COVID 19 Tax Updates

The most recent action by the Treasury extending the tax filing deadline from April 15 to July 15 has provided much-needed relief from compliance matters. It has allowed CPA’s to focus on much more and pertinent issues facing small businesses. Almost every industry I service as a CPA has been affected in some fashion by the recent pandemic.

In the past several weeks, both Federal and Ohio governmental agencies have teamed up to assist small business owners during this unprecedented time. Some of these programs include the SBA Economic Injury Disaster Loan Program, Federal Income Tax Relief Packages, Stimulus Packages, and by waiving the normal waiting period for Ohio Unemployment benefits as well as other necessary changes.

SBA Economic Injury Disaster Loan Program

The SBA Economic Injury Disaster Loan Program is designed to provide low-interest working capital loans of up to $2 million to small businesses and non-profit organizations affected by the Covid-19 in presidential, and SBA declared disaster areas. This loan is designed to provide relief to those companies that do not have financing availability in place. The states currently eligible for this program include Ohio as well as Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Illinois, Indiana, Louisiana, Maine, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, Washington, and West Virginia.

The loan provides interest at 3.75% for small businesses and 2.75% for non-profit organizations for up to a maximum of 30 years. Proceeds from the loan can be used to cover accounts payable, debts, payroll, and other bills the coronavirus has affected your company’s ability to pay. Click HERE for Q&A about the loan and HERE to apply.

Federal Income Tax Relief Packages

  • Deadline and payments due extended to July 15.
  • Coronavirus paid-leave tax credits and expanded FMLA Leave provides for many employers EFFECTIVE April 2, 2020.
  • Stimulus Package for families and businesses (Details HERE)
  • Currently, Congress is working on this package
    • Includes income tax rebates up to $1,200 for single filers and $2,400 for taxpayers filing a joint return.
    • An additional $500 for each child claimed on the return.
    • Payments are proposed to begin to phase out for single filers with 2018 adjusted gross income of $75,000 and $150,000 for joint filers with complete phase out at adjusted gross income of $99,000 and $198,000, respectively.
    • Special deduction up to $300 of cash donations to charity for nonitemizers.
    • Employers would be able to defer payment of their share of social security tax with ½ of the deferred amount due December 31, 2021, and the other ½ due on December 31, 2022.
    • Businesses would be eligible to get a five-year carryback of net operating losses.

Ohio Unemployment Changes

There are also some significant changes to Ohio Unemployment as a result of the pandemic. Ohio Governor Mike DeWine issued an Executive Order that includes the following changes to Ohio’s unemployment system during the state’s emergency declaration period:

  • Unemployed workers will include individuals requested by a medical professional, local health authority, or employer to be isolated or quarantined as a consequence of COVID-19 even if not diagnosed with COVID-19; and
  • Individuals totally or partially unemployed, or who are participating in the SharedWork Ohio Program will not be required to serve a waiting period before receiving unemployment insurance or SharedWork benefits; and
  • Any benefit paid on these unemployment claims shall not be charged to the account of the employer who otherwise would have been charged but instead shall be charged to the mutualized account, except reimbursing employers; and
  • Waiver of work search requirements shall include those individuals requested by a medical professional, local health authority or employer to be isolated or quarantined as a consequence of COVID-19 even if not actually diagnosed with COV-19; and
  • Penalties for late reporting and payments will be waived for employers affected by COVID-19.

Ohio Workers Compensation Changes

As I was drafting this blog, Lieutenant Governor Jon Husted also announced the deferral of the March, April, and May 2020 workers compensation premiums until June 2020, at which time additional considerations may be given.

Legislation is continuously changing during this time, so please look for the Hall, Kistler email Alerts in your In Box and be sure to check our website, Facebook, LinkedIn and Twitter accounts for the most up-to-date information. Feel free to contact us at 330-453-7633 if you have questions.

Categories: Tax
Tags: Covid-19, Tax

Learn more about this post's author: Keith Arner

My Credentials: CPA CVA

A Little Teaser: Keith is a partner at Hall, Kistler, with more than 30 years of auditing, tax, and accounting expertise for closely held and publicly held companies. He leads the firm's Oil and Gas Niche and is a Certified Valuation Analyst (CVA).…

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