Axley & Rode, LLP

May 5 is the deadline for certain Veterans Administration and Supplemental Security Income benefit recipients to claim Economic Impact Payments (EIPs) for children this year. The deadline applies to parents who haven’t filed a tax return for 2018 or 2019. To claim an additional $500-per-eligible-child benefit, they should visit the “Non-Filer: Enter Payment Info Here” tool on IRS.gov. If they enter information in the tool about themselves and their qualifying children soon, the IRS advises, they’ll receive the extra $500 automatically. Otherwise, they’ll only receive their $1,200 individual payments at this time, and the additional amount will be paid after they file a 2020 return next year.

If you’re eligible for an Economic Impact Payment (EIP) but you haven’t yet received it, you may be wondering why. It could be because you haven’t filed your 2019 income tax return. Under the Coronavirus Aid, Relief and Economic Security (CARES) Act, tens of millions of EIPs have already been delivered. But the IRS says that if you have a filing requirement for 2018 or 2019, you must file to receive your EIP. Although the 2019 filing deadline has been postponed from April 15 to July 15, you may want to file sooner to get your EIP sooner. How do you know if you have a filing requirement? The IRS has created an Interactive Tax Assistant to help you find out:  https://bit.ly/2YnvTIR  

The U.S. Department of Labor recently issued temporary regulations implementing the emergency paid sick and family leave provided under the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Here are some highlights of the regs’ impact on group health plans. Maintenance of coverage Employers must maintain group health plan coverage on the same terms as if an employee didn’t take paid sick or family leave and remained employed during the leave period. For instance, if an employee with family coverage takes paid sick or family leave, family coverage must be maintained during the leave. The same group health plan benefits must be provided to the employee (and covered family members) as before the leave — including medical, surgical, hospital, dental, eye care, and mental health and substance abuse coverage. These requirements also apply to benefits provided through a supplement to a group health plan, whether provided throug

The Social Security Administration has provided guidance for Social Security recipients using the IRS “Non-filers” website to report information needed to receive Economic Impact Payments (EIPs). Specifically, those with Direct Express debit cards who enter information at the IRS’s website must complete all of the mandatory questions, but they may leave the bank account information blank as the U.S. Treasury already has their Direct Express information on file. In addition, new Social Security recipients as of Jan. 1, 2020, who didn’t file a tax return for 2018 or 2019, will also need to use the IRS “Non-filers” website as they won’t automatically receive EIPs.

The law providing relief due to the coronavirus (COVID-19) pandemic contains a beneficial change in the tax rules for many improvements to interior parts of nonresidential buildings. This is referred to as qualified improvement property (QIP). You may recall that under the Tax Cuts and Jobs Act (TCJA), any QIP placed in service after December 31, 2017 wasn’t considered to be eligible for 100% bonus depreciation. Therefore, the cost of QIP had to be deducted over a 39-year period rather than entirely in the year the QIP was placed in service. This was due to an inadvertent drafting mistake made by Congress. But the error is now fixed. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020. It now allows most businesses to claim 100% bonus depreciation for QIP, as long as certain other requirements are met. What’s also helpful is that the correction is retroactive and it goes back to apply to any QIP placed in service after December 31, 2017.

Millions of eligible Americans have already received their Economic Impact Payments (EIPs) via direct deposit or paper checks, according to the IRS. Others are still waiting. The payments are part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Here are some answers to questions you may have about EIPs. Who’s eligible to get an EIP? Eligible taxpayers who filed their 2018 or 2019 returns and chose direct deposit of their refunds automatically receive an Economic Impact Payment. You must be a U.S. citizen or U.S. resident alien and you can’t be claimed as a dependent on someone else’s tax return. In general, you must also have a valid Social Security number and have adjusted gross income (AGI) under a certain threshold. The IRS also says that automatic payments will go to people receiving Social Security retirement or disability benefits and Railroad Retirement benefits. How much are the payments? EIPs can be up to $1,200 for individuals, or $2,400 for married couple

