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COVID-19 Update

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We understand that everyone is concerned about Coronavirus (COVID-19). We are as well, which is why we are taking precautions to keep our clients and our staff safe and informed. We want to let you know how our business is addressing this situation.

Our office is still open for appointments. Here are the proactive steps we have put in place:

  1. We have rolled out new software features which will help you access and upload information remotely. Our new client portal and phone application will allow you to send, receive, and sign documents electronically. You will also have access to your information any time you need it. You can learn more about your client portal by watching a video at https://www.jg-cpas.com/tr-client-portal.php. If you haven’t received a link to your portal, please let us know at info@JG-CPAs.com and we will set it up for you. The phone application allows you to scan and upload seamlessly. If you do not have the application on your phone, type “Onvio Client Center” (created by Thomson Reuters) into your app store.
  2. Please call (208)350-7304 or email info@JG-CPAs.com if you want to schedule a phone appointment in lieu of a live visit.
  3. To accommodate any concerns our clients and staff may have, we have taken the following additional steps:
  • We have increased the cleaning and sanitation of our offices.
  • We have added additional alcohol-based sanitizer around our office.
  • We informed our staff if anyone is feeling ill (fever or cough), they need to stay home.

During this difficult time, we are committed to serving our clients and staff with care and consideration. The COVID-19 situation is changing rapidly, as are the updates to various relief efforts. We will continue to monitor news and keep you updated as clarification is provided.

Thank you for being a valued client and for your continued trust as we manage through this time together. If you have any questions or need further assistance, please call us at (208)350-7304 or email us info@JG-CPAs.com.

(Below are important links and highlights. Note that the information below may not be the most recent information as the government continues to address the pandemic. The links will take you to sites that will have current information. Contact us if you have specific questions or need assitance.)

Below are important Links and Highlights:

IRS Response www.irs.gov/coronavirus.

SBA Response https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resource

Paycheck Protection Program https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses

US Chamber of Commerce https://www.uschamber.com/

Federal Government Response https://www.usa.gov/coronavirus

Idaho's Response https://rebound.idaho.gov/

Highlights

Federal & State Deadlines (Updated - 4/2/2020)

Federal: The 2019 income tax filing and payment deadlines for all taxpayers who file and pay their Federal income taxes on April 15, 2020, are automatically extended until July 15, 2020. This relief applies to all individual returns, trusts, and corporations. This relief is automatic, taxpayers do not need to file any additional forms or call the IRS to qualify.

This relief also includes estimated tax payments for tax year 2020 that are due on April 15, 2020.

Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020. You will automatically avoid interest and penalties on the taxes paid by July 15.

Individual taxpayers who need additional time to file beyond the July 15 deadline can request a filing extension

Idaho: Governor Little has extended the 2019 Idaho income tax filing and payment deadlines from April 15, 2020, to June 15, 2020. The extension applies to all taxpayers – including individuals, businesses, and entities – regardless of the amount owed. Penalty and interest won’t apply if taxpayers file their return and pay the income tax they owe by June 15.

Other States: We urge you to check with your state tax agencies for those details. More information is available at https://www.taxadmin.org/state-tax-agencies.

CARES Act for Businesses

See Berkeley Law for updates (Click Here)

Paycheck Protection Program (Updated - 6/15/2020)

