President Trump Signs Paycheck Protection Program Flexibility Act: On 6/5/20, President Trump signed the Paycheck Protection Program Flexibility Act (PPPFA) of 2020 (H.R. 7010), which modifies provisions related to the forgiveness of loans made to small businesses under the PPP. The PPPFA (1) eliminates a CARES Act provision that prevented certain PPP participants from deferring the payment of payroll taxes; (2) requires borrowers to use at least 60% (rather than the original 75%) of PPP funds on payroll costs; (3) gives borrowers 24 weeks (rather than the original eight weeks) to spend PPP funds; (4) pushes back the original 6/30/20 deadline to rehire workers to 12/31/20; (5) provides additional exceptions if a borrower is unable to rehire the required number of employees; and (6) extends the minimum maturity date of the loan (for proceeds that are not forgiven) to five years. The full legislative text of the bill is available at www.congress.gov/bill/116th-congress/house-bill/7010/text .
You’ve probably heard that IRS will be making millions of ‘‘economic impact payments’’ (also called ‘‘recovery rebates’’) in the coming months to help people stay afloat during this time of economic uncertainty related to the COVID-19 crisis. Here’s what you need to know about this program.
Amount of payment. IRS will soon begin making payments of up to $1,200 to eligible taxpayers or up to $2,400 to married couples filing joint returns. Parents will get an additional $500 for each dependent child under age 17. Thus, the payment for a married couple with two children under 17 will be $3,400.
Who is eligible. U.S. citizens and residents are eligible for a full payment if their adjusted gross income (AGI) is under $75,000 (singles or marrieds filing separately), $112,500 (heads of household), and $150,000 (joint filers). The individual must not be the dependent of another taxpayer and must have a social security number that authorizes employment in the U.S.
Phaseout based on income. For individuals whose AGI exceeds the above thresholds, the payment amount is phased out at the rate of $5 for each $100 of income. Thus, the payment is completely phased out for single filers with AGI over $99,000 and for joint filers with no children with AGI over $198,000. For a married couple with two children, the payment will be completely phased out if their AGI exceeds $218,000.
How to get a payment. The vast majority of people won’t have to do anything in order to get an economic impact payment. IRS will calculate and send the payment automatically to those who are eligible.
If you’ve already filed your 2019 tax return, IRS will use the AGI and dependents from that return to calculate the payment amount. If you haven’t filed for 2019 yet, information from your 2018 return will be used.
IRS will deposit the payment directly into the banking account reflected on the return. IRS plans to develop a web-based portal for individuals to provide banking information to IRS, so that payments can be received as a direct deposit rather than by check sent in the mail.
People who are not otherwise required to file a tax return will need to file an abbreviated return to receive an economic impact payment. IRS will soon provide instructions on how to do this. This category includes low-income taxpayers, some veterans, and individuals with disabilities.
Social security recipients who aren’t typically required to file tax returns won’t have to file an abbreviated return to receive a payment. IRS will use information from social security Form SSA- 1099 or Form RRB-1099 to generate an automatic payment. The payment will be made by direct deposit or paper check, in the same manner as the recipient’s regular benefits.
Payments nontaxable. Economic impact payments will not be included in the recipient’s income for tax purposes.
COVID-19 Employer Impact: CARES Act, Financial Resources & Employment Law
Mike Anderson will be cohosting a 60-minute interactive webinar with Karen A. Doner, Esq., to address relevant information on how to obtain a quick infusion of cash to cover your business right now, how to obtain capital to cover the cost of retaining employees, requirements and impacts of the health crisis on employers--including information related to the Coronavirus Aid, Relief and Economic Security (CARES) Act, and federal paid sick leave and emergency paid FMLA under the Families First Coronavirus Response Act.
Register here viennava.gov/covidwebinar