COVID-19_Blog_Masthead

Has the IRS Form 5500 filing deadline been delayed for calendar year 2019 filings?

Posted by Bonita Hatchett-Bodle

Apr 24, 2020 3:35:52 PM

No. IRS Notice 2020-23 has extended the Form 5500 filing deadline until July 15, 2020, for filings otherwise required to be made between April 1, 2020, and July 14, 2020, including those filings with deadlines falling within the those dates due to a plan administrator’s request for a filing extension on IRS Form 5558, Application of Extension of Time to File Certain Employee Plan Returns (Form 5558).

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Topics: IRS Form 5500, IRS Notice 2020-23

Has the filing deadline for IRS Forms 990 been delayed for 2019 filings?

Posted by Bonita Hatchett-Bodle

Apr 24, 2020 3:33:26 PM

Yes. IRS Notice 2020-23 has extended the deadline for filing Forms 990, Return of Exempt Organization from Income Tax, which applies to voluntary employees’ beneficiary associations (VEBAs) in addition to other arrangements. Forms 990 that were required to be filed after April 1, 2020, and before July 15, 2020, are now required to be filed by the new July 15, 2020 deadline.

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Topics: IRS Notice 2020-23, IRS Form 990

Has April 15, 2020, estimated tax payment deadline been extended?

Posted by Bonita Hatchett-Bodle

Apr 24, 2020 3:31:53 PM

Yes. IRS Notice 2020-23 extends relief to individuals required to make estimated tax payments due beginning April 15, 2020, until June 15, 2020. Accordingly, any individual that has a quarterly estimated tax payment due on or after April 1, 2020, and before July 15, 2020, may make the estimated payment by  July 15, 2020 without penalty.

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Topics: estimated tax payments, IRS Notice 2020-23

Is it possible for an employer to use the FFCRA tax credit currently without waiting for the filing of the employer’s 2020 tax return?

Posted by Bonita Hatchett-Bodle

Apr 22, 2020 12:44:39 PM

Yes. The employer is able to use the FFCRA tax credit presently by reducing the current quarterly payroll tax obligation by the amount of the FFCRA tax credit, without the need to wait until the employer’s annual tax return is filed. Form 7200 is not required to be filed in order for the employer to use the tax credit now as opposed to when the employer’s annual tax filing is made.

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Topics: FFCRA tax credit, IRS Form 7200

Is it possible for an employer to use the Employee Retention Tax Credits (ERTC)  currently without waiting for the filing of the employer’s 2020 tax return?

Posted by Bonita Hatchett-Bodle

Apr 22, 2020 12:43:26 PM

Yes. The tax credit is equal to 50% of qualifying wages not in excess of $10,000 per employee for 2020, which caps the tax credit at $5,000 per employee. If an employer employs 100 or fewer employees, qualifying wages includes all wages whether or not in the form of paid leave or for the performance of services. Employers employing 100 or more employees may only include paid leave in the determination of qualifying wages for ERTC purposes. The employer is able to use the tax credit presently by reducing the current quarterly payroll tax obligation by the amount of the tax credit, without the need to wait until the employer’s annual tax return is filed. Form 7200 is not required to be filed in order for the employer to use the tax credit now as opposed to waiting until the filing of the employer’s annual return.

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Topics: ERTC tax credit, IRS Form 7200

May an employer receive a cash advance on the ERTC and the FFCRA tax credits by filing IRS Form 7200?

Posted by Bonita Hatchett-Bodle

Apr 22, 2020 12:41:48 PM

Yes. Employers may receive an advance payment of tax credits if the employer’s employment tax obligation is less than the amount of the FFCRA tax credit and the ERTC to which the employer is entitled. Eligible employers should first reduce their quarterly employment tax deposits to account for the tax credits. Thereafter, an employer may request payment of an amount determined by subtracting the employment tax liability from the available tax credits. In the event the employment tax liability is less than the tax credits, the employer may use Form 7200 to request a refund of the excess. Alternatively, the employer may wait to obtain the refund until the employer claims the tax credits on the employer’s annual tax return.

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Topics: FFCRA tax credit, advance tax credit, ERTC tax credit, IRS Form 7200

When may an employer request a cash advance on the ERTC and the FFCRA tax credits?

Posted by Bonita Hatchett-Bodle

Apr 22, 2020 12:39:27 PM

An employer may request advance payment of the tax credits anticipated for a calendar quarter, at any time before the end of the month following the quarter in which the employer paid the qualified wages. An employer may file Form 7200 several times during each calendar quarter if necessary. Form 7200 is filed by faxing the completed document to 855-248-0552.

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Topics: FFCRA tax credit, advance tax credit, ERTC tax credit, IRS Form 7200

What is the time period for calculating payroll under the Paycheck Protection Program?

Posted by Bonita Hatchett-Bodle

Apr 20, 2020 3:31:27 PM

An applicant may determine the number of employees and payroll by using a 12-month look-back period or by using the information from calendar year 2019. For seasonal businesses, the applicant may use average monthly payroll for the period between February 15, 2019, or March 1, 2019, and June 30, 2019. An applicant that was not in business from February 15, 2019, to June 30, 2019, may use the average monthly payroll costs for the period January 1, 2020, through February 29, 2020. The Small Business Administration (SBA) stated that borrowers may use their average employment over the same time periods to determine their number of employees, for the purposes of applying an employee-based size standard. Alternatively, borrowers may elect to use the SBA’s usual calculation: the average number of employees per pay period in the 12 completed calendar months prior to the date of the loan application (or the average number of employees for each of the pay periods that the business has been operational, if it has not been operational for 12 months).

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Topics: payroll costs, Paycheck Protection Program

Do leased employee payments count in determining payroll costs?

Posted by Bonita Hatchett-Bodle

Apr 20, 2020 3:29:40 PM

Yes. The SBA FAQs addressed whether amounts paid to leased employees through a third-party payer such as a payroll provider or a professional employer organization (PEO) in order to process payroll and report payroll taxes constitutes PPP loan payroll documentation. This is important both for determining the amount of the borrower’s maximum loan amount and for documenting how loan proceeds are used for a loan made between February 15, 2020, and June 30, 2020, for loan forgiveness purposes.

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Topics: Paycheck Protection Program, leased employees

May a PPP loan be used to pay for sick leave beginning February 15, 2020, and ending June 30, 2020?

Posted by Bonita Hatchett-Bodle

Apr 20, 2020 3:27:40 PM

Yes, but not for sick leave for which an employer receives a tax credit under the Families First Coronavirus Response Act (FFCRA). The SBA FAQs confirmed that PPP loans may be used during the eight-week period beginning February 15, 2020, and ending June 30, 2020, in order to cover paid sick leave. However, the CARES Act excludes qualified sick and family leave wages for which a credit is allowed under Sections 7001 and 7003 of the FFCRA. For this reason, the PPP loan cannot be used to cover the employer’s expense for paid sick and childcare leave under the FFCRA for which the employer is granted a 100% tax credit to cover the expense.

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Topics: sick leave, Paycheck Protection Program

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