The outbreak of the Coronavirus and its effect on the medical and financial well-being of individuals everywhere, has called for swift and fluid response by our executive and congressional leaders.
Here is a look at important developments resulting from recent executive and congressional actions that affect both individuals and business owners. The information provides you and your family with guidance as you navigate through these trying times.
Notice 2020-17 – Tax Payment Relief
The Treasury and the IRS have provided assistance for taxpayers affected by the ongoing Coronavirus Disease 2019 Pandemic in the form of tax payment relief for any person with a federal income tax payment due April 15, 2020.
Specifically, Treasury Secretary Mnuchin announced that any person with a federal income tax payment due April 15, 2020, could postpone certain tax payments without interest or penalty until July 15, 2020.
- The amount of the payment which is postponed is an amount of up to $10 Million for each consolidated group or C corporation that does not file a consolidated tax return.
- Additionally, for all other affected taxpayers, the amount that is subject to deferral is up to $1 Million regardless of filing status. For example, the postponed payment amount is the same for a single individual and for married individuals filing a joint return. In both instances the postponed payment amount is up to $1,000,000.
- Furthermore, other IRS news items report that the payment postponement of up to $1,000,000 applies to income tax payments due on April 15, 2020 from trusts and estates.
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. Interest, penalties, and additions to tax with respect to such postponed federal income tax payments will begin to accrue on July 16, 2020.
Note that the Notice does not provide any filing date extensions.
However, as of approximately 10 a.m. on March 20, Treasury Secretary Mnuchin said through Twitter the following:
"At @realDonaldTrump’s direction, 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."
Families First Coronavirus Response Act
President Trump signed into law on March 18, 2020 a multibillion-dollar tax and spending package that provides relief for the economic implications of the global coronavirus outbreak. This bill responds to the coronavirus outbreak by providing emergency paid sick leave, public health emergency leave, free coronavirus testing, expanding food assistance and unemployment benefits, and requiring employers to provide additional protections for health care workers. The passage of legislation allows Congress to devote its attention to passing the next coronavirus relief package.
Following are some of the important provisions of the Act:
- Establishes a federal emergency paid leave benefits program to provide payments to employees taking unpaid leave due to the coronavirus outbreak,
- Expands unemployment benefits and provide grants to states for processing and paying claims,
- Requires employers to provide paid sick leave to employees,
- Establishes requirements for providing coronavirus diagnostic testing at no cost to consumers,
- Treats personal respiratory protective devices as covered countermeasures that are eligible for certain liability protections, and
- Temporarily increases the Medicaid federal medical assistance percentage (FMAP).
Small Business Support
In addition to the response noted above, small business owners who are experiencing economic hardship can find guidance from the Small Business Administration and applicable state and local business organizations. The federal government site: www.sba.gov contains a wealth of information for small business owners, including direction regarding loan resources, and other funding programs, to material about how to obtain local assistance. Additionally, many states have made available special relief for business owners.
These are just some of the current measures taken in response to the fluid situation with the COVID-19 pandemic that may affect you, your family, and your business. We remain vigilant in our commitment to be here for you during this disruptive time. Please contact us so we, in conjunction with your other advisers, can help address issues that are of concern to you.
Very truly yours,
Jay A. Finke, CFP®, Matt A. Held, CFP® and Robert V. Molenda, CLU, ChFC, CRPC®
Lincoln Financial Advisors Corp. and its representatives do not provide legal or tax advice. You may want to consult a legal or tax advisor regarding any legal or tax information as it relates to your personal circumstances.
Matt A. Held is a registered representative of Lincoln Financial Advisors Corp.
Securities and investment advisory services offered through Lincoln Financial Advisors Corp., a broker-dealer (member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies.
Jay A. Finke is a registered representative of Lincoln Financial Securities Corporation.
Securities and investment advisory services offered through Lincoln Financial Securities Corporation. Member SIPC. Insurance offered through Lincoln affiliates and other fine companies.
Our mission is to help you toward reaching your financial goals. We are proactive in our recommendations. But sometimes, a good defense is the best offense. It’s heartbreaking to hear stories of theft. We don’t want you to become a victim and another government statistic.
Jay Finke and Matthew Held are registered representatives of Lincoln Financial Advisors.