Coronavirus Information

Recent Updates
Last updated March 18, 2021

March 17, 2021: The Individual Tax Filing and Payment Due Date for tax year 2020 returns is moved from April 15 to May 17, 2021. This applies to California individual tax filing and payment as well. It does NOT apply to first quarter 2021 ESTIMATED tax payments for federal or California. The first quarter payments are still due April 15, 2021.

 

March 11, 2021: The American Rescue Plan Act – signed in to law March 11, 2021. Key items:

For Individuals

  • Additional Stimulus Payments (Economic Impact Payments/EIP) of $1,400 per adult and per dependent for households with annual income up to $75,000 for single; $112,500 for head of household; and $150,000 for married filing jointly. Payments will completely phase out for households with annul income equal to or more than $80,000; $120,000; and $160,000 respectively.

  • Extension of federal unemployment benefits of $300 per week beginning March 14 through September 6, 2021.

  • Exclusion of the first $10,200 of unemployment compensation from taxable income for households with annual income less than $150,000; retroactively to apply toward unemployment benefits received in 2020.

  • Expanded Child Tax Credit of $3,000 for children aged 6 – 17 years old and $3,600 for children 5 years old and younger. The full credit is available to those households with annual income up to $75,000 for single and $150,000 for married filing jointly; completely phasing out at $95,000 and $170,000 respectively. For those families with income greater than those thresholds, the existing Child Tax Credit of $2,000 per child under 17 has not changed. Other expanded CTC components are:

    • The expanded credit is fully refundable rather than only a portion.

    • The Treasury Department is working on make this expanded credit available as an advance by this summer, meaning families that qualify could begin receiving monthly payments of the credit advance. These advances would be reconciled on your 2021 tax return filing.

    • The expanded credit is currently a temporary increase for tax year 2021 only. There are plans to make it permanent, but we will need to wait and see if Congress makes it so.

  • Premium Tax Credit is expanded for 2021 and 2022, and those that received too high of PTC advances in 2020 will not be required to repay the excess on their tax returns.

  • Other individual provisions:

    • COBRA continuation coverage assistance.

    • Expanded Earned Income Tax Credit for 2021.

    • Expanded paid family leave.

    • Exclusion from taxable income the amount of student loan debt discharged in years 2021 – 2025.

    • Additional funding for Supplemental Nutrition Assistance Program (SNAP.)

    • Extends emergency rental and homeowner assistance.

For Businesses

  • Extends and expands paid sick and family leave credits through September 30, 2021.

  • Provides additional funding for the Paycheck Protection Program (PPP.)

  • Provides additional funding for the Economic Injury Disaster Loan (EIDL.)

  • Extends and expands the Employee Retention Credit (ERC.)

  • Provides a $25 billion Restaurant Revitalization Fund for 2021 through the Small Business Administration (SBA.)

For the General Public

  • Provides additional funding for a COVID-19 national vaccination program, testing, contact tracing, research and development, and the manufacturing of pandemic-related medical supplies.

  • Provides funding to state, local and territorial governments for economic relief and public transportation systems.

  • Provides funding for education, including specific funds for K-12 schools to assist with reopening costs.

 

December 21, 2020: Congress passed new legislation, the Consolidated Appropriations Act 2021, that included much needed COVID-19 relief. Key provisions include:

  • Ensures tax deductibility for business expenses paid with forgiven Paycheck Protection Program (PPP) loan proceeds.

  • $325 billion for a second round of PPP loans along with $20 billion in Economic Injury Disaster Loan (EIDL) grants. States certain businesses that received first round PPP loans are eligible for the second round loans.

  • $166 billion for additional economic impact payments (EIP or stimulus payments) of $600 per person with up to $75,000 prior year AGI or $1,200 per married filing jointly couples with up to $150,000 AGI, plus $600 per child dependent.

  • $120 billion in supplemental federal unemployment benefits of $300 per week from December 26, 2020, to March 14, 2021.

