Matt Keefer, a Director of Tax Services at Gorfine, Schiller & Gardyn (GSG) discusses recent tax changes in response to the COVID-19 pandemic, which include the new July 15th filing deadline extension and the Families First Coronavirus Response Act.

New July 15th Tax Deadline Extension

The income tax filing deadlines were extended until July 15th, and that's for all taxpayers who are filing but it’s also for payment. It covers not just 2019 taxes that are due, but anyone who may have a 2020 first quarter estimate that's due on April 15th.

If you are anticipating a refund, it still makes sense to file on time, because clearly, you want to get that extra money now. The IRS is still open for business, and they've specifically said that they are working on getting the refunds out as quickly as possible.

There is one consideration for delaying the filing. Under the new CARES Act, many taxpayers, who meet the given income requirements, will receive a one-time check from the federal government. The check is based on your 2018 or your 2019 tax return. If you anticipate that your 2019 return is going have much more income than 2018, it might be a potential reason to delay filing and receive the maximum amount possible for your check.

Just remember, July 15th is not that far away. Do not ignore and put the new deadline out of your mind. Start gathering your documents and be prepared to make your payments July 15th.

June 15th estimates are still due June 15th right now, for those making estimated payments.

It’s also important to keep state tax filing deadlines in mind because every state, especially during this time, has their own set of rules. Most states are following the federal July 15th deadline, but there are some that have yet to announce an extension.

FamiliesFirst Coronavirus Response Act

The Families First Coronavirus Response Act is a little more specific to people directly impacted with coronavirus. Employers with fewer than 500 employees are required to provide paycheck leave to employees who are forced to stayhome due to quarantining,caring for a family member, or caring for a child when the school or a place of care is closed.

To help employers with the new rule, they've allowed new payroll tax credits to the employers. If you have employees that are directly impacted, are sick and have to stay home and quarantine, or arestaying home to take care of a family member or a child because of the school or daycare being closed, the new payroll tax credits apply.

The payroll tax credits are limited to $200 per day per employee, but increase up to $511 per day if the employee is on leave because of the following scenarios:

• They're subject to federal, state, or local quarantine orders related to COVID-19
• They've been advised by healthcare provider to self-quarantine due to concerns related to COVID-19
• They're experiencing symptoms of COVID-19 and seeking a medical diagnosis.

Employers are also limited to 10 days of wages per employee.

Unfortunately, as it currently stands, there is not much guidance for the Families First Coronavirus Response Act on how to handle the payroll tax credits. Essentially, employers anticipating they’re going to get a credit should consider reducing their payroll deposits that they're making weekly, monthly or quarterly, in order to account for the credit.

In addition to employer tax credits, there's an equivalent credit for self-employed taxpayers. This credit would offset income taxes. However, it would not be 2019 income tax, but rather 2020, so if a self-employed individual is making estimated tax payments, they could consider this into their quarterly estimates for a potential tax credit.

COVID-19 news is moving at a rapid pace, but GSG will continue to stay on top of the guidanceand provide recommendations on how to respond to these notices and how to take advantage of the different tax credits. Please contact us with any questions.

Matt Keefer has more than 15 years of public accounting experience. His responsibilities include preparing and reviewing income tax planning for corporations, partnerships, individuals and not-for-profit organizations, responding to federal and state tax notices, tax planning for high net worth individuals, and representing taxpayers before the IRS and state governments.

About Gorfine, Schiller & Gardyn, P.A. 

Gorfine, Schiller & Gardyn, P.A. (GSG) is a Maryland-based full-service certified public accounting firm offering a wide range of accounting and consulting services to clients of all sizes. GSG employs the traditional business practices of a small company, delivering solid advice and solutions, and providing unparalleled client service. One of the greatest assets GSG brings to its clients is a team of experts trained to the highest industry standards. As problem solvers with an entrepreneurial drive, GSG associates are committed to the success of their clients’ businesses. For more information, click here.