COVID-19

Information and recommendations for our clients due to the coronavious pandemic

Tax Law Updates! (American Rescue Plan)

On March 11, 2021, the president signed into law the American Rescue Plan Act of 2021.  This is another massive COVID relief legislation that has significant tax changes to both 2020 (retroactively) and 2021.

Below are the highlights that are most likely to affect many of our clients.  This is not comprehensive coverage of the bill, or even the tax aspects of the bill, but the most important items (from my point of view) to bring your attention to at this time.

 

2020 Retroactive Tax Law Changes

There are two significant changes that are retroactive to 2020:

  • Up to $10,200 in unemployment compensation per person is non-taxable on tax returns with Adjusted Gross Income less than $150,000. (This $150,000 limit applies whether your return is Single or Married Filing Joint – there is no increase/doubling for Joint returns.)
  • There is no repayment of medical insurance subsidy if you purchased your medical insurance on the state exchange (Affordable Care Act plan on Healthplanfinder.org) and received more subsidy than your income allowed for.

If either of these apply to you, you fall into one of three categories:

If we already filed your return – The IRS says “do not file an amended return YET.”  We have you on our list of returns that will need to be fixed as soon as the IRS gives us guidance as to how they want us to fix it (and we receive the appropriate software updates from our tax preparation software vendor).

If we completed your return but have not yet filed it – We will hold off on finalizing / filing your return until the IRS has given us guidance on how to report these items (and we receive the corresponding software updates).  We will let you know if this applies to you, so you know your return is done, except for this issue.

If we have your return in process but not yet completed – We are screening every return for these two items until the IRS and our software vendor have issued updates.  If they do not apply to you, we will finalize & file your return as normal.  If they do apply to you, we will notify you that your return is done but on hold for these updates.

 

2021 New Tax Law Highlights

These changes affect the 2021 tax year ONLY – these are not permanent changes and do not affect future years.

3rd Relief/Stimulus Payment – This is similar to the two prior payments (currently being reported on your 2020 tax return) but with a few critical differences:

  • You should receive $1,400 per person listed (claimed) on your tax return (taxpayer, spouse, and all dependents including adult dependents).
  • If your Adjusted Gross Income (AGI) is $75,000 – $80,000 (single filers) or $150,000 – $160,000 (married joint filers), you will receive a partial payment. If your AGI is over these ranges, you will receive no payment.
  • The IRS will reference your last filed return for your income & eligibility (2019 or 2020).
  • If the IRS overpays you, you will not have to pay it back. If the IRS underpays you, you will get the rest when you file your 2021 tax return.
  • If you owe the IRS taxes on prior years, you should still receive this payment.
  • Please keep documentation of the amount you received – we will ask for it for preparing your tax return next year!

Child Tax Credit:

  • Tax credit amount increased from $2,000 per child to $3,600 per child under age 6 or $3,000 per child ages 6-17.
  • This credit starts getting reduced when your AGI is over $75,000 (single filers) or $150,000 (married joint filers).
  • The IRS has been instructed to pre-pay 50% of this tax credit in monthly payments July-December 2021 based on your last filing (2019 or 2020). Further, the IRS has been instructed to set up an online portal where taxpayers can opt-out of these monthly payments (or report other changes such as new children, marriage, divorce, etc). The IRS has said that this is (nearly) impossible to do with their outdated technology, so expect delays and glitches.
  • Then your 2021 tax return will report a reconciliation of the tax credit based on your actual income in 2021. If you received too much in pre-payments, you will not have to pay back the extra, but you will have to pay tax on it as additional taxable income.  If you received too little, you will get the extra credited on your 2021 tax return.
  • Beware! The tax withholding calculation for your paycheck may already take into consideration the old child tax credit amount ($2,000). Add to that the pre-payments (for example $250 per month Jul-Dec to give you $1,500 or half of the $3,000 credit), and you could easily receive an over-payment of the tax credit and have surprise taxable income on your 2021 tax return.

