IRS and Treasury Announce Expanded Tax Relief Measures; Extend Deadlines

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The IRS and Treasury have announced special federal income tax return filing and payment relief in response to the ongoing Coronavirus (COVID-19) emergency. Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Additional guidance can be sought here.

Extension of Deadlines

A variety of tax-filing and payment deadlines falling on or after April 1, 2020, and before July 15, 2020, are postponed until July 15, 2020. Federal tax payments can be deferred to July 15 without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts, estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax. Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the July 15 deadline, can request a filing extension by (1) filing Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return; and (2) submitting an electronic payment and selecting Form 4868 or extension as the payment type. However, taxes would still be due by the July 15 due date.

Scheduling and Rescheduling Payments

Taxpayers can schedule their payment electronically online, by phone or using their mobile device and the IRS2Go app. Moreover, those who cannot pay the full amount owed by July 15 may qualify for a payment plan or can apply for an offer in compromise. Penalties and interest will begin to accrue on unpaid tax liability beginning July 16. Those looking to reschedule or schedule their federal tax payments can use the (1) Electronic Federal Tax Payments System; and (2) debit, credit card or digital wallet. Finally, taxpayers who filed electronically and scheduled their payment with an electronic funds withdrawal, and want to reschedule their payment to the July 15 due date, can call the e-file Payment Services automated line at 1-888-353-4537 to cancel their payment no later than 11:59 p.m. Eastern time.

 

Qualifying Employers Entitled to Refundable Credits for Funding Coronavirus-Related Paid Leave

The IRS has urged qualifying employers to utilize the tax credits they are entitled to for covering the costs associated with providing paid sick leave, paid family and medical leave to employees unable to work because of the coronavirus (COVID-19). These credits are refundable; if the amount of the credit exceeds the amount of tax owed, the remainder is refunded to the business or organization. These credits, provided under the Families First Coronavirus Response Act (P.L. 116-127), are available to eligible employers beginning April 1, 2020, for qualifying leave they provide between April 1, 2020, and December 31, 2020.

Eligible Employers

Eligible employers comprise of businesses and tax-exempt organizations with fewer than 500 full-time and part-time employees within the United States or any U.S. territory or possession and that have to meet certain employer paid leave requirements.

Paid Sick Leave Requirement and Credit

Employees of eligible employers who are unable to work or telework because they are quarantined or experiencing COVID-19 symptoms and seeking a medical diagnosis can receive up to 80 hours of paid sick leave. This pay is at their regular rate of pay or, if higher, the applicable minimum wage, up to $511 per day and $5,110 in total. The eligible employer is entitled to a fully refundable tax credit equal to the required paid sick leave wages. Eligible employers can also get an additional credit for the employer’s share of Medicare tax imposed on the qualified sick leave wages and the cost of maintaining health insurance coverage for the employee during the sick leave period. The employer is not subject to the employer portion of Social Security tax on those wages.

Paid Family and Medical Leave Requirement and Credit

In addition to the paid sick leave credit, an employee who is unable to work or telework because of a need to care for a child whose school or place of care is closed or whose child-care provider is unavailable due to COVID-19, is entitled to paid family and medical leave equal to 2/3 of the employee’s regular pay, up to $200 per day and $10,000 in total. Up to 10 weeks of qualifying leave can be counted toward the paid family leave credit. An employee qualifies for paid family and medical leave if they have been on an employer’s payroll for 30 calendar days or more.

The eligible employer is entitled to a fully refundable tax credit equal to the required paid family leave wages. Eligible employers can also get an additional credit for the employer’s share of Medicare tax imposed on those wages and its cost of maintaining health insurance coverage for the employee during the family leave period. The eligible employer isn’t subject to the employer portion of Social Security tax on those wages.

