COVID-19 PANDEMIC PROMPTS MANY TAX CHANGES

The government responded to the COVID-19 pandemic by giving breaks for the American taxpayers from filing forms to paying taxes.

Filing and Payment Suspensions

The IRS released a notice stating that they are suspending much federal tax amount and filing deadlines to July 15, 2020. For people whose filing and paying falls on or after April 1, 2020, and before July 15, 2020. This applies to all the taxpayers. There will no penalty or interest for the failure of completing the form given on the notice. The IRS mentioned (Notice 2020-23) they grant automatic relief for the affected taxpayers they don’t want to submit the form or documents. The relief process takes time so the IRS posted FAQs at irs.gov.

Payroll tax credits

On March 18, Congress passed and President DONALD TRUMP signed the Families First Coronavirus Response Act, P.L. 116-127, which is a general relief bill. That got some tax credits for the companies who provide sick or medical leave for their workers who missed working for various COVID-19 reasons.

Payroll tax credit for required paid family leave

The Emergency Family and Medical Leave Expansion Act (EFML)provides employers with 100% payroll tax credits. This act requires companies less than 500 workers to give public health emergency leave under the Family and Medical Leave Act. Companies less than 50 workers grant leave for their workers who want to take care of their children under 18 because the school and daycares are closed.

This credit is only for some wages paid from April 1, 2020, until December 31, 2020. But this applies against the employer portion of Sec. 3111(a) or Sec. 3221(a). The workers get a pay of $200 to $10,000 for family leave.

This Act provides a refundable credit against IT for a Self-Employed Individual who often does business is qualified to receive paid leave under the EFML Expansion Act.

Coronavirus Aid Relief and Economic Security

This Act passed on March 27, planned an aid package of $2 trillion to improve the economy. Because the Coronavirus Pandemic gave a great fall on the economy. They are not only focusing on taxes many tax provisions are also on the bill

  • Recovery rebates
  • Payroll tax credit refunds
  • Worker retention credit
  • Retirement plans
  • Payroll tax delay
  • Corporate alternative minimum tax (AMT)
  • Interest limitation
  • Aviation taxes
  • Health plans

Payroll tax credit for required paid sick leave

The Emergency Paid Sick Leave (EPSL) Act provides workers with 100% payroll tax credits. This applies to the company with less than 500 workers which provide 80 hours of paid sick leave for workers who are unable to work because of having COVID-19 or because of taking care of someone who has COVID-19. The companies with less than 50 workers are allowed to take leave for taking care of children under 18.

This Act provides a refundable credit against IT for a Self-Employed Individual who often does business is qualified to receive paid leave under the EPSL Act.

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