COVID-19 Tax + Financial Update

At the moment, we find ourselves on some pretty shaky ground. And in response, I want to offer my best wishes to everyone out there reeling in the fallout from the COVID-19 pandemic. I sincerely hope you, your family, friends, and assorted loved ones are all healthy and safe.

As we enter this truly unprecedented time in modern history, we’re all feeling unsure (and likely a bit nervous) about what may come. But the reality is, no one can legitimately predict the future at this point. Our government, at all levels — Federal, State + Local — are doing their best to manage the situation. So, for now, it’s a genuine game of “wait and see.”

But to assuage at least some of your short-term concerns, I can share with you what is hopefully a shaft of light at the end of this tunnel… Here are the governmental resources currently available to offer financial relief amid this growing crises:

Temporary Income Tax Payment Reprieve

Treasury Department Secretary, Steven Mnuchin, announced a three-month delay on annual income tax payments for individuals and businesses affected by the coronavirus pandemic.

Normally due April 15th, you now have until mid-July to pay your 2019 tax bill (the delay is only applicable to individuals with an annual income of less than $1 million and corporations with an annual income of less than $10 million).

Also, keep in mind that you’re still required to file your return by the April 15th deadline (regardless of your intentions to take advantage of the payment deferral).

And for California residents affected by the coronavirus pandemic, the State Franchise Tax Board has granted a delay in filing and payment requirements until at least June 15th.

It’s also worth noting that if current circumstance persist, or, God forbid, worsen, in all probability, both federal and state payment deferments will be extended further into the future.

To stay up-to-date as the situation evolves, I recommend keeping tabs on the recently launched IRS website specifically created to address coronavirus tax relief concerns.

SBA Disaster Loans to Aid Business Impacted by The Coronavirus Pandemic

The Small Business Association (SBA), a government agency that provides financing to small businesses, recently announced a financing initiative — Economic Disaster Loans — specifically to support business affected by the coronavirus.

The SBA’s Disaster Assistance Office will coordinate with state governments to authorize and release funds. Disaster loans of up $2 million are available at a 3.75% interest rate (2.75% for non-profit entities). And ensure repayment is affordable for financially recovering business owners, you can borrow funds on payment plans extending up to 30 years to.

These funds can be used to repay fixed debts, meet payroll obligations, handle accounts payable, and cover other bills your business has amassed while coping with the economic fallout of the coronavirus pandemic.

It’s important to note these funds are limited. Thus, time is of the essence in the application process. You must submit your loan application ASAP if you hope to take advantage of this discounted funding opportunity.

You can find additional information on the SBA’s coronavirus website. And apply for a loan online at the SBA’s Disaster Loan Assistance website.

Important Information for Employees Impacted By the Current Coronavirus Pandemic

If you’re a worker who has contracted the virus, been quarantined, or are caregiving for an infected family member; if you’ve been sent home due to a work closure; or if you’ve been sided lined by childcare duties because of school closures — the California Employment Development Department (EDD) is offering several support packages.

For the sick or quarantined, you can file a Disability Insurance (DI) claim. These benefits cover 60%-70% of your normal wages. And the Governor has issued an executive order waiving the one week waiting period, so your application will be fast-tracked.

For those out of work due to a business closure, you may be eligible to file an Unemployment Insurance claim. This option is available to individuals who have lost their job due to the current crisis. These unemployment benefits range from $450 – $500 per week. And the Governer’s executive order waiving the one-week waiting period also applies here.

For those unable to work because you’re caring for an ill family member, you’re eligible to file a Paid Family Leave (PFL) claim. This offers up six weeks of paid benefits. And covers 60%-70% of your normal wages.

In addition, if you’re forced to stay home to care for your children because of school closures, you may also be eligible to file an Unemployment Insurance claim.

Resources For Employers Impacted by The Coronavirus Pandemic

If you’re hoping to avoid layoffs due to reduced hours, you may be able to take advantage of the Work Sharing program. This program helps make up for wage shortfalls resulting from employees working reduced hours.

If you’re facing possible closure or potential layoffs, the Rapid Response Team may be able to help. This organization will meet with you to discuss your needs and seek alternatives to avoid closure or layoffs.

You may also be eligible for a deferment on payroll taxes. For more information on eligibility and how the application process works, contact the EDD directly at: 1-888-745-3886

Stay Tuned for Additional Updates!

This is a swiftly evolving situation and new information is arriving at a galloping pace. In turn, I will do my best to keep you informed. Meanwhile, if you have tax questions related to the current crisis, please get in touch with me here…

I’m eager to help you navigate this challenging time!