As Economic Impact Payments (EIPs) began to roll out this week, the IRS continues to field questions about eligibility. EIPs are intended to help mitigate the financial effects of the coronavirus (COVID-19). Eligible persons include: most U.S. residents (under certain income levels) who have a Social Security number and aren’t claimed as dependents by other taxpayers. You may be eligible if: you’re employed full or part-time, unemployed, self-employed, retired, disabled, receiving public benefits or have no income. Eligible adults can receive up to $1,200 ($2,400 for married couples) and $500 for each qualifying child. For more details, visit the IRS page here:  https://bit.ly/2XyNsF9

Are self-employed individuals eligible to defer payment of self-employment tax on net earnings from self-employment income? Under the Coronavirus, Aid, Relief and Economic Security (CARES) Act, the IRS states that self-employed persons may defer payment of 50% of Social Security tax due on net earnings from their self-employment income, for the period of March 27, 2020 through Dec. 31, 2020. Also, for any tax year that includes part of the same deferral period, no penalty will be imposed for failure to make estimated tax payments of 50% Social Security tax due on their net self-employment earnings. See questions 9 and 10 of these IRS FAQs on employment tax deferral:  https://bit.ly/2ybKCLV  

The IRS has issued guidance for employers in the form of FAQs on the deferral of deposit and payment of employment taxes under the Coronavirus, Aid, Relief and Economic Security (CARES) Act. Specifically, the law allows employers to defer the deposit and payment of their share of Social Security taxes through Dec. 31, 2020. The IRS states that the FAQs will be updated to address additional questions as they arise. Read the FAQs here:  https://bit.ly/2V8Njql

The IRS has issued guidance providing relief from failure to make employment tax deposits for employers that are entitled to the refundable tax credits provided under two laws passed in response to the coronavirus (COVID-19) pandemic. The two laws are the Families First Coronavirus Response Act, which was signed on March 18, 2020, and the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, which was signed on March 27, 2020. Employment tax penalty basics The tax code imposes a penalty for any failure to deposit amounts as required on the date prescribed, unless such failure is due to reasonable cause rather than willful neglect. An employer’s failure to deposit certain federal employment taxes, including deposits of withheld income taxes and taxes under the Federal Insurance Contributions Act (FICA) is generally subject to a penalty. COVID-19 relief credits Employers paying qualified sick leave wages and qualified family leave wages required by the Families First Act, as we

In the midst of the coronavirus (COVID-19) pandemic, Americans are focusing on their health and financial well-being. To help with the impact facing many people, the government has provided a range of relief. Here are some new announcements made by the IRS. More deadlines extended As you probably know, the IRS postponed the due dates for certain federal income tax payments — but not all of them. New guidance now expands on the filing and payment relief for individuals, estates, corporations and others. Under IRS Notice 2020-23, nearly all tax payments and filings that would otherwise be due between April 1 and July 15, 2020, are now postponed to July 15, 2020. Most importantly, this would include any fiscal year tax returns due between those dates and any estimated tax payments due between those dates, such as the June 15 estimated tax payment deadline for individual taxpayers. Economic Impact Payments for nonfilers You have also likely heard about the cash payments the federal governm

The IRS is providing more details about the cash payments the government is making to ease the economic impact of the coronavirus (COVID-19). The tax agency announced that it will send letters to recipients about the payment within 15 days after the payments are made. For security reasons, the IRS explained that it plans to mail a letter to a recipient’s last known address. The letter will provide information on how the payment was made (for example, in a specific bank account) and how to report any failure to receive the payment. The cash payments are being made to eligible people under a certain adjusted gross income threshold. For more information: https://bit.ly/2Vg3qkQ  

By now, most employers have presumably read up on the basic tax relief and financial assistance aspects of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. What you may not have heard much about is how the law affects employer-sponsored benefit plans. Here are some highlights of its impact: Coverage mandates Under the Families First Coronavirus Response Act, an earlier law passed in response to the outbreak, health insurers and group health plans were required to cover coronavirus (COVID-19) testing and related provider visits without cost-sharing. The CARES Act has extended this requirement to additional categories of COVID-19 tests — even if not FDA-approved. Health plans and insurers must reimburse the diagnostic testing provider according to any negotiated rate with the provider, or they must pay the provider’s publicized cash price for the diagnostic test in the absence of a negotiated rate. Health insurers and group health plans will have to cover, without cost-sha