Procedure for Claiming Credits

Eligible employers report their total qualified leave wages and the related credits for each quarter on their federal employment tax return, usually Form 941, Employer’s Quarterly Federal Tax Return. They can receive the benefit of the credits by reducing their federal employment tax deposits for that quarter by the amount of the qualified leave wages, allocable qualified health plan expenses, and the employer’s share of Medicare tax on the wages. They will account for the reduction in deposits due to the leave credits on the Form 941 they file at the end of the quarter. If employers don’t have enough federal employment taxes to cover the amount of the credits, after they have deferred deposits of employer Social Security taxes, they may request an advance payment of the credits from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19. They may fax their completed forms to 855-248-0552.

Wilson Tax Law Group, APLC (www.wilsontaxlaw.com) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense. The firm was founded in 2014 by Joseph P. Wilson, a former Federal tax prosecutor, trial attorney for the IRS and trial attorney for the Franchise Tax Board.

For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC

Newport Beach and Yorba Linda, California

Tel: (949) 397-2292 (Newport Beach Office)

Tel: (714) 463-4430 (Yorba Linda Office)

Qualifying Employers Entitled to Refundable Credits for Funding Coronavirus-Related Paid Leave

The IRS has urged qualifying employers to utilize the tax credits they are entitled to for covering the costs associated with providing paid sick leave, paid family and medical leave to employees unable to work because of the coronavirus (COVID-19). These credits are refundable; if the amount of the credit exceeds the amount of tax owed, the remainder is refunded to the business or organization. These credits, provided under the Families First Coronavirus Response Act (P.L. 116-127), are available to eligible employers beginning April 1, 2020, for qualifying leave they provide between April 1, 2020, and December 31, 2020.

Eligible Employers

Eligible employers comprise of businesses and tax-exempt organizations with fewer than 500 full-time and part-time employees within the United States or any U.S. territory or possession and that have to meet certain employer paid leave requirements.

Paid Sick Leave Requirement and Credit

Employees of eligible employers who are unable to work or telework because they are quarantined or experiencing COVID-19 symptoms and seeking a medical diagnosis can receive up to 80 hours of paid sick leave. This pay is at their regular rate of pay or, if higher, the applicable minimum wage, up to $511 per day and $5,110 in total. The eligible employer is entitled to a fully refundable tax credit equal to the required paid sick leave wages. Eligible employers can also get an additional credit for the employer’s share of Medicare tax imposed on the qualified sick leave wages and the cost of maintaining health insurance coverage for the employee during the sick leave period. The employer is not subject to the employer portion of Social Security tax on those wages.

Paid Family and Medical Leave Requirement and Credit

In addition to the paid sick leave credit, an employee who is unable to work or telework because of a need to care for a child whose school or place of care is closed or whose child-care provider is unavailable due to COVID-19, is entitled to paid family and medical leave equal to 2/3 of the employee’s regular pay, up to $200 per day and $10,000 in total. Up to 10 weeks of qualifying leave can be counted toward the paid family leave credit. An employee qualifies for paid family and medical leave if they have been on an employer’s payroll for 30 calendar days or more.

The eligible employer is entitled to a fully refundable tax credit equal to the required paid family leave wages. Eligible employers can also get an additional credit for the employer’s share of Medicare tax imposed on those wages and its cost of maintaining health insurance coverage for the employee during the family leave period. The eligible employer isn’t subject to the employer portion of Social Security tax on those wages.

Procedure for Claiming Credits

Eligible employers report their total qualified leave wages and the related credits for each quarter on their federal employment tax return, usually Form 941, Employer’s Quarterly Federal Tax Return. They can receive the benefit of the credits by reducing their federal employment tax deposits for that quarter by the amount of the qualified leave wages, allocable qualified health plan expenses, and the employer’s share of Medicare tax on the wages. They will account for the reduction in deposits due to the leave credits on the Form 941 they file at the end of the quarter. If employers don’t have enough federal employment taxes to cover the amount of the credits, after they have deferred deposits of employer Social Security taxes, they may request an advance payment of the credits from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19. They may fax their completed forms to 855-248-0552.

