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Coronavirus (COVID-19) Update

In an effort to keep our clients updated on the tax-related provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020, the following information is a summary of the different laws and resources that have been made available. We will continue to update this information with additional guidance and links to resources as they become available. Please consult your tax advisor for additional information and resources as updates to these new laws are changing frequently.


Recovery rebate: Under the CARES Act, eligible individuals are allowed an income tax credit of $1,200 per adult and $500 per qualifying child. The credit is reduced if the taxpayer’s adjusted gross income on the 2019 tax return (or 2018 return if you have not filed for 2019) is more than $75,000 (individual), $112,500 (head of household), or $150,000 (joint). You do not have to do anything to receive this credit. The rebates will be paid out in the form of checks or direct deposits. Most individuals won’t have to take any action to receive a rebate. IRS will compute the rebate based on a taxpayer’s tax year 2019 return (or tax year 2018, if no 2019 return has been filed).


Families First Coronavirus Response Act: Beginning April 1st, employers with less than 500 employees are required to provide up to two weeks (80 hours, or a part-time employee’s two-week equivalent) of paid sick leave and up to 10 weeks more of partially paid expanded family medical leave for COVID-19 related reasons, including lack of child care. There are two credits available for eligible employers to cover the costs of this paid leave. Additional information about this requirement, including posters which can be printed and hung in your workplace is available through the Department of Labor

Employee Retention Credit for Employers: Eligible employers can qualify for a refundable credit against the employers 6.2% portion of the Social Security payroll tax for 50% of certain wages paid to employees during the COVID-19 crisis. To be eligible for the credit, the employer’s operations must have been fully or partially suspended as a result of a government order limiting commerce, travel, or group gatherings, or they must have experienced a greater than 50% reduction in quarterly receipts, measured on a year-to-year basis. The wages include health benefits and are capped at the first $10,000 in wages paid to an employee. The credit is provided for wages paid after March 12, 2020 through December 31, 2020 and do not include wages taken into account for purposes of the payroll credits provided by the earlier Families First Coronavirus Response Act for required paid sick leave or required paid family leave.

Delay of Payment of Employer Payroll Taxes: Taxpayers (including self-employed’s) will be able to defer paying the employer portion of social security taxes through the end of 2020, with all 2020 deferred amounts due in two equal installments, one at the end of 2021, the other at the end of 2022.

Small Business Administration Loans: The SBA is offering several programs and initiatives for small businesses during this time, two of importance to consider are the Paycheck Protection Program which provides capital to cover the cost of retaining employees, facilities and interest on debt. Employers that maintain employment for the eight weeks after the origination of the loan, or rehire employees by June 30th, would be eligible to have their loans forgiven. The second which provides a quick infusion of cash (up to $10,000) to cover you right now is the Emergency Economic Grant.

A list of current programs are available through the Small Business Administration. We suggest that you contact your local banker about the SBA loans and other relief options as funds may only be available on a first come basis.

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