Childcare Tax Credit

  • The amount of childcare expenses that qualify is increased from $3,000 to $8,000 per child.
  • The tax credit has increased from 35% to 50% (subject to reductions at higher incomes)
  • Employers have the option to offer dependent care benefits up to $10,500 per family (increased from $5,000).

Medical Insurance Subsidy (& Unemployment Income) – These changes affect both 2021 and 2022:

  • The income qualification for receiving the subsidy on medical insurance purchased on the state exchange has changed. Previously, you qualified for subsidy if your income was less than 400% of the poverty level. Now your premium cost is limited to 8.5% of your income (with no comparison to the federal poverty level), anything more is covered by subsidy.
  • If you have any unemployment income at all, you will receive the maximum subsidy, regardless of your overall income. (Please note, this is how the tax law is currently written.  This seems to be an area where the details may have been overlooked and corrective legislation could be passed later in the year.)

Extended items from 2020 legislation – There were several provisions from prior relief laws that have been extended or had additional funding:

  • The Sick Pay and Family Medical Leave Pay from the very first Families First Coronavirus Response Act in March 2020 has been extended to 9/30/21. In addition, there is a second 10 days of Sick Pay allowed for 4/1/21 – 9/30/21 if 10 days were already used in the prior 12 months. (For a refresher on this – see our original blog post about the FFCRA Act here: http://cpabellingham.com/blog/tax-extensions-new-employer-rules/ )
  • PPP / EIDL – There are no new EIDL Grant applications allowed and there is no new (3rd) PPP loan program. However, both the PPP program and EIDL programs have received additional funding.
  • Employee Retention Credit has been extended for the full 2021 year. It is still a 70% credit, up to $10,000 in wages per quarter for businesses with a 20% decrease in cash receipts (compared to the same quarter in 2019).
  • Unemployment compensation supplements of $300 per week have been extended through 9/6/21. There is no provision for this to be nontaxable in 2021 (so far).

COVID relief payments for no income / low income / and individuals experiencing homelessness

“I don’t file a tax return, how do I get my COVID-19 stimulus payment?”

This question applies to folks who have an income lower than required for filing, including individuals experiencing homelessness.  If this is you, you are still entitled to those payments from the federal government.

At this time, the IRS has closed its system for non-filers to register to receive payments.  As a result, the only way to get a payment is to file a tax return.  This requires access to a computer with internet for e-filing.  It also requires an address for receiving a check or debit card.

Between February 12, 2021 and April 15, 2021, the VITA program provides free tax filing services for low income individuals.  Due to COVID, most of these services are being provided virtually and require a computer.  However, there is very limited in-person services.  There are also free online services for filing yourself.  More details on these resources can be found here: https://www.whatcomabc.org/money-management/taxes/

After April 15th, we expect there will still be many individuals, particularly those experiencing homelessness, who will not have filed anything with the IRS to receive their payments, and will still be eligible.  We are looking forward to using our tax knowledge to assist these folks in filing and receiving their federal COVID relief payments.

If you would like to volunteer to be involved in assisting our local homeless community with filing and receiving COVID relief payments, we will be happy to accept your contact information at this time.  We will add you to our volunteer list and contact you in the spring when we start reaching out to provide community assistance.

To join our volunteer list, please:

Email: admin@thrivebusinessgroup.com

Use the subject line:   volunteer – covid relief payments for homeless

In the body of the email, please include your name, phone, and email.

EIDL Loan – Important Details You May Have Missed

As we get further into tax season, I’m seeing more clients with EIDL loans.  I’m also seeing folks not having or understanding all of the information about these loans, so here are the basics:

The EIDL loan proceeds are intended to pay for your normal operating costs of doing business to keep you open & in business when you otherwise would not be able to pay those costs due to COVID-19.

It is appropriate to use these funds for operating costs such as payroll (that is not covered by PPP loan), rent, supplies, utilities, insurance, technology, and all of the other normal operating costs of running a business.

This only applies to the costs of the business that received the loan – so if you have multiple businesses, you cannot use one EIDL loan to cover costs in the other business, you would need an EIDL loan for each business.