Wilson Tax Law Group, APLC (www.wilsontaxlaw.com) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense. The firm was founded in 2014 by Joseph P. Wilson, a former Federal tax prosecutor, trial attorney for the IRS and trial attorney for the Franchise Tax Board.

For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC

Newport Beach and Yorba Linda, California

Tel: (949) 397-2292 (Newport Beach Office)

Tel: (714) 463-4430 (Yorba Linda Office)

Qualifying Employers Entitled to Refundable Credits for Funding Coronavirus-Related Paid Leave

The IRS has urged qualifying employers to utilize the tax credits they are entitled to for covering the costs associated with providing paid sick leave, paid family and medical leave to employees unable to work because of the coronavirus (COVID-19). These credits are refundable; if the amount of the credit exceeds the amount of tax owed, the remainder is refunded to the business or organization. These credits, provided under the Families First Coronavirus Response Act (P.L. 116-127), are available to eligible employers beginning April 1, 2020, for qualifying leave they provide between April 1, 2020, and December 31, 2020.

Eligible Employers

Eligible employers comprise of businesses and tax-exempt organizations with fewer than 500 full-time and part-time employees within the United States or any U.S. territory or possession and that have to meet certain employer paid leave requirements.

Paid Sick Leave Requirement and Credit

Employees of eligible employers who are unable to work or telework because they are quarantined or experiencing COVID-19 symptoms and seeking a medical diagnosis can receive up to 80 hours of paid sick leave. This pay is at their regular rate of pay or, if higher, the applicable minimum wage, up to $511 per day and $5,110 in total. The eligible employer is entitled to a fully refundable tax credit equal to the required paid sick leave wages. Eligible employers can also get an additional credit for the employer’s share of Medicare tax imposed on the qualified sick leave wages and the cost of maintaining health insurance coverage for the employee during the sick leave period. The employer is not subject to the employer portion of Social Security tax on those wages.

Paid Family and Medical Leave Requirement and Credit

In addition to the paid sick leave credit, an employee who is unable to work or telework because of a need to care for a child whose school or place of care is closed or whose child-care provider is unavailable due to COVID-19, is entitled to paid family and medical leave equal to 2/3 of the employee’s regular pay, up to $200 per day and $10,000 in total. Up to 10 weeks of qualifying leave can be counted toward the paid family leave credit. An employee qualifies for paid family and medical leave if they have been on an employer’s payroll for 30 calendar days or more.

The eligible employer is entitled to a fully refundable tax credit equal to the required paid family leave wages. Eligible employers can also get an additional credit for the employer’s share of Medicare tax imposed on those wages and its cost of maintaining health insurance coverage for the employee during the family leave period. The eligible employer isn’t subject to the employer portion of Social Security tax on those wages.

Procedure for Claiming Credits

Eligible employers report their total qualified leave wages and the related credits for each quarter on their federal employment tax return, usually Form 941, Employer’s Quarterly Federal Tax Return. They can receive the benefit of the credits by reducing their federal employment tax deposits for that quarter by the amount of the qualified leave wages, allocable qualified health plan expenses, and the employer’s share of Medicare tax on the wages. They will account for the reduction in deposits due to the leave credits on the Form 941 they file at the end of the quarter. If employers don’t have enough federal employment taxes to cover the amount of the credits, after they have deferred deposits of employer Social Security taxes, they may request an advance payment of the credits from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19. They may fax their completed forms to 855-248-0552.

Wilson Tax Law Group, APLC (www.wilsontaxlaw.com) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense. The firm was founded in 2014 by Joseph P. Wilson, a former Federal tax prosecutor, trial attorney for the IRS and trial attorney for the Franchise Tax Board.

