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Tax Payment Deferral and Relief Legislation

March 20, 2020

Much has changed in the last few days and we would like to provide you with some final results information regarding relief efforts from Federal Government.

Tax Payment Deferral

The Treasury Secretary announced that the U.S. government will postpone the April 15th tax payment deadline for 90 days. This deferral covers 2019 income taxes due on April 15, 2020, and estimated income tax payments due on April 15, 2020. The postponement payment is up to $10 million dollars for C Corporations, and $1 million for all other taxpayers. The 2019 tax year filing date has not been deferred.

Relief Legislation

On March 18th the President signed the Families First Coronavirus Response Act which includes:

Emergency Paid Sick Leave

Private sector employers with fewer than 500 workers, and all public sector employers have to provide paid sick leave if the employee's absence is due to:

  • an isolation or quarantine order or advisory,
  • experiencing symptoms, or
  • caring for a family member or for a child whose school or place of care is closed due to a public emergency.

The paid sick leave would be:

  • 80 hours for full-time employees, and average hours for a two-week period for part-time employees.
  • Capped at $511 per day and $5,110 in the aggregate for those on leave because of their own health issue, and capped at $200 per day and $2,000 in the aggregate to care for others.

Emergency Family and Medical Leave

Private sector employers with fewer than 500 workers and government entities have to provide up to 12 weeks of job-protected leave to employees to care for a child whose school or place of care is closed. The first 10 days could be unpaid, although a worker could choose to use other accrued leave. Employers would be required to pay employees:

  • two-thirds of their wages, and
  • not to exceed $200 per day and $10,000 in the aggregate.

Employer Exemptions

The Department of Labor has authority to issue regulations to exempt small businesses with fewer than 50 employees. Also, employers of health care providers or emergency responders may elect to exclude these workers from this provision.

Payroll Tax Credit

Refundable employer payroll tax credits are available for the amounts paid by the employer for this leave.

There could be other provisions in the new law that effect each unique situation and how to fully utilize it. Consult your Rushton tax professional to further discuss.

Much has changed in the last few days and we would like to provide you with some final results information regarding relief efforts from Federal Government.

Tax Payment Deferral

The Treasury Secretary announced that the U.S. government will postpone the April 15th tax payment deadline for 90 days.  This deferral covers 2019 income taxes due on April 15, 2020, and estimated income tax payments due on April 15, 2020. The postponement payment is up to $10 million dollars for C Corporations, and $1 million for all other taxpayers. The 2019 tax year filing date has not been deferred. 

Relief Legislation

On March 18th the President signed the Families First Coronavirus Response Act which includes: 

Emergency Paid Sick Leave

Private sector employers with fewer than 500 workers, and all public sector employers have to provide paid sick leave if the employee's absence is due to:

  • an isolation or quarantine order or advisory,
  • experiencing symptoms, or
  • caring for a family member or for a child whose school or place of care is closed due to a public emergency.

The paid sick leave would be:

  • 80 hours for full-time employees, and average hours for a two-week period for part-time employees.
  • Capped at $511 per day and $5,110 in the aggregate for those on leave because of their own health issue, and capped at $200 per day and $2,000 in the aggregate to care for others.

Emergency Family and Medical Leave

Private sector employers with fewer than 500 workers and government entities have to provide up to 12 weeks of job-protected leave to employees to care for a child whose school or place of care is closed.  The first 10 days could be unpaid, although a worker could choose to use other accrued leave. Employers would be required to pay employees:

  • two-thirds of their wages, and
  • not to exceed $200 per day and $10,000 in the aggregate.

Employer Exemptions

The Department of Labor has authority to issue regulations to exempt small businesses with fewer than 50 employees.  Also, employers of health care providers or emergency responders may elect to exclude these workers from this provision. 

Payroll Tax Credit

Refundable employer payroll tax credits are available for the amounts paid by the employer for this leave. 

There could be other provisions in the new law that effect each unique situation and how to fully utilize it.  Consult your Rushton tax professional to further discuss.

 

Your Team at Rushton