Recent legislation (titled HR7010) has passed, offering adjustments to PPP loans—particularly regarding forgiveness calculations. Key changes are as follows:
  • Covered time period extended—The period of time to use loan money has been extended from 8 to 24 weeks. This means that you have more time to apply funds to qualified expenses that maximize loan forgiveness.
  • Social Security payments deferred—Originally under the Cares Act, employers who received the PPP Loan could not also defer employer social security tax payments. HR7010 adjusted this. Now, any employer with social security payments due between March 27, 2020 and December 31, 2020 can pay half of the amount due by the end of 2021 and the remainder by the end of 2022.
  • Loan payment deferral extended—The original 6-month deferral for repayment of PPP loans has been extended to 10 months. Payments are only required on the amount of the loan that is not forgiven.
  • Payroll threshold adjusted—Originally, the Department of Treasury and the SBA determined that 75 percent of a PPP loan had to be used for payroll in order for the loan to be forgiven. The 75 percent threshold has been adjusted to 60 percent. In a statement on 06/08, Treasury clarified "If a borrower uses less than 60 percent of the loan amount for payroll costs during the forgiveness covered period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60 percent of the loan forgiveness amount having been used for payroll costs." This means that borrowers are still eligible for partial loan forgiveness even if they use less than 60% of the loan amount for payroll costs.
  • Safe harbor date extended—The original Cares Act included safe harbor exceptions to restore or attempt to restore full-time employees and any pay reductions by June 30, 2020. These exceptions still exist, but the date to restore has been adjusted to December 31, 2020.
  • Loan term date extended—All new PPP loans effective after the passing of HR7010 will have a five-year term. Businesses that received a loan prior to the new legislation can adjust the loan term from two to five years. Individuals will need to work with their lender to amend loan terms.

CARES Act for Individuals (Updated - 3/28/2020)

RECOVERY CHECKS – KEY POINTS

Recovery check distribution amounts—Single taxpayers will receive $1,200 and joint taxpayers will receive $2,400. There is an additional $500 for each qualifying child.

The recovery check is considered a credit for 2020, but paid in advance.

The amount is reduced (but not below zero) by 5% of each dollar a person’s adjusted gross income (AGI) exceeds. Consider the following:

  • Married filing joint: $150,000 (AGI over $198,000 does not qualify)
  • Head of household: $112,500 (AGI over $146,500 does not qualify)
  • Single: $75,000 (AGI over $99,000 does not qualify)

Consider the following example:

  1. A married couple with no children has an AGI of $190,000.
  2. $190,000 is $40,000 above the $150,000 amount shown above.
  3. The couple’s check is reduced by 5% of $40,000, which is $2000.
  4. Therefore, they would receive a check for $400. (i.e., $2400 - $2000 = $400)

Other key details for recovery check eligibility include:

  • Nonresident aliens are not eligible for the rebate.
  • If a taxpayer has an outstanding debt (which the IRS would typically offset a refund by paying that debt), recovery dollars will not be used to offset that debt.
  • Amount will be direct deposited into the account on the last filed return. Every taxpayer will receive a letter indicating their recovery check was dispersed. If the letter is not received, there will be a specific phone number to call to have the check re-issued.
  • AGI will be accessed from 2019 returns if filed at the time of determination. Otherwise, 2018 returns will be used. Taxpayers who have not filed a return will not receive a check unless they did not file because they only have SSA-1099 or RRB-1099 (social security). The Treasury Department will review those forms for 2019 and issue the appropriate amount via check.

UNEMPLOYMENT – KEY POINTS

Any employee who was furloughed or part of a layoff is eligible for state unemployment. Details are as follows:

  • Unemployment amount via the state typically ranges from 30-50% of the standard wage, depending on the state.
  • The amount a person will receive for unemployment over four months will be the amount the state would already provide, but increased by $600 per week through July 31, 2020. For example, if a person is eligible for $300 weekly, they will receive $900 per week over four months or through July 31, 2020, whichever comes first.
  • If an employee is already unemployed due to COVID-19, the $600 weekly additional payment will be paid retroactively.
  • Self employed individuals, independent contractors and gig workers are eligible for unemployment under this program.

RETIREMENT DISTRIBUTIONS – KEY POINTS

Ability to withdraw up to $100,000 retirement in 2020 for COVID-19-related purposes without 10% penalty—The distribution is taxable over a 3-year period unless electing to pay it back within 3 years. This essentially equates to a loan unless it is not paid back within the
3-year timeframe. This rule applies to individuals:

  • Diagnosed with COVID-19
  • Who have family (spouse or dependent) who have been diagnosed with COVID-19
  • Who have adverse financial consequences in relation to COVID-19
  • Who include the distribution in taxable income (unless they elect the 3-year payback)

Waived required minimum distributions (RMD) from individual retirement accounts—The required minimum distribution for 2020 has been waived. 

