CARES Act Developments and Observations – Update

My last article from April 7 was an observation on how the March 27 CARES Act was unfolding from a few perspectives. This article is a follow up on that – what I’ve seen over the last week and what that could mean for you. As I’ve said before, brace yourself for obsolesce by the time this writing makes it to you.

I also want to acknowledge the numerous kind, informative, and sometimes humorous responses from my readers over the last few weeks in response to these articles. Thanks, guys! It’s so nice to hear from you all.

Best,

 

Alicyn


Paycheck Protection Program (PPP)

I’m still seeing strong interest in this loan for businesses, non-profits, and self-employed individuals. This program remains riddled with administrative “glitches,” but I am hearing that some folks have received funding. If you have questions or are looking for a lender that is accepting applications let me know and I will help as best as I’m able.

In lieu of this loan, or possibly in addition to it, the deferral of payroll tax payments and/or the Employee Retention Credit remain available.

Emergency Economic Injury Grant (EEIG)

This program was designed to be a $10,000 advance on the CARES Act’s Economic Injury Disaster Loan to be received within 3 days of application. Even if the EIDL application was ultimately denied by the lender or the loan refused by the applicant, the advance of $10,000 was not required to be repaid. However, instead of being granted at $10,000 per applying business, funds have instead been disbursed at $1,000 per employee up to $10,000 per business. Although I know of businesses who have received this advance, funds have not been received by all applicants or in the full amount. In short, this program was pretty much a bust the way it played out.

Extended Tax Due Dates

After significant urging from the tax community, the IRS finally issued a blanket extension for many income and information tax returns due from April 1, 2020-July 15, 2020 to July 15, 2020. The list of the filings covered is too long to include here, but comprises income tax returns for businesses, individuals, trust, estates, and non-profits. Whatever type of income tax return you file, if the due date (including extension) falls between April 1 and July 15, the new deadline is very likely now July 15. You do not have to file an extension , but submitting one is not a bad idea if you expect to not make the July 15 filing deadline. Reminder: If your payment is due July 15, that remains the case even if you file your tax return after July 15. If you are a client and have a question on the due date of your particular 2019 tax return, please reach out.

IRS has also stated that the 2nd quarter estimated tax payments are now also due July 15. We were otherwise going to have an odd situation where 1st quarter payments – normally due April 15 – would be due July 15, while 2nd quarter payments would still be due on their normal date of June 15. In short, federal estimated tax payments otherwise due April 15 and June 15 are now both due July 15.

Economic Impact Payments

For individuals who do not file income tax returns and do not receive Social Security retirement/income payments, consider providing the IRS with sufficient information to receive the $1,200/$2,400 economic impact payment. You can do so here. If you’re one of my clients, this is unlikely to be you, but someone you know could potentially benefit from this payment. Please take a moment to think about the people in your life and if any may benefit from learning about the program and require any assistance filling out the form. It’s easy to take for granted that everyone has internet access and will be able to complete a short form if they’re monetarily incentivized, but this is simply not the case. If you know of someone who needs help and you need my help to help them, please let me know and I will do what I can.

With so many people providing their information to the Internal Revenue Service online and possibly for the first time, there’s significant opportunity for bad actors to lead unsuspecting folks down the wrong path. Here are my tips for being on guard for this now and in the future.

  1. The IRS’ website is https://www.irs.gov/. Always start there even if someone provides you a more direct link. A website ending in .com, .net, etc. is not going to be the real IRS.
  2. The IRS does not email you out of the blue. If you receive an email claiming to be from the IRS and you have not had any recent interaction with the IRS that would cause you to be expecting such an email, do not click on the email and delete it. If you’re able, report the email to phising@irs.gov or the US Department of Treasury’s COVID-19 scam reporting site. (The IRS is a division of the Department of Treasury.)
  3. The IRS rarely calls or visits taxpayers out of the blue. For now and the foreseeable future, the IRS is pretty much shut down other than processing electronic returns, refunds, and the economic impact checks. You really shouldn’t be expecting any form of communication from the IRS these days.

Georgia Department of Revenue

While the IRS is shut down, the Georgia DOR is still up and running. I can’t say for certain if the general phone lines are open, but the tax practitioner’s hotline is. Staff are working from home, and I get the impression that’s new for them. However, I’ve called a couple of times in the past week and had matters resolved satisfactorily. Response options will vary by state, but if you are a client with a state tax issue, please let me know as we may be able to handle it sooner rather than later.

Vehicle registrations expiring between March 16th and May 14th are extended through May 15th.

More information regarding how the IRS’ extended 2019 due dates is impacting payments and filings with Georgia can be found at the state’s FAQs here.

Georgia Unemployment

The Georgia Department of Labor appears to be mostly ready for the changes under the CARES Act. Self-employed individuals can now apply online starting here. Per the website, the Georgia DOL requests 2019 tax returns as the equivalent “proof of wages” that would apply to an applicant who had been an employee. For any of my clients who are both interested in applying for unemployment benefits and have been sitting on their 2019 tax returns for various good reasons, let’s get those returns filed. As a reminder, you can still wait until July 15th to pay 2019 taxes owed even if your 2019 tax return is filed before then.

Please balance the previous paragraph against the fact that Georgia is the top state in the country for rising unemployment claims. Applying is likely going to be a time-consuming process with technological hiccups and administrative backlog.

Takeaways

As I’ve said before, practicing persistence, diligence and patience is the name of the game.

If you are a client and you have any concerns, please don’t hesitate to reach out. Or if you have pics of your kids, grandkids and pets being totally cute, by all means send them over!

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