 

The EIDL loan funds can NOT be used for:
  • refinancing other debts
  • paying off other debts
  • making loan payments on other federal debts
  • repairing physical damages
  • paying IRS tax penalties
  • paying out dividends/draws to owners
  • paying increased salary to owners (because you’re not taking draws)
  • business expansion into new projects or new lines of business.

 

The EIDL loan also has certain loan covenants that many people missed or misunderstood.  The most critical to know about are the following:

  • For loans over $25,000, the collateral for the loan is EVERY & ALL Assets of your company – both physical and intangible assets.
  • You must obtain SBA approval before you pay out a company dividend/draw to owners. This is also true for any attempt to do the same thing but in a different way such as paying out a big bonus to an owner or paying a large payroll advance, etc.
  • You must obtain SBA approval before you sell any assets, trade-in any assets for others, or otherwise remove any funds or assets from the business (except inventory can be sold without prior approval).
  • You must give SBA 30 days notice prior to moving your business location, changing your business name, or changing your business structure
  • You must keep detailed receipts of how you used the funds for 3 years and full accounting records for the term of the loan plus 3 years. These are subject to review by the SBA.
  • You are required to provide financial statements to the SBA annually (generally due by the end of March for the prior year).

 

If you have further detailed questions about how your specific loan works or what can & cannot be covered with the proceeds, please contact the SBA loan officer working with you.  They are your best source of detailed information for your specific loan.

COVID Legislation Quick Updates 12.28.2020

 

On December 21, 2020 the House & Senate passed a new round of COVID-relief legislation, which was signed into law on December 27, 2020.  Below are the primary updates that apply to many of our clients.  Please note that this is not comprehensive (the bill is over 5,000 pages long!) and we are waiting for a lot more information on procedures for many of these provisions.

PPP Loans – new forgiveness rules

Originally forgiven loan amounts were not taxable income, but expenses paid with those proceeds were not deductible, in effect making the forgiven amount taxable.  Under the new law, the forgiven amount is not taxable AND the expenses paid with those proceeds ARE deductible.

There will be a new forgiveness application for loans under $150,000 that will not require backup documentation to the bank/lender.  However, the SBA can still review your loan so you must have the backup documentation ready if requested by the SBA.

This streamlined forgiveness application will require:

  • The number of employees you were able to retain because of the loan
  • The estimated amount of the loan spent on payroll costs
  • The total loan amount
  • Your attestation to the accuracy and compliance with the loan rules

Finally, under the original law, if you also received an EIDL Grant, this reduced the amount of the PPP loan that was forgivable.  Under the new law, your full PPP loan amount can be forgiven, even if you received an EIDL Grant.

PPP Loans – new round of funding

The new law funds a new round of PPP loan funding.  This new funding is limited to businesses who had at least a 25% decrease in revenue in any quarter in 2020 as compared to the same quarter in 2019.  If you qualify because of reduced revenue, then you can apply – even if you previously received a PPP loan in the original program.  This loan application will be made through your bank, similar to the first rounds of the program.

PPP Loans – Employee Retention Tax Credit

The original law did not allow PPP loan recipients to also receive the employee retention tax credit.  The new law does allow both, although not for the same wages, expands the tax credit, and extends the tax credit through June 30, 2021.  There are several updates including:

  • The credit is increased from 50% to 70% of qualifying wages
  • The wage limit per employee is increased from $10,000 per year to $10,000 per quarter
  • The required reduction in gross receipts has is reduced from 50% decline to 20% decline
  • New employers can now qualify to receive the tax credit

Unemployment Benefits

Federal unemployment benefits and Pandemic Unemployment Assistance have been extended into March 2021.

Economic Impact (“Stimulus”) payment

There will be another round of economic impact (“stimulus”) payments.  These will be $600 per adult and $600 per dependent child. Similar to the first payment, this is limited to individuals making up to $75,000 per year and married couples making $150,000 per year (based on your 2019 tax filing).

