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Covid-19

Covid-19 Firm Policy

Posted by Admin Posted on Mar 23 2020

Alan F Burke, CPA, PA and staff are continuing to work, even though we have currently closed the office to walk-ins and appointments in an effort to do our part in practicing social distancing and community responsibility.  We have experienced some disruption in our operations, but not nearly as much as in some industries, such as restaurants, for example.  We are currently focusing our efforts to identify clients who are getting refunds, so that they can obtain their refunds as soon as possible.  For those clients who owe taxes, we will reach out to them to discuss whether there is a reason to file as soon as possible.  Other than extenuating circumstances, such as a client with a pending bank loan where a copy of their 2019 tax return is required before loan approval, we will likely wait until after April 15 to complete your tax returns.

As we “catch-up” we will continue to work to complete tax returns before April 15, even for those clients who owe federal taxes, but the taxpayer can wait until July 15, 2020 to pay the federal tax; they may choose to pay NC taxes due April 15, 2020 to avoid NC interest charges.  

Lastly, this is a fluid and constantly changing situation.  We will continue to monitor the situation and do our best to keep our clients informed during this difficult time.

Be safe!   

FFCRA

Posted by Admin Posted on Mar 23 2020

Families First Coronavirus Response Act (FFCRA)

Update to Clients Regarding Covid-19 Enacted Legislation

Posted by Alan F. Burke, CPA, PA on March 23, 2020

 

We continue to keep up with the daily changes and updates regarding governmental relief in regards to the Covid-19 virus.  This notice is an attempt to keep you informed of what we understand to be actual enacted rules and regulations.  We are not addressing what we understand to be proposals, opinions and/or speculations. 

On Thursday March 18, 2020, the Families First Coronavirus Response Act (FFCRA) was passed and signed by President Trump.  This legislation is primarily to support businesses with fewer than 500 employees who continue to pay employees who are not working (neither on-site nor tele-working) due to:

  1. Employee Subject to quarantine or isolation order
  2. Employee who has been advised by a health provider to self-quarantine,
  3. Experiencing symptoms and seeking diagnosis,
  4. Caring for an individual subject to quarantine or isolation order, or
  5. Caring for a child whose school has been closed

A very important provision of this act is that it does not come into effect until 15 days after enactment (March 18, 2020).  Therefore, these provisions appear to only apply after April 2, 2020.  We believe there will be additional guidance forthcoming, and we will continue to update and advise or clients as we obtain additional guidance.

The FFCRA is designed to reimburse employers who continue to pay their employees even though the employee is not working due to one of the five reasons mentioned above.  The mechanism to do this is through tax credits against payroll tax deposits (i.e. subtract from Form 941 deposits) and if the credits exceed the total Form 941 deposit requirements, the excess would be refunded after filing the quarterly payroll tax reports.

There are numerous requirements that include continuing to pay the affected employee a certain specific percentage of their normal compensation (in some cases required to be 100% of their compensation).  There are also limits in the reimbursement (for example, for qualifying reasons 1-3, the maximum is $511/day - $5,110 total; for qualifying reasons 4-5, the maximum is $200/day - $2,000 total).

Recap:

Due to the deferral of enactment to April 2, 2020, we recommend documenting every employee who is not coming to work due to one of the reasons above and notify your contact at our office that you have one of these situations and you are in a position to consider continuing to pay them, even though they are not actually working.

Covid-19 Legislation

Posted by Admin Posted on Mar 23 2020

2019 Tax Return Due Dates

Update to Clients Regarding Covid-19 Enacted Legislation

Posted by Alan F. Burke, CPA, PA on March 23, 2020

 

We continue to keep up with the daily changes and updates regarding governmental relief in regards to the Covid-19 virus.  This notice is an attempt to keep you informed of what we understand to be actual enacted rules and regulations.  We are not addressing what we understand to be proposals, opinions, and/or speculations. 

At President Trump’s and Congress’s direction, the IRS has issued notices regarding relief for taxpayers due to the Coronavirus.  On March 21, 2020, the IRS issued Notice 2020-18 and announcement IR-2020-58.  The following are some specific details from this Notice:

  1. The federal tax filing deadline for income taxes due April 15, 2020 has been extended to July 15, 2020.
  2. Federal income taxes due April 15, 2020, may be paid as late as July 15, 2020 without any interest, penalty, or addition to tax for failure to pay federal income tax. 
  3. The penalty- and interest-free deferral applies to all taxpayers, including individual, trusts and estates, corporations, and other non-corporate tax filers, as well as those who pay self-employment tax, regardless of the amount owed.
  4. First quarter estimated tax payments that would have otherwise been due April 15, 2020, are now due July 15, 2020.
  5. The Act does not include payroll taxes or excise taxes.
  6. This is an automatic extension that requires no additional filings by the taxpayer.
  7. As of the issuance of Notice 2020-18, no guidance has been given regarding second quarter estimates that are due June 15, 2020.

Each State’s legislature decides at its level how it will handle tax returns and payments.  We are closely monitoring our resources to keep up-to-date on each State’s measures of tax relief.  Below are summaries of what we know at this time from the most common States our clients file in:

The NC Department of Revenue has announced that they will extend the April 15 tax filing deadline to July 15 for individual, corporate, and franchise taxes and will not charge late filing penalties or late payment penalties through July 15, 2020; however, they indicated they do not have the authority to waive interest.  The NC Legislature would have to pass a provision to waive late payment interest.  However, to put it into perspective, if a taxpayer owes $5,000 to NC and waits until July 15, 2020 to pay the tax, the interest would be around $75.  No guidance has been issued yet regarding estimated tax payment deadlines or deferrals.

As of March 17, 2020, South Carolina has announced that tax returns and payments due April 15 through June 1 will now be due June 1, 2020.  Penalties and interest will not be charged if payment is made by June 1.