Information Type: COVID Updates

Answers to questions about the CARES Act employee retention tax credit

Posted on April 13, 2020 by -

The recently enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act provides a refundable payroll tax credit for 50% of wages paid by eligible employers to certain employees during the COVID-19 pandemic. The employee retention credit is available to employers, including nonprofit organizations, with operations that have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings. The credit is also provided to employers who have experienced a greater than 50% reduction in quarterly receipts, measured on a year-over-year basis.

IRS issues FAQs

The IRS has now released FAQs about the credit. Here are some highlights. How is the credit calculated? The credit is 50% of qualifying wages paid up to $10,000 in total. So the maximum credit for an eligible employer for qualified wages paid to any employee is $5,000. Wages paid after March 12, 2020, and before Jan. 1, 2021, are eligible for the credit. Therefore, an employer may be able to claim it for qualified wages paid as early as March 13, 2020. Wages aren’t limited to cash payments, but also include part of the cost of employer-provided health care. When is the operation of a business “partially suspended” for the purposes of the credit? The operation of a business is partially suspended if a government authority imposes restrictions by limiting commerce, travel or group meetings due to COVID-19 so that the business still continues but operates below its normal capacity.

Example: A state governor issues an executive order closing all restaurants and similar establishments to reduce the spread of COVID-19. However, the order allows establishments to provide food or beverages through carry-out, drive-through or delivery. This results in a partial suspension of businesses that provided sit-down service or other on-site eating facilities for customers prior to the executive order.

Is an employer required to pay qualified wages to its employees? No. The CARES Act doesn’t require employers to pay qualified wages.

Is a government employer or self-employed person eligible? No.Government employers aren’t eligible for the employee retention credit. Self-employed individuals also aren’t eligible for the credit for self-employment services or earnings.

Can an employer receive both the tax credits for the qualified leave wages under the Families First Coronavirus Response Act (FFCRA) and the employee retention credit under the CARES Act? Yes, but not for the same wages. The amount of qualified wages for which an employer can claim the employee retention credit doesn’t include the amount of qualified sick and family leave wages for which the employer received tax credits under the FFCRA.

Can an eligible employer receive both the employee retention credit and a loan under the Paycheck Protection Program? No. An employer can’t receive the employee retention credit if it receives a Small Business Interruption Loan under the Paycheck Protection Program, which is authorized under the CARES Act. So an employer that receives a Paycheck Protection loan shouldn’t claim the employee retention credit. For more information Here’s a link to more questions: https://bit.ly/2R8syZx . Contact us if you need assistance with tax or financial issues due to COVID-19.

© 2020

Senate Passes $2.2 Trillion Bill to Support Economy During Virus Pandemic

Posted on March 30, 2020 by -

Here is a special report published by Wolters Kluwer.  

 

As COVID-19 continues to upend nearly every aspect of life in the United States, Congress has been working to relieve suffering Americans. Having passed the Families First Coronavirus Response Act on March 18 in an effort to limit the spread of the pandemic and support relief efforts, Congress turned to stabilizing the economy. After days of furious negotiations between Republicans and Democrats on the Hill and Trump Administration officials, the Senate passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. With a $2.2 trillion price tag, the bill is the most expensive piece of legislation ever passed.

Read the full report here

Contact us with any specific questions.

Coronavirus (COVID-19): Tax relief for small businesses

Posted on March 23, 2020 by -

Businesses across the country are being affected by the coronavirus (COVID-19). Fortunately, Congress recently passed a law that provides at least some relief. In a separate development, the IRS has issued guidance allowing taxpayers to defer any amount of federal income tax payments due on April 15, 2020, until July 15, 2020, without penalties or interest.

New law

On March 18, the Senate passed the House’s coronavirus bill, the Families First Coronavirus Response Act. President Trump signed the bill that day. It includes: Paid leave benefits to employees, Tax credits for employers and self-employed taxpayers, and FICA tax relief for employers.

Tax filing and payment extension

In Notice 2020-18, the IRS provides relief for taxpayers with a federal income tax payment due April 15, 2020. The due date for making federal income tax payments usually due April 15, 2020 is postponed to July 15, 2020.

Important: The IRS announced that the 2019 income tax filing deadline will be moved to July 15, 2020 from April 15, 2020, because of COVID-19. Treasury Department Secretary Steven Mnuchin announced on Twitter, “we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.”

Previously, the U.S. Treasury Department and the IRS had announced that taxpayers could defer making income tax payments for 2019 and estimated income tax payments for 2020 due April 15 (up to certain amounts) until July 15, 2020. Later, the federal government stated that you also don’t have to file a return by April 15. Of course, if you’re due a tax refund, you probably want to file as soon as possible so you can receive the refund money. And you can still get an automatic filing extension, to October 15, by filing IRS Form 4868. Contact us with any questions you have about filing your return.