Similar to the first payment, this is an advanced payment on a tax credit on your 2020 tax return, so if your income was over the threshold in 2019 but below it in 2020, you will receive the payment as a credit on your 2020 tax return.

Charitable Contributions  

[This paragraph updated 1/5/2021]

The original law allowed for a new charitable contribution deduction for cash donations up to $300 for individuals who do not itemize deductions.  For 2020, this is $300 per tax return, whether it was a single individual or married couple.  The new law expands this for 2021 and future years to mean $300 per adult on the tax return, so single filers have a $300 deduction and married couples filing jointly $600.

Business meals deduction for restaurant meals in 2021-2022

Historically business meals expenses have been deducted at 50% of the cost.  The new law allows 100% deduction for business meals purchased from restaurants in 2021-2022.  Note that this does not apply to 2020.

Applying for PPP loan forgiveness – is it time?

 

Applying for PPP loan forgiveness – is it time?

This is a question we are receiving almost daily and the answer is, “it depends.”

When you apply for PPP loan forgiveness, your bank has up to 60 days to review and approve your forgiveness.  Then they send it to the SBA.  The SBA has up to 90 days to review and approve your forgiveness and make the final determination.  Combined, this is potentially a 5 month process (assuming no delays with the SBA, which is not necessarily a safe assumption).

Over the last several months, Congress has been on and off in negotiations to pass another COVID relief bill.  In those negotiations, there has been some bipartisan support for including new legislation that would provide automatic forgiveness for all PPP loans under $150,000.

If this legislation is passed, it will likely make the paperwork requirements simpler and potentially the approval process faster. There are no guarantees of this legislation being enacted, nor a guarantee that it will speed up the approval process, but these changes still seem reasonably possible.

As a result, many PPP loan recipients are waiting to apply for loan forgiveness in case an easier, faster way is introduced, while others prefer to apply now.

If your PPP loan is over $150,000 and you have used all of the funds, then yes, go ahead and start your PPP loan forgiveness application. There has been no discussion of a simpler, faster process for these loans.

If your PPP loan is under $50,000 and you were taxed as a sole proprietor with no employees at the time of receiving the loan, then there is a very simple application available for you that requires very little back up documentation. I do not expect that a simpler form will be introduced for these loans, however there is still a possibility that a faster approval process could result from new legislation.

If your PPP loan is under $50,000 and you had employees at the time of receiving the loan, then there is a very simple forgiveness application available for you, but it does require full back up documentation including bank statements, payroll tax returns, proof of eligible payments, lease agreement, and utility bills.  If new legislation is passed, these documentation requirements may be simplified, and the approval process may be faster.

If your PPP loan is between $50,000 and $150,000, your loan is the most likely to benefit from potential new legislation as there is no simplified application at this time, and full back up documentation is required, including bank statements, payroll tax returns, proof of eligible payments, lease agreement, and utility bills. New legislation could simplify and speed up the loan forgiveness process.

Ultimately, this is an individual choice. If your bank is accepting loan forgiveness applications, you can use the existing forms & procedures to submit your application now.  If you prefer to wait for possible new legislation that might make the process easier & faster, this legislation is most likely to be passed either in December or soon after January 20th.

 

EIDL Loan Basics

I’m starting to hear reports of a few clients receiving EIDL loan funds from the SBA, and we are receiving questions on this program, so here are the basics:

The EIDL loan proceeds are intended to pay for your normal operating costs of doing business to keep you open & in business when you otherwise would not be able to pay those costs due to COVID-19.

Loan amounts vary (I don’t know how they come up with the amount they offer). Interest is 3.75%, payments are deferred for 12 months, and terms vary (I’m mostly hearing 15 – 30 year terms). The EIDL also provides an advance of $1,000 per employee up to $10,000 that is the forgivable portion of the loan.

It is appropriate to use these funds for operating costs such as payroll, rent, supplies, utilities, insurance, technology, and all of the other normal operating costs of running a business.  This only applies to the costs of the business that received the loan – so if you have multiple businesses, you cannot use one EIDL loan to cover costs in the other business, you would need an EIDL loan for each business.