The IRS extends more federal tax deadlines. The extension, detailed in Notice 2020-23, includes a variety of tax form filings and payment obligations due between April 1 and July 15. Extended are estimated tax payments due June 15 and the deadline to claim refunds from 2016. The extended deadlines cover individuals, estates, corporations and others. The notice also suspends associated interest, additions to tax, and penalties for late filing or late payments until July 15, 2020. Contact us for more information. Previously, the IRS postponed the due dates for certain federal income tax payments. The new guidance expands on the filing and payment relief.

Scammers seldom miss an opportunity to steal, and the economic crisis brought on by the coronavirus (COVID-19) presents a prime target. As the government prepares to make economic impact payments to millions of Americans, the IRS is urging the public to be on the lookout for calls, emails, texts, websites and social media posts designed to steal personal information. IRS Commissioner Chuck Rettig warns not to open or click on these messages, even if they claim to be from the IRS. “The IRS isn't going to call you asking to verify or provide your financial information so you can get an economic impact payment or your refund faster.” More details are available here:  https://bit.ly/39EgBRE

As we all try to keep ourselves, our loved ones, and our communities safe from the coronavirus (COVID-19) pandemic, you may be wondering about some of the recent tax changes that were part of a tax law passed on March 27. The Coronavirus Aid, Relief, and Economic Security (CARES) Act contains a variety of relief, notably the “economic impact payments” that will be made to people under a certain income threshold. But the law also makes some changes to retirement plan rules and provides a new tax break for some people who contribute to charity. Waiver of 10% early distribution penalty IRAs and employer sponsored retirement plans are established to be long-term retirement planning accounts. As such, the IRS imposes a penalty tax of an additional 10% if funds are distributed before reaching age 59½. (However, there are some exceptions to this rule.) Under the CARES Act, the additional 10% tax on early distributions from IRAs and defined contribution plans (such as 401(k) plans) is waived f

The recently enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act provides a refundable payroll tax credit for 50% of wages paid by eligible employers to certain employees during the COVID-19 pandemic. The employee retention credit is available to employers, including nonprofit organizations, with operations that have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings. The credit is also provided to employers who have experienced a greater than 50% reduction in quarterly receipts, measured on a year-over-year basis. IRS issues FAQs    The IRS has now released FAQs about the credit. Here are some highlights. How is the credit calculated? The credit is 50% of qualifying wages paid up to $10,000 in total. So the maximum credit for an eligible employer for qualified wages paid to any employee is $5,000. Wages paid after March 12, 2020, and before Jan. 1, 2021, are eligible for the credit. Therefore, an employer may

Employers should report the employee retention tax credit on their returns for the 2nd quarter of 2020. The Coronavirus Aid, Relief, and Economic Security (CARES) Act supports certain employers that operate a business during 2020 and retain employees, despite experiencing economic hardship related to the COVID-19 crisis. The refundable employee retention credit is equal to 50% of qualified wages (up to $10,000) paid to employees after March 12 and before Jan. 1. Employers that paid any qualified wages between March 13 and March 31 can include 50% of those wages together with 50% of any qualified wages paid during the second quarter of 2020 on their 2nd-quarter Form 941, 941-SS, or 941-PR.

A provision in the Coronavirus Aid, Relief, and Economic Security (CARES) Act raises the limits on business contributions of food inventories to charities. The law, signed on March 27, specifies that the donation must be made to a charity that will use it for the care of the ill, the needy or infants. The donation is deductible in an amount up to the basis plus half the gain that would be realized on the sale of the food (not to exceed twice the basis). For C corporations, the deduction can’t exceed 15% of income. For other companies, the deduction can’t exceed 15% of the taxpayer’s aggregate net income for that tax year from all trades or businesses. Additional rules apply; contact us.