This also applies to retirees who turned 70 1/2 in 2019 and are required to take their RMD by 4/1/20.  If the retiree that turned 70 1/2 in 2019 still intends to take their RMD, this must happen by April 1, 2020—otherwise, the same penalty for late withdrawal will be applied.  

CHARITABLE CONTRIBUTIONS - KEY POINTS

Above-the-line charitable contribution—For tax year 2020, if a taxpayer does not itemize deductions, they can deduct up to $300 in addition to standard deduction for cash charitable contributions (no stock contributions).

Charitable contribution limitation by AGI—The 60% adjusted gross income limitation has been removed for 2020 (other than from donor advised funds).

Family and Medical Leave Act (FMLA) Expanded for COVID-19 (Updated - 3/20/2020)

“The Families First Coronavirus Response Act” (FFCRA), which goes into effect April 2, 2020 and expires December 31, 2020, responds to the coronavirus outbreak by providing additional assistance in the areas of COVID-19 testing, sick leave, food assistance and more. We’ve compiled key details of FFCRA that we believe you need to know.

In summary, the Act:

  • Requires private insurance plans to provide free COVID-19 testing
  • Requires employers to provide emergency paid sick leave to workers affected by
    COVID-19 and expands family and medical leave.
  • Offers increased funding for state unemployment insurance, food stamp and nutritional programs.
More specifically, here’s what The Families First Coronavirus Response Act means for both business owners and employees in the areas of sick leave and expanded family and medical leave.
  • Employees are eligible for up to two weeks of sick leave (full pay for self, 2/3 pay for family care) for illness, quarantine or school closures.
  • Employees are eligible for up to 12 weeks of FMLA leave for school closures (10 days unpaid and then up to 10 weeks at 2/3 pay).
  • FMLA expansion covers:
    • Employers with fewer than 500 employees
    • Employees who have been employed for at least 30 calendar days (some exclusions may apply)
    • Employees who must care for children under the age of 18 in the event of school and place-of-care closures or if care provider is unavailable due to a public health emergency with respect to COVID-19.
  • Emergency paid sick leave covers:
    • Employers with fewer than 500 employees
    • All employees no matter the length of employment (some exclusions may apply)
Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern.

Department of Labor Links:
  • FFCRA: Questions and Answers
  • As part of the FFCRA, employers are required to provide notice to employees of the Act’s provisions. An example of the required notice has been made available by the Department of Labor and can be downloaded here: FFCRA NOTICE TO EMPLOYEES.
  • In addition, the Department of Labor has made available a FAQ page discussing the notice requirements: FFCRA NOTICE – FAQ.

Resources (inlcuding PPP Loan Forgiveness Application)

U.S. Small Business Administration (SBA) offering disaster assistance in response to COVID-19 (Updated - 3/20/2020)

Under the recently enacted Coronavirus Preparedness and Response Supplemental Appropriations Act (the Act), small businesses that have suffered substantial economic injury as a result of COVID-19 can apply for low-interest federal disaster loans through SBA. Small businesses and nonprofits can apply for working capital loans of up to $2 million.

We’ve highlighted the following key details of the Act for you here, but you can also learn more by visiting the COVID-19 disaster assistance page on SBA’s website.

  • State governors must first request access to the Economic Injury Disaster Loan program. Once the declaration is made, information on the application process for disaster loan assistance will be made available to affected small businesses within the given state.
  • Loans carry an interest rate of 3.75% for small businesses and 2.75% for nonprofits.
  • Loans can be used to cover accounts payable, debts, payroll and other bills.
  • Loans can be offered with long-term repayments in order to keep payments affordable—up to a maximum of 30 years. Terms are determined on a case-by-case basis.
  • Businesses will apply for loans online and select “Economic Injury” as the reason for seeking assistance.

SBA offers disaster assistance via its customer service center. If you have questions or want to check if your state is eligible, contact U.S. Small Business Administration via phone at 800.659. 2955 (TTY: 800.877.8339) or e-mail  disastercustomerservice@sba.gov.