If you have both an EIDL and PPP loan, you can only use the EIDL to cover PPP qualifying expenses after the PPP funds have been exhausted, and any EIDL Advance will decrease the amount of the PPP that is forgiven.

The EIDL loan funds can NOT be used for refinancing other debts, paying off other debts, making loan payments on other federal debts, repairing physical damages, paying IRS tax penalties, paying out dividends/draws to owners, or business expansion into new projects or new lines of business.

If you have further detailed questions about how your specific loan works or what can & cannot be covered with the proceeds, please contact the SBA loan officer working with you.  They are your best source of detailed information for your specific loan.

 

B. Siobhan Q. Murphy
CPA, CMA, CFM, MBA
Thrive Business Group

 

PPP Loan & Stimulus Payment Updates 5.12.2020

There have been a few significant changes in some of the rules on the PPP loans and stimulus payments, that I thought it prudent to send out the overview below.  I wish I had more clear, definitive information to share.  Unfortunately, even the definitive statements published by the IRS are subject to change.

Siobhan

 

Stimulus Check Repayments

When the stimulus payments were first announced, we assumed they would act like other advanced tax credits and have a reconciliation on the 2020 tax return resulting in additional funds or repayments, based on the situation.

On April 22, the IRS published, “there is no provision in the law requiring repayment of an Economic Impact payment.”  Based on this information, it appeared that the reconciliation would not be required, but additional stimulus funds could still be claimed on the 2020 tax return if applicable.

However, on May 6, the IRS published a requirement to return a check/funds that had been received in three situations:

1) payment received by a taxpayer who died before receiving the payment,

2) a nonresident alien who received a payment, and

3) an incarcerated taxpayer who received a payment.

The IRS also published that a spouse who received a stimulus payment for $2,400 including any of the above situations, should return $1,200 for their spouse who does not qualify.

I will be very surprised if anyone returns a stimulus check to the IRS!  It is unclear whether or not there will be a reporting requirement on the 2020 tax returns to address these situations and trigger a repayment with the tax return.  Based on this significant change in guidance, it is also unclear whether or not any of this will change again.

 

PPP Loans – expense deductions

When the SBA loan programs were first released, the EIDL program specifically stated that any forgiven amounts would be taxable income, so we assumed that PPP forgiven amounts would be too.  Then the SBA and IRS published that the PPP forgiven amounts would not be taxable income.

Then on May 1, the IRS published that the expenses paid for with PPP forgiven funds would not be deductible (thus removing the tax benefit of the forgiven amount not being taxable).  The American Institute of CPAs and several members of congress (from both major parties) are fighting the IRS on this.

The AICPA is arguing that the purpose of the forgiven funds not being taxable was to create a tax benefit and therefore the expenses should be deductible.  The members of congress are preparing additional legislation to specifically write into the law that the expenses are still deductible (but this legislation is not yet passed).

As things stand right now, the PPP forgiven amounts are not taxable and the expenses covered with those funds are not deductible.  I think there is a reasonably good chance this will change before we are preparing and filing tax returns next year, but we will not know for sure until then.

In the meantime, if you have received a PPP loan, my recommendation remains the same – keep the funds separate and track everything meticulously (both for your loan forgiveness and for your accounting).  We will have to wait to see how the tax treatment shakes out.

 

If you did not get a PPP loan… Employee Retention Credit

If you did not receive a PPP loan, have a business that is closed or significantly reduced due to the Stay Home Order, and are paying employees, you may be a good candidate for the Employee Retention Credit.

You must meet the following criteria:

  • be closed fully or partially due to the Stay Home Order
  • have more than a 50% decrease in gross revenue compared to the same quarter last year
  • be paying employees (this does not apply to self-employed or PPP recipients)

If you meet these criteria, you are qualified for a tax credit of 50% of wages paid up to $10,000 in wages per employee (or $5,000 tax credit per employee).

This tax credit is claimed on the Form 941 (payroll tax return), starting in Quarter 2 (filed in July). The Form 941 is changing (getting longer & more complicated) to accommodate this credit (and others).  A draft is currently available, but the final form has not yet been released.