It's no secret that, in coming weeks, the U.S. Treasury Dept. and the IRS will be sending out cash payments to eligible people to ease the economic impact of the coronavirus (COVID-19). Yet, confusion remains. In a press release, the agencies announced that Social Security (SS) beneficiaries (who don’t exceed income limits) qualify automatically for payments, even if they don’t otherwise have to file tax returns. For SS recipients who didn’t file 2018 or 2019 tax returns, the IRS will use information on Form SSA-1099 to distribute up to $1,200 payments in the same way recipients get their monthly SS benefits, either by direct deposit or paper check. Here’s more:  https://bit.ly/3dQuaRu

The coronavirus (COVID-19) outbreak has changed the way most employers are interacting with their employees. Many organizations have sent employees home to work remotely, but this isn’t feasible in every industry. If you still need to run an office or operate a facility with employees on-site, you may wonder what you’re legally allowed to do in terms of screening workers for the illness. In March, the Equal Employment Opportunity Commission (EEOC) issued guidance in the form of a revised publication originally created during the H1N1 outbreak. Based on that guidance, here are steps you can take regarding screening employees for COVID-19: Perform body temperature checks of employees who come into work Under normal circumstances, employers would be restricted from conducting medical examinations and inquiries under workplace anti-discrimination laws — notably, the Americans With Disabilities Act (ADA) and the Rehabilitation Act. But the EEOC has stated that employers covered by the ADA m

Relief is granted for failing to make employment tax deposits due to coronavirus (COVID-19). IRS Notice 2020-22 provides relief to employers entitled to refundable tax credits under the Families First Coronavirus Response Act (FFCRA) and the “Coronavirus Aid, Relief, and the Economic Security (CARES) Act.” Normally, tax law imposes a penalty for failing to deposit amounts as required on prescribed dates, unless there is reasonable cause. There’s now relief from the penalty for failing to timely deposit employment taxes to the extent the amounts are equal to or less than the refundable tax credits an employer is entitled to under the FFCRA and the CARES Acts. Contact us for more info.

When will coronavirus (COVID-19) payments from the government arrive? Do you have questions about the CARES Act’s “economic impact payments?” For eligible individuals, these are up to $1,200 for singles and $2,400 for married couples filing jointly (plus $500 for each eligible child). The IRS has announced that the distribution of payments will begin in the next three weeks and will be distributed automatically, with no action required for most taxpayers. However, people who didn’t file 2018 or 2019 federal income tax returns will need to submit “a simple tax return” to receive a stimulus payment. Contact us for help filing a return. For more information:  https://bit.ly/2R2DDeR

The CARES Act, authorizes a $300 “above-the line” charitable tax deduction for individuals who don’t itemize. This will give a slight boost to taxpayers who donate to charity and the charities they donate to. The new law adds the deduction for tax years starting in 2020. For the last couple of years, under the Tax Cuts and Jobs Act, only individuals who itemized could get a deduction for charitable gifts, and far fewer individuals have been itemizing because of the increased standard deduction. The new deduction only applies to cash contributions. The contribution can’t be used to establish a donor-advised fund or maintain an existing one.

The CARES Act contains several new Small Business Administration (SBA) loan and debt relief programs, including the Paycheck Protection Program, Economic Injury Disaster Loans and SBA debt relief for small and large businesses suffering economic damage because of the coronavirus (COVID-19) pandemic. A new SBA website details the new programs and loans and provides online applications for Economic Injury Disaster Loans and Low-Interest Disaster Loans. The site also includes information about the Express Bridge Loan Pilot Program, which allows small businesses who currently have a relationship with an SBA Express Lender to access up to $25,000. Visit the site at  https://bit.ly/2JwY3bC

On March 27, President Trump signed another coronavirus (COVID-19) relief law titled the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Among other things, the CARES Act provides recovery rebates of up to $1,200 for singles and $2,400 for married couples filing jointly (plus $500 per qualifying child) subject to income-based phaseouts. It also waives the 10% penalty tax on early retirement account withdrawals for COVID-19-related distributions and temporarily waives the required minimum distribution rules for certain retirement accounts. Contact us for more information.