  • $25 billion in emergency rental aid and an extension of the national eviction moratorium through January 31, 2021.

  • $45 billion in transportation funding for airlines, airports, transit systems, state highways, intercity buses and Amtrak.

  • $82 billion in funding for colleges and schools; $10 billion in child care assistance.

  • $22 billion in funding for health-related expenses for state and local governments.

  • $13 billion in funding for emergency food assistance.

  • $7 billion in funding for broadband expansion.

June 5, 2020: Congress passed new legislation changing the requirements surrounding loan forgiveness for the Paycheck Protection Program loans. The Paycheck Protection Program Flexibility Act of 2020 extends the forgiveness period from 8 weeks to 24, changes percentages of payroll/non-payroll costs from 75/25 to 60/40, and changed the loan maturity from 2 years to 5 years (only for those loans originating on 6/5/2020 or later.) See a simple SBA loan comparison chart here.

April 13, 2020: The Treasury Department and the IRS released Notice 2020-23 (pdf) expanding the extended July 15th deadline to 2nd quarter estimated tax payments normally due June 15th(Forms 1040-ES, 1120-W, etc.), Exempt Organization Returns (Form 990 series), Trust and Estate Returns (Form 1041 series), Gift Tax Returns (Form 709 series), and more. This expands relief given in Notice 2020-20 (pdf).

April 10, 2020: IRS Launches Economic Impact Payment (EIP) Registration Web Tools at https://www.irs.gov/coronavirus/economic-impact-payments  to update payment information and check payment status. Tool for "Filers" available by April 17th.

Letter to Clients April 7, 2020

Tax Extensions for 2019 Returns

Tax Filing and Payment Due Dates: The Treasury Department and the IRS per Notice 2020-18 (PDF), along with the California Franchise Tax Board, have automatically extended the April 15th due date to July 15th, 2020. This includes any income tax returns and payments that were due on April 15th. No special extension needs to be filed. At this time, the automatic extension does not apply to excise or estate tax. Notice 2020-20 (PDF) extended filing and payment of gift tax to July 15th, 2020. Notice 2020-22 (PDF) provides that employers may pay qualified sick leave wages and qualified family leave wages (as required by the Families First Act) or qualified wages (pursuant to the CARES Act) using employment taxes that otherwise would be required to be deposited, but without incurring a failure to deposit penalty. For more information, go to: https://www.irs.gov/newsroom/filing-and-payment-deadlines-questions-and-answers

Corona Aid, Relief, and Economic Security Act (CARES Act)

Economic Impact Payments for Individuals and Families: As part of the CARES Act, individuals should receive up to $1,200 each and $500 per dependent under the age of 17 whose Adjusted Gross Income is under certain amounts. The payment will be based upon information on your TY2019 income tax returns or TY2018 if you have yet to file. This is an advance of a refundable tax credit. The advance of the credit will be reconciled on your TY2020 tax returns. This means you may either be due more or need to repay a portion or all of the credit once it is reconciled with your TY2020 income. The Adjusted Gross Income maximum amounts for full credit are $75,000 for individuals and $150,000 for married filing jointly couples. The credit is reduced by $5 of each $100 above those amounts until you reach $99,000 for individuals and $198,000 for MFJ couples, at which point the credit is completely phased out (unavailable.) For more information regarding these payments go to: https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know

CARES Act Temporary Business Loan Programs: The act established two new funding programs through the Small Business Administration (SBA) to help small businesses through the economic turmoil associated with the COVID-19 outbreak. Click here for a comparison of the Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP).

Families First Coronavirus Response Act (FFCRA)

FFCRA For Employers: Certain employers are to provide two weeks (up to 80 hours) of paid sick leave to qualifying employees. Covered employers qualify for a tax credit for qualifying wages paid under FFCRA. For more information, go to https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave

Additional Resources

For additional questions, please e-mail Jennifer at jcswayne@rosevilletax.com