As we provide payroll services for many of our clients, we will be investing our team’s time into continuing education to learn the ins & outs of this new, more complex version of the Form 941. We will be screening our payroll clients for applying this credit so we are ready for quarterly filings in July.

Physical file drop off / pick up during COVID

[Updated 12/21/2020]

Our physical office remains closed during this pandemic and we are continuing to do as much of our business electronically as possible. Please continue to use the secure client portal on our website for document transfers.

If you would like to snail mail us your documents, our address is 1325 Lincoln St. Bellingham, WA, 98229

We also have a secure dropbox to the right of our front door where you can drop your documents off.

If you need to pick something up, please note the following:

  • Our office is still physically closed with limited availability
  • You will find our front door locked – please knock loudly
  • Please wear a mask. Our team member assisting you will wear a mask too.
  • Please stay outside the office – we will hand documents in/out at the door.

Thank you for continuing to use electronic solutions as much as possible and for following the instructions above to allow us to provide this physical document service and help keep us all safe in doing so.

More PPP Funding – We Recommend You Apply NOW

[Copy of email newsletter sent out 4/23]

You probably saw in the news that there is additional Covid-19 relief funding working it’s way through The Senate and The House this week.  It is expected to be signed into law Friday, April 24th.

Often tax bills get last minute changes before being signed into law, so I generally do not address new legislation until it’s full passed and signed.  However, this is a situation where time is of the essence.

Part of this legislation is adding new funding to the Paycheck Protection Program (PPP) loan program. In essence, the PPP program allows you to cover the cost of wages or net self-employment income for 2 months and have the loan forgiven.  (See our prior newsletters on this in more detail on our website.)

The PPP loans are funded on a first come first served basis and I expect this new round of funding will run out within a matter of days.  Although there is $310 Billion in funding slated for the PPP loan program, it’s still not enough for the current need.

If you need this coverage and have not yet applied, I recommend you contact your bank’s loan department today.  PPP loan applications are being prepared now, before the law is passed, to help get people first in line to get funded.

Many of our clients have successfully received funding in this program and many were just too late in line.  Now is the time to get your loan application started with your bank to be early enough in line for funding in this upcoming second round.

As a side note, for some self-employed individuals, the state unemployment program is a better option to the PPP loan. These are very different programs – the PPP loan covers wages being paid to keep folks employed and the unemployed pays benefits to folks who are not employed.  Self-employed individuals can apply for either one (but not both at the same time). Unfortunately, I cannot tell you which program is better for your specific situation, but I recommend you consider both. (Unemployment claim info is here:

Finally, given how dramatically underfunded the EIDL program is, I do not expect it to be re-opened to new applicants, but you can monitor it on the SBA website. https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance

I hope this is useful in helping to prepare for this upcoming wave of relief funding,

Siobhan

 

B. Siobhan Q. Murphy
CPA, CMA, CFM, MBA
Thrive Business Group

Most Recent Relief Program Q&A and Corrections

[Newsletter sent to Thrive  clients 4/20/2020]

 

There are many updates on both state and federal relief programs – more than I can include in any newsletter.  Below I cover information that relates to the most common questions we are receiving and information that is new and/or different from what was previously released (and therefore is a correction to prior information provided).

If you are a current client and unable to find the answer you need using the resources below (& in prior newsletters), please email admin@thrivebusinessgroup.com and we will do our best to answer your questions.

Thank you,

Siobhan

 

Unemployment claims for self-employed

Washington state has opened for unemployment claims for self-employed individuals under the Pandemic Unemployment Assistance (PUA) program. Unfortunately, we have no additional information beyond what is published on the ESD website. As a result, we are unable to answer detailed questions about if you qualify, how much you qualify for, when you will receive benefits, etc.

