On Wednesday evening, the Senate passed a $2 trillion stimulus package which is designed to provide relief for American workers, businesses, hospitals and government which are sorely in need during the coronavirus pandemic. It was approved unanimously by a 96-0 vote, and now must be voted on by Congress. That vote is expected on Friday.
The plan includes:
• A $500 billion loan program for businesses and municipalities.
• Unemployment insurance will be increased by $600 per week for four months, which also applies to gig economy workers, freelancers, and furloughed workers who may be getting health insurance, but aren’t receiving a paycheck.
• Expanded funds for hospitals, medical equipment and healthcare worker protections.
• Increased aid to state and local governments.
• Direct payments to adults below a certain income threshold, based upon the prior years’ tax returns. A one time check of $1,200 will be sent to most adults who earn under $75,000 (single taxpayer) or $150,000 (married filing joint). $500 will be sent to cover every child in qualified households. The $1,2000 phases out as income increases. For every $100 over the limit earned, the amount drops by $5. That means individuals with no children earning over $99,000 and married couples without children earning over $198,000 will not receive a stimulus check.
• Loans to small businesses, the specifics of which are yet to come. We understand that employers would be eligible for loans based on a formula. The loans can be used to cover qualified payroll, interest on mortgage payments, rent and utilities. Companies will be also eligible for loan forgiveness according to a specific formula.
The Treasury Department and the IRS confirmed that for any “person” (individual, trust, estate, partnership, association, company or corporation) with an income tax return or income tax payment due on April 15, 2020, that due date has been postponed until July 15, 2020. To be clear, New York State has agreed to follow the Federal Government and extend the filing deadline to July 15, 2020, however we do not currently have an official notice or link. If you are due a tax refund, you will want to file your tax return as soon as you can. If you owe money, you have until July 15, 2020 to make the payments, without penalty or interest. The relief applies to estimated tax payments which were due April 15 and are also now due by July 15, 2020.
The IRS has unveiled the new People First Initiative to assist taxpayers on a variety of issues ranging from easing payment guidelines to postponing compliance actions.
New York has mandated 100% closure of non essential businesses. A list of essential services can be found here. Sole practitioners, and other businesses with a single occupant/employee are deemed exempt. It is our understanding that law firms and other providers of legal services are essential businesses only to the extent that their services are currently needed to support the essential functions of health care providers, utilities, state and local governments, the federal government, financial institutions, businesses that have been designated an essential; or to support criminal defendants in court proceedings or individuals in family court proceedings; or to participate in proceedings concerning the imminent release or detention of individuals subject to criminal or civil detention under any applicable provision of state or federal law, or proceedings to address emergency risks to health, safety or welfare. This is a relatively new development and will be updated as soon as we receive more information.
To summarize other developments from our earlier Newsbreaks:
• The IRS has implemented a law that provides a dollar-for-dollar tax offset against payroll taxes to businesses with less than 500 employees who provide paid leave due to the Covid-19 virus. Employers can take advantage of two new refundable payroll tax credits for small and mid sized businesses that provide paid leave for workers who are sick with the virus, or care for someone who has the virus.
• New York State has waived penalties and interest for NYS Sales Tax returns which were due March 20. For relief, visit the department’s website. If you receive a penalty notice, follow the instructions on the notice or contact your tax professional.
• The Federal Government has suspended Federal student loan payments for 60 days.
• Governor Andrew M. Cuomo has announced that employers are required to provide job protection and paid sick leave to those who have been quarantined as a result of COVID-19.
• There are resources out there to help small businesses so take advantage of them. New York City has enacted the NYC Employee Retention Grant Program to help retain employees as businesses face decreased revenue. The U.S. Small Business Administration is rolling out federal disaster loans or businesses, private nonprofits, homeowners and renters. The Families First Coronavirus Response extends coronavirus coverage for free testing to Medicaid beneficiaries and group health insurance plans, with no cost sharing.
While accounting firms are considered an essential service, our staff is working remotely part of the time, and alternating time in the office. Someone is in our office at all times, and you can always reach us by phone, email, etc. You can still send us your information electronically, or through our portal, or with FEDEX, USPS, UPS, or arrange for a curbside pickup. We can Skype, FaceTime, or have a Zoom meeting. Don’t forget to connect with us on our website, Facebook, LinkedIn, or Twitter.
Stay safe, and stay healthy, and thank you for being part of the Garibaldi Group family.