Any amount can be deferred In Notice 2020-18, the IRS stated: “There is no limitation on the amount of the payment that may be postponed.” (Previously, the IRS had announced dollar limits on the tax deferrals but then made a new announcement on March 21 that taxpayers can postpone payments “regardless of the amount owed.”) In Notice 2020-18, the due date is postponed only for federal income tax payments for 2019 normally due on April 15, 2020 and federal estimated income tax payments (including estimated payments on self-employment income) due on April 15, 2020 for the 2020 tax year.

As of this writing, the IRS hasn’t provided a payment extension for the payment or deposit of other types of federal tax (including payroll taxes and excise taxes).

Contact us

This only outlines the basics of the federal tax relief available at the time this was written. New details are coming out daily. Be aware that many states have also announced tax relief related to COVID-19. And Congress is working on more legislation that will provide additional relief, including sending checks to people under a certain income threshold and providing relief to various industries and small businesses. We’ll keep you updated. In the meantime, contact us with any questions you have about your situation.

© 2020

Ritz Holman CPAs Updated Response to COVID-19

Posted on March 21, 2020 by -

Ritz Holman CPAs Updated Response to COVID-19

To our valued clients,

Our world has seemingly changed overnight. With this in mind, first and foremost, we need to consider the health and safety of our family, co-workers, clients, friends and the community at-large. As a result, we have decided to close our physical office. This decision was based on recommendations from the CDC to limit person-to-person contact.

Thanks to technology, all of our team members are now working remotely from their homes. This will allow us to be fully operational with the ability to maintain social distance.

Although many of our operational procedures will need to be altered, our staff is fully committed to providing you with outstanding service. For your safety as well as those of our team, we are requesting that interactions be limited to emails, texts, telephone and fax (414-271-7464), along with video and teleconferencing options.

Beyond our office procedures, the Secretary of the Treasury Steven Mnuchin announced that taxpayers can delay filing their tax returns and delay paying their income tax until July 15, 2020. The state of Wisconsin has also extended the filing and payment deadlines to July 15, 2020. We will keep you updated as other changes become available.

Since we are all working remotely, we do not have the same printing capabilities, as you are accustomed to. For the time being, all completed tax returns, tax payment and estimate vouchers, authorization forms, financial statements, etc. will be emailed either through our secure web portal along with filing instructions, or through our tax software, where you will be able to sign your return electronically. We also realize that not all of our clients have printing capabilities. If you are unable to print, please contact your Partner directly via email or phone.  Each Partner’s individual contact information is on our firm’s website www.ritzholman.com.

Finally, we do have one request. Our goal is to continue to work and take care of each and every one of you; furthermore, we are requesting that you continue to forward your documents. Even though returns and payments are not due until July 15th, we are committed to taking care of your needs now. This will help us navigate rapidly changing guidance.

Thank you for your loyalty.  We are grateful for all our clients. Be well and stay healthy!

Ritz Holman CPAs

Ritz Holman CPAs Continued Response to COVID-19

Posted on March 19, 2020 by -

Ritz Holman CPAs Continued Response to COVID-19

Ritz Holman CPAs continues to carefully monitor and safeguard the health and safety of our employees, clients, and the community in light of the COVID-19 virus. We are dedicated to providing our clients and the community with the highest level of service during this time and have systems in place to provide assurances that your service remain in place.

Effective March 19, 2020, we have closed our office to the public and our employees are all working remotely from home.

We encourage you to reach out to us via email; our individual contact information is on the “Our People” tab on our firm’s website.

We will continue to monitor this ever changing situation, communicate updates, and dedicate our resources to best serve our clients and the community.

Please refer to our website: www.ritzholman.com for the ability to securely upload your documents and get up-to-date information.

 

Ritz Holman CPAs Response to COVID-19

Posted on March 16, 2020 by -

Ritz Holman CPAs Response to COVID-19

Ritz Holman CPAs is taking precautions to carefully monitor and safeguard the health and safety of our employees, clients, and the community in light of the COVID-19 virus; furthermore, we recognize that these safeguards are evolving rapidly.

We will continue to provide our clients and the community with the highest level of service during this time and have systems in place to provide assurances that your service needs will be met.

Although many of our staff members will be working remotely from their homes we are open for business.

Due to the nature of this unprecedented event we are actively monitoring all recommendations from the Center of Disease Control and World Health Organization. As of this time our main office is open; however, if at all possible we are recommending, that in-person client meetings be limited. Our firm is up-to-date with the latest technology and we are available by phone, teleconference, fax, email, text, etc.

We will continue to monitor this ever-changing situation, communicate updates, and dedicate our resources to best serve our clients and the community.

Please refer to our website: www.ritzholman.com for the ability to securely upload your documents and get up-to-date information.

Do not hesitate to contact our office with questions and concerns.

Be smart and be healthy!