All information about the PUA program and the application process is available online here:  https://www.esd.wa.gov/unemployment/self-employed

 

SBA Loan programs (EIDL / PPP)

The SBA has been so overwhelmed by applications to these programs that the SBA has shut down all new applications.  Although congress is in negotiations for additional funding & additional Covid-19 relief, as of writing this newsletter, no new laws have been passed.

PPP Loan:  If you have questions on this loan, please contact your business banking lender. They are in the best position to answer your detailed questions.

EIDL Loan / Grant: This program had $10 Billion in funding.  The SBA received over 4 million applicants requesting $400 Billion in funding. Only about 24,000 of those applications have been processed. This gives you an idea of the degree to which these relief programs are overwhelmed and underfunded. As a result, even if more funding is approved, I would be surprised if this program is re-opened for applications.

When this program was first released, it included a forgivable advance of $10,000 (acting like a grant). The SBA has now announced that this advance will be limited to $1,000 per employee up to $10,000 maximum.  They have not specified how this will apply to self-employed individuals or rental property owners.

My best guess is that self-employed individuals will count as 1 employee and receive $1,000 and that rental property owners will receive nothing. But that’s just a guess, the SBA will make their own determination of how to implement their decision.

Please note, if you were one of the first applicants to the EIDL program, your application number will start with a “2” and your application will not be processed and you must resubmit your application if the SBA re-opens their application system.

Here’s why: when the EIDL program was first released, it included a $10,000 forgivable advance for all applicants.  Then, the SBA was overwhelmed with applicants so they decided that they would only issue advances of $1,000 per employee up to $10,000.  However, their application form did not ask how many employees the applicant had.

They updated their system to ask for the number of employees and then started issuing application numbers with a “3” at the beginning.  All prior applications started with a “2” and will not be processed.  The SBA has indicated that these applicants will need to re-apply (if/when their system is reopened).

You can monitor the EIDL application system here: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance

 

Stimulus payments

The IRS has two tools available to assist you with stimulus payment issues, both located here: https://www.irs.gov/coronavirus/economic-impact-payments

If you want to check on your payment status, confirm if it’s direct deposit or check, or provide direct deposit info (in some cases), you can do so using the “get your payment” tool.

If you have not been required to file a tax return in the last two years, you can provide the IRS your info to receive your payment using the “non-filers” tool.

A few other updates recently published by the IRS:

In a previous newsletter, I explained that the stimulus payment is an advanced payment of a new tax credit on the 2020 tax return.  In the past, advanced payments of credits have been subject to a reconciliation – any extra received is repaid and any underpayments are added as a refund.

However, the IRS has now stated that they are treating this advanced credit payment differently. They will not require any repayment but they will allow claims of additional credit if applicable (for example if a child is born in 2020).

If the IRS has your bank account info on file from a previous direct deposit of a refund or for direct deposit of federal benefits (such as social security income), then they will use that bank account for your payment.  (This is the same as previously reported.)

However, if they have your bank account info from you making a direct debit payment for your tax return, they will not use that bank info.  Instead, they will mail a check, or you can use the “get your payment” tool to provide your bank info.

 

Estimated Tax Payments

The IRS updated the due date for the Quarter 2 estimated tax payment to 7/15/2020.  As a result, 2019 tax return payments, Quarter 1 and Quarter 2 estimated tax payments are all due on 7/15/2020.

 

SBDC resource website

The Small Business Development Center (SBDC) is keeping a great list of relief programs with ongoing updates.  I encourage you to monitor their resource page for additional programs and information: https://sbdc.wwu.edu/business-continuity-resources

 

Safe workplace guidelines

If your workplace is open as an essential business – or if you want to start preparing for re-opening as the Governor allows, L&I has issued the following information to assist you in ensure a safe workplace for you and your workers: https://lni.wa.gov/forms-publications/F414-164-000.pdf

 

Confirmation of your tax filing

We file your tax return after receiving your signature on the e-file authorization form. After submitting your return, we get an acknowledgment back from the IRS that your return was received.  We make this acknowledgement available to you in your secure client portal – we upload it about a week after you sign for your e-filing.   The document name will be “IRS Efile ACK 2019 [client name]”.