Coronavirus Tax News

IRS

As speculations arise on extension of April 15 tax deadline, the IRS established a special section on the website to focus on coronavirus related news update;  https://www.irs.gov/coronavirus.

 

April 15 Tax Deadline

As of today, the deadline for filing your individual federal income tax returns remains April 15, 2020. If you need more time to file your federal income tax returns, consider filing for an extension.

payroll tax credit

Payroll Tax Credit

The House passed a 110-page coronavirus relief bill (Families First Coronavirus Response Act) on last Saturday morning, which includes payroll tax credit for employers with less than 500 employees. Those employers are required to offer two weeks of paid sick leave to their employees.

Same kind of employers must provide up to 3 months of paid family and medical leave for people forced to quarantine due to the virus or care for children or family members because of the outbreak.

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The tax credit is allowed against the employer portion of Social Security taxes. The credit applies to amounts paid to employees who are sick or quarantined. Employers who paid to employees caring for a family member or for a child whose school or place of care has been closed will be allowed to get such tax credit at a lesser amount. Caps and limits apply.

The provision expires at the end of the year and still needs to be approved by the Senate. Check out the full text of that bill; https://docs.house.gov/billsthisweek/20200309/BILLS-116hr6201-SUS.pdf.

 

Self-employed Individuals

Self-employed individuals who must self-isolate, obtain a diagnosis, or comply with a self-isolation recommendation for coronavirus qualify for the refundable credits, too. Self-employed individuals caring for a family member or for a child whose school or place of care has been closed due to coronavirus, are allowed a lesser refundable tax credit. As with employees, caps and limits apply.

 

State Taxes

Tax departments in some states also are expected to take action to extend tax deadlines. Comptroller of Maryland already announced June 1st extension of certain business returns with due dates during the months of March, April and May 2020 for businesses filing sales and use tax, withholding tax, and admissions & amusement tax, as well as alcohol, tobacco and motor fuel excise taxes, tire recycling fee and bay restoration fee returns.

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Additionally, If the IRS extends its April 15th filing deadline for corporate and individual income tax returns, Maryland will conform to the decision of the IRS.

However, still no coronavirus outbreak related tax deadline extensions from Virginia Department of Taxation and DC Office of Tax and Revenue.

AICPA State Tax Filing Relief Chart for Coronavirus provides the latest developments on state tax filings related to coronavirus.

 

Disclaimer: This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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