Below are resources to assist you in navigating the recent Acts to deal with the effects of the Coronavirus (COVID-19) that has impacted both our business and personal community.  Please reach out to anyone at Detweiler, Hershey & Associates, P.C. with any questions specific to you or your business.

Coronavirus Aid, Relief and Economic Security – CARES Act

Individual Recovery/Rebate Credit

The CARES Act allows for $1,200 payments to be made immediately by the IRS to qualifying taxpayers as well as $500 payments for qualifying children.  The IRS has posted a question and answer on which taxpayers will qualify as well as how and when the payments will be remitted.

Employee Retention Credit for Employers

The provision provides for a refundable payroll tax credit for 50% of wages paid by eligible employers to certain employees during the COVID-19 crisis.  The IRS has released a fact sheet detailing what employers qualify and how to file for the credit.

This payroll tax credit is different from the payroll tax credit provided for paid sick leave as detailed in the Families First Act.

Delay on Payment of Employer Payroll Taxes

The CARES Act allows taxpayers to defer paying the employer portion of certain payroll taxes incurred through the end of 2020.

The applicable deferral dates would allow employers to pay 50% of the deferred taxes before December 31, 2021 and the remaining 50% before December 31, 2022.

All payments will be treated as being timely made as long as they are made by the above deferral periods.

Paycheck Protection Program

The CARES Act allocated $350 billion to help small business keep workers employed through the Paycheck Protection Program.  The program provides loans to businesses for certain qualified costs that may be forgiven at the end of the loan.  The loans will be issued by participating lending institutions and banks.  If you have questions on the Program or the information outlined below, we recommend you contact your current banking or lending institution.

The link below is an overview of the program and qualifications for the program.

For more information on the Paycheck Protection Program and other resources SBA is offering, please use the following resource guide.  The link below also provides information for self-employed individuals as well.

Families First Act – Paid Sick Leave Guidance

Since the passing of the Families First Act which provides a payroll tax credit for the mandatory paid sick leave for employers with between 50 and 500 employees, the Department of Labor and the IRS have issued additional guidance as well as other sources.  Please see below for additional information.

Additional Tax Provisions Contained in Recent Acts

No 10% Additional Tax for COVID-19 Related Retirement Plan Distributions

The CARES Act provides that the 10% additional tax does not apply to any coronavirus-related distributions up to $100,000.

A coronavirus-related distribution is any distribution made after January 1, 2020, and before December 31, 2020, from an eligible retirement plan, made to a qualified individual.

A qualified individual is an individual:

  1. Who is diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 by a test approved but the CDC,
  2. Whose spouse or dependent is diagnosed with such virus,
  3. Who experiences adverse financial consequences as a result of being quarantined, being furloughed or laid off or having work hours reduced due to such virus or disease, being unable to work due to lack of child care due to such virus, closing or reducing hours of business owned or operated by the individual due to such virus or disease.

Distributions may be contributed back to the retirement plan at any time during a three-year period.  Distributions can be included in income ratably over a three-year period.

Required Minimum Distribution Waived for 2020

The CARES Act provides that required minimum distribution requirements do not apply for calendar year 2020.

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