Businesses that have been impacted financially by COVID-19 may be able to take advantage of a new, refundable tax credit called the Employee Retention Credit. The credit is designed to encourage businesses to keep employees on their payroll and is worth 50 percent of qualifying wages up to $10,000 that are paid by an eligible employer.
Answers to Questions about Economic Impact Payments
COVID Tax Tip 2020-44, April 22, 2020
The IRS is issuing Economic Impact Payments. These payments are being issued automatically for most individuals. However, some people who don’t usually file a tax return will need to submit basic information to the IRS to receive their payment.
SBA PPP and EIDL Loan Details Update — April 13, 2020
On March 29, 2020, following the passage of the CARES Act, the SBA provided small business owners and non-profits impacted by COVID-19 with the opportunity to obtain up to a $10,000 Advance on their Economic Injury Disaster Loan (EIDL). The …
Relief for Other Coronavirus-related Tax Issues
Relief for taxpayers facing the challenges of COVID-19-related tax issues is now available through the IRS People First initiative. The projected start date will be April 1 and the effort will initially run through July 15, 2020. During this period, to the maximum extent possible, in-person contact will be avoided; however, the IRS will continue to take steps where necessary to protect all applicable statutes of limitations.
Some of the highlights affecting taxpayers include:
Watch Out for Coronavirus-related Scams
Taxpayers should be on the lookout for calls and email phishing attempts regarding the Coronavirus, or COVID-19 that could lead to tax-related fraud and identity theft. Because criminals take every opportunity to perpetrate a fraud on unsuspecting victims during times of need, taxpayers should also be skeptical about text messages received and websites and social media attempts to request money or personal information.
The Tax-Smart Way to Loan Money to Friends & Family
Offering to lend money to cash-strapped friends or family members during tough economic times is a kind and generous offer, but before you hand over the cash, you need to plan ahead to avoid tax complications for yourself down the road.
Take a look at this example: Let’s say you decide to loan $5,000 to your daughter who’s been out of work for over a year and is having difficulty keeping up with the mortgage payments on her condo. While you may be tempted to charge an interest rate of zero percent, you should resist the temptation.
Here’s why:
Tax Breaks Help Small and Medium-sized Employers
Small and medium-sized employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing coronavirus-related leave to their employees. This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act (Act), signed into law on March 18, 2020.
Subsequent legislation, the CARES Act, includes a provision that delays payment of employer payroll taxes due in 2020 with half due December 31, 2021 and the rest due December 31, 2022.These same dates and amounts apply to tax owed by self-employed individuals as well with 50 percent due December 31, 2021 and the remaining amount not due until December 31, 2022.
SBA COVID-19 Loans and Grant Application Information
Paycheck Protection program The SBA has just released the application for the Paycheck Protection program. This program is for a forgivable loan to help small businesses and self-employed to help pay for payroll, health insurance, rent, and utilities. I have …
What You Need to Know About the Paid Sick and Family Leave Tax Credits
The Families First Coronavirus Response Act (FFCRA) signed on March 18, 2020, made unprecedented expansions to paid sick and family (childcare) leave provisions in light of the challenges for the American workforce due to COVID-19. The expansions to paid sick and family leave cover employers with up to 500 employees, and tax credits are available for up to 100% of qualifying wages paid. Eligible employers are granted a grace period by the DOL to come into compliance with the Act as long as employers act reasonably and in good faith during the grace period.