COVID-19 Resourceswritten April 10, 2020
Updated may 12, 2020
The COVID-19 pandemic is having a rippling effect not only here in the US, but globally. Whether you are a small business owner or not, we all have been impacted by COVID-19, in one way or another. Below are links to resources that will help you navigate through many of the provisions of the newly passed CARES Act. Feel free to read through it all or use the summary below to beeline your way to the information that matters most to you.
Summary of topics
- The extension of the tax filing & payment deadline to July 15th
- IRS Stimulus Impact Payment (folks will start receiving payments as early as next week!)
- How to receive stimulus payment if you were not required to file a 2018 or 2019 tax return
- How to track your 2019 refund with the IRS & CA FTB
- What to do about outstanding bills when finances are tight including sample letters
- Early distribution penalty waived
- IRS installment agreement suspension
- Federal & State Small Business Loans & Grants available
July 15th – New IRS & CA FTB Tax Deadline
The Federal and California income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020. However, I encourage you, if you are able, to not delay until the summer. Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.
If it turns out that you are in a tax due position, you are able to schedule electronic withdrawals to take place on July 15th or earlier if you prefer. For more information on Tax Day from the IRS website, click here.
Economic Impact Payment
As soon as the week of April 13th, U.S. residents will receive the Economic Impact Payment of $1,200 for individual or head of household filers, and $2,400 for married filing jointly if they are not a dependent of another taxpayer and have a work eligible Social Security number with adjusted gross income up to:
- $75,000 for individuals
- $112,500 for head of household filers and
- $150,000 for married couples filing joint returns
For more information on eligibility, payment amounts, what to expect, when to expect it and more, click here.
How to Receive an Economic Impact Payment if not required to file 2018 or 2019 tax return
Eligible US citizen or permanent resident non-filers includes those who:
Had gross income that did not exceed $12,200 ($24,400 for married couples) for 2019
Were not otherwise required to file a federal income tax return for 2019, and didn’t plan to
Non-filers can enter their information in a special IRS portal to receive their payment. Here is a link to the portal.
How to track your 2019 refund with the IRS & CA FTB
If you filed your tax return after March 16 and you are due a refund from the IRS or CA FTB, it’s no doubt that the refund timeline may take longer than the usual 10 – 21 business days. You can monitor the status of your refund simply by using the Where’s My Refund? Tool on the IRS and CA website. Here are the links:
What to do about outstanding bills when finances are tight including sample letters
Over the last 3 weeks, 17 million Americans have filed for unemployment. This represents 10% of the US workforce. And for those of us still working, we are evermore cognizant about budgeting and spending. The COVID-19 situation might affect your ability to pay rent, bank loans, insurance premiums, utilities, or vendors on a timely basis. If you are unable to pay these items, open a line of communication with the company you owe. If you communicate honestly, there is a chance they might defer payment or lower their interest rates, and maintain your relationship in good standing.
Here are some tips on how to communicate with the company.
And here are a few sample letters to confidently communicate with companies.
Early distribution penalty waived
The 10% early distribution penalty on up to $100,000 of retirement withdrawals for coronavirus-related reasons is waived during 2020. New provisions allow tax liabilities on these distributions to be paid over a three-year period. The new rules also allow individuals to return these distributions to the retirement account over a three-year period and not be subject to annual contribution limits.
Action: This could be a great way to handle emergency payments until you receive a stimulus check, unemployment payments, or a pending small business loan.
IRS installment agreement suspension
The IRS announced suspension of payments of all amounts due from April 1 through July 15, 2020 and will not be in default on any IRS installment agreement during this period. Interest will continue to accrue on these installment agreements.
Action: Being on the bad side of the IRS is never fun. If you currently have an IRS installment agreement, you may consider taking advantage of this delay.
RESOURCES FOR SMALL BUSINESSES
Federal & State Small Business Loans & Grants available
The COVID-19 pandemic has upended all aspects of life around the world, including the world of business here in the U.S. The CARES Act allocated for billions of dollars in funds to go towards helping small businesses in the form of loans and grants. Not only did the federal government provide funds, many state and local programs were put in place to help small businesses stay afloat during this pandemic. Below are links to various loans. If you can answer yes to the question: was my business adversely affected by COVID-19? Then please please please apply for these loans and grants.
Economic Impact Disaster Loan (EIDL) and $10k Grant
All small businesses, including sole proprietors and independent contractors, can apply. If you apply for the loan, you are automatically entered to potentially receive the $10k grant. Apply on the SBA website.
Paycheck Protection Program (PPP)
This is a nearly $350-billion program intended to provide American small businesses with eight weeks of cash-flow assistance through 100 percent federally guaranteed loans. All small businesses are eligible. The loan has a maturity rate of 2 years and an interest rate of 1%. No need to make loan payments for the first six months. The loan can be forgiven and essentially turn into a non-taxable grant. Apply with the bank you do business with.
Below are links to additional resources, loans and grant programs available due to COVID-19:
- Working Solutions – COVID-19 Resource Guide for Small Businesses
- 8 Ways to Generate Revenue When Your Business Doors are Closed
- US Treasury – PPP Fact Sheet
- What is the Paycheck Protection Program?
- State by State COVID-19 Resources Available for Small Businesses
These uncertain times have left many of us full of anxiety and stress. I hope the above provided you with useful information to help reduce any confusion or unknowns as it relates to the government’s financial and tax changes in response to the COVID-19 pandemic. This is a difficult time and all this information can be a little overwhelming. We can help answer questions and provide additional resources. Please feel free to contact us at firstname.lastname@example.org.
Be well. Keep safe. Stay sane.