In the last two weeks there has been a flood of new tax laws, new regulations, expanded benefits, low cost loans (some of which can be forgiven) and coming soon- stimulus checks.
Details and updates on these rescue plans are released several times a day and include new information for requirements, limitations, oversight, and when one might expect these stimuli to hit their bank accounts.
The first legislation signed into law was the Stafford Disaster Relief and Emergency Act on March 13, 2020. This temporary legislation extended the tax filing and tax payment deadline from April 15 to July 15 of 2020. See our post on March 20th.
The second piece of relief is called The People First Initiative. This extended or suspended most all IRS compliance and enforcement actions from April 1 to July 15 of 2020. In other words, there will be no notices, no threatening letters, no audits and installment payments are suspended during this period.
The third enactment was signed on March 18, 2020; called the Families First Coronavirus Response Act (FFCRA) is intended to keep employees paid while out for COVID-19 related absences . Effective April 1, 2020 the FFCRA provides for up to 80 hours of paid sick leave either for the employee’s own health needs or to care for family members affected by the COVID-19 outbreak. Payments up to $511 per day. In addition to that, an employee who is unable to work because of the need to care for a child whose school or child care facility is closed due to the COVID-19 outbreak can receive up to $200 a day for up to ten weeks. Here’s the best part: 100% of the cost of these benefits paid to employees are reimbursed by the federal government, including the employers portion of payroll taxes and health insurance premiums. Equivalent benefits are available to self-employed individuals also! Note that the FFCRA ends December 31, 2020.
The fourth new Act, passed on March 27, 2020 is called The CARES Act is a stimulus package that will provide cash to taxpayers. This $2.2 trillion stimulus provides immediate cash assistance to taxpayers of $1,200 each and $500 for every child under the age of 17. And that’s not all. It also waives student loan payments for up to six months and interest will NOT accrue during this period, state unemployment claimants will receive an additional $600 per week for four months, retroactive to January 27, 2020 in addition to their state unemployment benefits they are receiving.
- Foreclosures will be prohibited on all federally-backed mortgage loans for 60 days beginning March 18, 2020 and up to 360 days of forbearance.
- Provides an additional $350 billion for new SBA loans for financial assistance to businesses and incentivizes them to keep employees on payroll.
- This is in addition to the SBA Disaster Loan Program that is outlined in our post on March 27th
- All SBA fees are waived.
- Loans are 100% guaranteed by the government.
- Loan amounts are forgiven that are used for payroll, mortgage interest, lease, and utility payments between February 15 and June 30 of 2020.
- Loans are capped at 4% interest with terms of up to 10 years. Payments can be deferred for up to one year.
- Loans may also be used- but not forgiven- for other specified purposes.
Today’s post is intended to give you a general understanding of these new laws and regulations that have recently been signed into law.
We understand that you have a lot of questions about these new benefits and are eager to take advantage of the financial assistance they provide. Please be patient while we wait for further guidance from Federal and State officials. We will release information as it becomes available. Be sure to check our website daily for updates.
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