2019 Filing Season & COVID-19 – Update #2

To Our Clients:

Due to the COVID-19 outbreak, we will be using this site to keep you abreast of the tax and business impacts of new legislation as well as filing and payment delays allowed by the federal government, and state and local municipalities.  Please subscribe to this blog, or check in frequently to make sure you have the most recent information.

TAX FILING AND PAYMENT DELAYS

Finally the state of Oregon has agreed to delay its filing deadline for many taxpayers in a way that is mostly (but not completely) similar to the recent decision by the U.S. Treasury to delay tax filing and payments normally due April 15th to July 15th.  This means that individuals, trusts, and corporations whose filing deadline was normally 4/15 can now wait to file a return or an extension until July 15th, and can also defer 2019 taxes normally due as well.  For estimated tax payments due 4/15, the State of Oregon elected NOT to change that deadline, so even if a taxpayer takes advantage of the filing and payment delay for 2019 taxes, they will still have to estimate and pay their 1st quarter Oregon taxes, even though they can defer their federal estimated taxes.

Fortunately for our clients who file California returns, the FTB announced on March 13th that all California taxpayer are granted an automatic extension of time to file and pay both 2019 taxes as well as 2020 1st quarter estimated taxes.

However, our focus at Wilken & Company will be to continue working as if the April 15th deadline is unchanged.  Since we don’t know what the future will bring, we can’t take the risk of not completing our work while we are all still able to do so.  We are planning to prepare and file all returns and extensions that would normally be due 4/15 by that date and will provide our clients with payment vouchers for 2019 taxes due and for estimated taxes due for 2020, as we always have.  Clients can determine when (between 4/15 and 7/15) they would like to make those payments, remembering that there is no delay allowed in making the Oregon estimated tax payments.  As we’ve said before, we advise anyone paying after the normal deadline to be sure to record the dates of any “late” payments so that we can request proper penalty relief when the time comes.

Since our offices are now closed to the public, we will be delivering tax returns and payment vouchers either via courier or electronically.  We will be in touch with each of you to determine which method works best for you.

After 4/15, assuming we are all still healthy, we will begin to prioritize the completion of any tax returns where clients are expecting refunds.

We don’t know yet whether the May 15th deadline for non-profit organizations’ Form 990 will be delayed, as there has been no specific guidance from Treasury yet.  However, this matter is currently under discussion.  Meanwhile, Oregon has specifically stated that nonprofit organizations with a May 15th deadline are not being granted any relief.  Many NPOs have had to close their doors or substantially alter their operations, so it would seem logical to also grant filing relief, but for now we have to assume that the deadline for calendar year 990’s is still May 15th.

At the federal level, several pieces of legislation designed to provide COVID-19 relief were enacted.  The Oregon legislature will convene soon to craft its own assistance package, and the City of Portland recently did so.

At the federal level, here is what we know so far:

FAMILIES FIRST CORONAVIRUS RESPONSE ACT

Businesses with fewer than 500 employees will receive payroll tax credits for providing newly mandated paid sick leave and paid family leave for employees affected by the Coronavirus outbreak.  The refundable credit will be 100% of the costs, up to certain limits, and will be claimed on an employer’s Form 941 so that the tax benefit can be realized quickly.

Smaller businesses with less than 50 employees can be exempt from certain of the mandated paid leave requirements, but the exemption will only be granted on a case by case basis.  However, there will be a non-enforcement provision in place for 30 days after enactment, so that businesses have time to adjust.

Please note that this is new legislation and some of the provisions will likely require further clarification, so patience is required as we work through the process of staying abreast of these fast-moving changes.

Our clients who use payroll service bureaus should contact their provider to determine how wages paid under the new law should be categorized to ensure that they receive their full tax credits.  Clients running their own payrolls are at greater peril, as it will take time for each business owner to fully understand these provisions and then to properly report qualifying wages and related credits on the Form 941.

More information about the new law is available here: https://www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus

STIMULUS PACKAGE

The Senate approved today a proposed $2 trillion stimulus package that would contain a number of provisions affecting businesses and individuals.  The package will include checks issued to individuals, a  zero interest loan/grant fund available for businesses, robust unemployment benefits to laid off employees as well as, for the first time, unemployment benefits for self employed individuals who have lost their revenue stream due to the Corona virus outbreak.  The bill now goes to the House, and if unchanged in its current form is expected to be signed into law.  Once that happens, we’ll provide another update on its provisions.

We hope all of you are staying safe and well during this crisis and we thank all of those who are working tirelessly to provide health care, food delivery and other basic services to those in need.

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