As we look to the fourth week of our safer-at-home shutdown, the professional community continues to discuss new information regarding the Families First Coronavirus Recovery Act (FFCRA) and the CARES Act. Though our firm has primarily been focused on the Payroll Protection Program (PPP), we want to draw your attention to certain features of the FFCRA.
This update includes information about both PPP and FFCRA:
- The big news today is that more items on the tax deadline calendar have been delayed to July 15. See www.irs.gov/pub/irs-drop/n-20-23.pdf
- Notice 20-23 delays until July 15 the estimated taxes that are normally due on June 15.
- If you cannot file by July 15, you will need to extend.
- Penalties and interest will apply to payments not made by July 15, so plan to pay-up.
- Notice 20-23 delays until July 15 the estimated taxes that are normally due on June 15.
- The SBA is expected to provide guidance for sole proprietors and independent contractors with details on applying for a PPP loan. As of 6 p.m. Eastern, today, nothing is available. Nada!
- There is much talk that the PPP loan forgiveness available under Section 1106 of the CARES Act makes it possible to have tax-free forgiveness and still take deductions for the documented expenses that were forgiven. Don’t be so sure. More guidance is to come.
- And remember that not more than 25 percent of the forgivable costs can be used for non-payroll costs.
- If you do have PPP forgiveness, you will still have to deposit your payroll withholding taxes for your employees. You should not take advantage of the CARES Act’s opportunity to defer to 2021 and 2022. Deferment is for only the employer portion of FICA, and not Medicare or any withholding for your employees.
- Partnerships that may need to amend tax returns due to the CARES Act’s modifications to Qualified Improvement costs can now more easily make those amendments. Ask your advisor if this applies to you. If you don’t think this affects you, then it probably doesn’t.
Stay tuned for more updates. As the PPP loans are granted and distributed, we will focus more and more on the forgiveness portion of the CARES Act (Section 1106) and the particulars of the FFCRA.
In the mean time, if you did not provide your bank routing information on your last tax return or did not file electronically, you can provide the necessary information to the IRS easily and quickly through the link below.
CLICK HERE for a direct link to the IRS site.