What is the deadline for filing my 2019 income taxes?
Calendar year Corporate taxpayers that normally must file by April 15 have had their due date extended automatically to July 15, 2020. Fiscal year filers still must file at the normal due date. Partnerships and S-Corporation income tax returns were due on March 15, 2020 and are currently considered late if a timely extension was not filed. The IRS has indicated they will be lenient in applying reasonable cause relief for failure to timely file extensions.
When do Corporations owe 2019 balances due? What about 2020 estimated taxes?
The IRS has also extended the deadline for making 2019 balance due payments until July 15, 2020, interest and penalty free. There are no limits on the amounts deferred to July 15, 2020. First quarter and second quarter 2020 estimated tax payments are also now deferred interest and penalty free until July 15, 2020. Third and fourth quarter payment due dates remain unchanged at September 15 and December 15, 2020 for calendar year taxpayers.
What tax relief provisions have passed to help businesses experiencing hardships due to COVID-19?
There have been many recent changes passed as part of the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief and Economic Security Act (CARES) recently passed. These include:
- Payroll tax credit for mandatory emergency sick leave and emergency family medical leave paid to eligible employees
- Employee retention credit for Employers impacted by COVID-19
- Delay of payment due date for the Employer portion of certain payroll taxes
- Temporary modification of the rules for deducting and carrying back net operating losses (NOLs)
- Temporary modification of the excess business loss rules
- Corporate Minimum Tax Credit changes
- Temporary modification of the deductibility of interest expense changes
- Technical correction for the tax treatment of Qualified Improvement Property (QIP)
- Changes to Small Business Administration (SBA) loans, eligibility, terms, and more
We are experiencing a substantial decrease in revenue due to COVID-19—what can we do to get relief as soon as possible?
You have several options available. Apply for an Economic Disaster Injury Loan (EIDL) with the SBA and requesting an advanced Emergency Economic Injury Grant for $10,000. The grant will be provided within three days of applying for the loan and does not need to be repaid if you are ultimately found ineligible for the EIDL program. Applying for both the EIDL and Paycheck Protection Program (PPP) loans may make the most sense. You can refinance any EIDL loan into a PPP loan if you are subsequently approved for the PPP loan.
You may also be eligible to defer the employer portion of payroll taxes for employees (Social Security portion) effective as of March 27, 2020 and not be required to deposit this with the federal government on your normal deposit schedule. The IRS is also expected to issue more information to obtain advanced refunds or credits for the Employee Retention Credit or credits available for mandatory emergency sick leave or emergency family medical leave. Note that many of these new relief options have overlapping provisions or exclusions that prevent “double dipping” so we strongly suggest you contact your Wheeler Accountants advisor for more information.
Can I amend my 2018 or 2019 return to get immediate relief from any of the new laws?
Some of the new provisions do permit you to amend 2018 or 2019 filings, if not already filed, to claim benefits. Please call or e-mail us to discuss.
Can I stop depositing payroll taxes now?
No. You must still deposit payroll taxes, except for the specific taxes eligible for deferral under the new CARES Act. Deferral is also not available if you receive debt forgiveness under the PPP program, however it is available if you receive an EIDL or PPP loan, but do not receive forgiveness, or it is available on amounts not forgiven.
Is there any way to claim some of the payroll tax credits sooner than when I file my quarterly payroll tax filings?
The IRS has recently released a draft of Form 7200 that you can file to request advanced payment of the credits.