For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC

Newport Beach and Yorba Linda, California

Tel: (949) 397-2292 (Newport Beach Office)

Tel: (714) 463-4430 (Yorba Linda Office)

Qualifying Employers Entitled to Refundable Credits for Funding Coronavirus-Related Paid Leave

The IRS has urged qualifying employers to utilize the tax credits they are entitled to for covering the costs associated with providing paid sick leave, paid family and medical leave to employees unable to work because of the coronavirus (COVID-19). These credits are refundable; if the amount of the credit exceeds the amount of tax owed, the remainder is refunded to the business or organization. These credits, provided under the Families First Coronavirus Response Act (P.L. 116-127), are available to eligible employers beginning April 1, 2020, for qualifying leave they provide between April 1, 2020, and December 31, 2020.

Eligible Employers

Eligible employers comprise of businesses and tax-exempt organizations with fewer than 500 full-time and part-time employees within the United States or any U.S. territory or possession and that have to meet certain employer paid leave requirements.

Paid Sick Leave Requirement and Credit

Employees of eligible employers who are unable to work or telework because they are quarantined or experiencing COVID-19 symptoms and seeking a medical diagnosis can receive up to 80 hours of paid sick leave. This pay is at their regular rate of pay or, if higher, the applicable minimum wage, up to $511 per day and $5,110 in total. The eligible employer is entitled to a fully refundable tax credit equal to the required paid sick leave wages. Eligible employers can also get an additional credit for the employer’s share of Medicare tax imposed on the qualified sick leave wages and the cost of maintaining health insurance coverage for the employee during the sick leave period. The employer is not subject to the employer portion of Social Security tax on those wages.

Paid Family and Medical Leave Requirement and Credit

In addition to the paid sick leave credit, an employee who is unable to work or telework because of a need to care for a child whose school or place of care is closed or whose child-care provider is unavailable due to COVID-19, is entitled to paid family and medical leave equal to 2/3 of the employee’s regular pay, up to $200 per day and $10,000 in total. Up to 10 weeks of qualifying leave can be counted toward the paid family leave credit. An employee qualifies for paid family and medical leave if they have been on an employer’s payroll for 30 calendar days or more.

The eligible employer is entitled to a fully refundable tax credit equal to the required paid family leave wages. Eligible employers can also get an additional credit for the employer’s share of Medicare tax imposed on those wages and its cost of maintaining health insurance coverage for the employee during the family leave period. The eligible employer isn’t subject to the employer portion of Social Security tax on those wages.

Procedure for Claiming Credits

Eligible employers report their total qualified leave wages and the related credits for each quarter on their federal employment tax return, usually Form 941, Employer’s Quarterly Federal Tax Return. They can receive the benefit of the credits by reducing their federal employment tax deposits for that quarter by the amount of the qualified leave wages, allocable qualified health plan expenses, and the employer’s share of Medicare tax on the wages. They will account for the reduction in deposits due to the leave credits on the Form 941 they file at the end of the quarter. If employers don’t have enough federal employment taxes to cover the amount of the credits, after they have deferred deposits of employer Social Security taxes, they may request an advance payment of the credits from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19. They may fax their completed forms to 855-248-0552.

Wilson Tax Law Group, APLC (www.wilsontaxlaw.com) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense. The firm was founded in 2014 by Joseph P. Wilson, a former Federal tax prosecutor, trial attorney for the IRS and trial attorney for the Franchise Tax Board.

For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC

Newport Beach and Yorba Linda, California

Tel: (949) 397-2292 (Newport Beach Office)

Tel: (714) 463-4430 (Yorba Linda Office)

Happy Memorial Day USA

Did you know? Each year on Memorial Day a national moment of remembrance takes place at 3:00 p.m. local time. From our house to your's, Wilson Tax Group salutes! Have a wonderful day.

Wilson Tax Group, APLC

949-397-2292

www.wilsontaxlaw.com

Newport Beach and Yorba Linda

Serving America and the Free World

Happy Memorial Day USA

Did you know? Each year on Memorial Day a national moment of remembrance takes place at 3:00 p.m. local time. From our house to your's, Wilson Tax Group salutes! Have a wonderful day.

Wilson Tax Group, APLC

949-397-2292

www.wilsontaxlaw.com

Newport Beach and Yorba Linda

Serving America and the Free World