U.S. Government Provides Coronavirus Relief

Treasury Provides Tax Relief & President Signs FFCRA

March 20, 2020
3:30 PM CST

This week, the U.S. government announced the passage of two significant relief measures to provide assistance to taxpayers, businesses, and others affected by the ongoing coronavirus pandemic.

1. The Families First Coronavirus Response Act, H.R. 6021
2. Extension of Federal Income Tax Deadline and Payments due April 15, 2020

Additional information on each of these relief measures is as follows.

The Families First Coronavirus Response Act, H.R. 6021 (FFCRA)

The Act (which applies to all government entities and employers with fewer than 500 workers) includes up to 80 hours of emergency paid sick leave for workers who are unable to work due to COVID-19 illness or restrictions, or are caring for school age children due to the closure of schools or child care facilities. The Act also includes paid family and medical leave that employees will be able to use to care for family members (not for personal illness) for up to 12 weeks. The first 10 days of emergency family and medical leave may be unpaid, unless employees opt to use accrued paid time off for those days.

Payroll Tax Credits

The Act subsidizes the cost to employers who are required to provide emergency paid sick leave or FMLA leave due to COVID-19 via payroll tax credits. Tax credits for self-employed individuals may also be available. The credit is equal to 100% of the compensation paid in each calendar quarter, subject to certain limitations.

The FFCRA will take effect on April 2, 2020. For detailed information on the FFCRA, including employer mandates, FMLA amendments, and tax credit limitations, please click here.

Extension of Federal Income Tax Deadline and Payments due April 15, 2020

In response to the Trump Administration’s emergency declaration granting coronavirus relief, Treasury Secretary Steven Mnuchin has announced that the tax filing deadline has been pushed back from April 15 to July 15. The new deadline will give millions of taxpayers more time to fill out their tax forms as the coronavirus upends daily life throughout the country.

We are now waiting on the IRS to release details and the specific guidance. In the meantime, here is what we know now:

• The deadline for federal income tax filing and payments due has been extended to July 15, 2020.
• This delay is available only on federal income tax returns (including self-employment tax returns).
• Interest and penalties will not be imposed on payments made by July 15.
• Individuals and non-corporate filers are allowed to defer up to $1 million of federal income tax payments.
• Corporate filers are allowed a $10 million deferral.
• This delay also applies to the first quarter estimated tax payments. We have not received guidance for second quarter estimated tax payments.
• Taxpayers are still allowed to take advantage of the new payment due date, even if they have already filed their income tax return.
• Only federal income tax returns have been given an extension to July 15. We have not received guidance for 2019 contributions to Health Savings Accounts (HSAs), Individual Retirement Accounts (IRAs), or any other contributions or payments originally due April 15.
• No extension is provided for any other type of federal tax, any other tax filing, or information returns. For example, payroll taxes, sales tax, etc.

Nebraska Income Tax Deadline

The Nebraska Society of CPAs has indicated that they have been in contact with the state tax commissioner on several occasions this week, however there has been no word yet from the Nebraska Department of Revenue. The Society will continue to put pressure on the Department and will provide additional information from the State of Nebraska as soon as it’s released. As that information becomes available, we will update our clients.

Looking Ahead

As we have come to expect under the conditions of the coronavirus pandemic, information is being released and updated at a rapid pace. There remains many pieces of the relief provisions outlined above, particularly the FFCRA, that we will be working to clarify in the coming days. However, our team is here and ready to help in any way as you and your business navigate these uncertain times. Please do not hesitate to contact us should you have any questions or concerns.