- An immediate dollar-for-dollar tax offset against payroll taxes will be provided
- Where a refund is owed, the IRS will send the refund as quickly as possible.
Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or child care is unavailable in cases where the viability of the business is threatened.
Requirements subject to 30-day non-enforcement period for good faith compliance efforts.
To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week.
For further information, please refer to our COVID-19 Resource Section.