CORONAVIRUS – INDIVIDUAL TAXPAYERS

As the coronavirus (COVID-19) continues to affect local communities and global economies, you may have concerns about your financial well-being. Or you may be wondering about how recently passed legislation impacts you. We’re providing a high-level summary of some of the key provisions impacting individuals and recommend discussing your particular circumstances with us in more detail.

Relief available

There are several recently enacted tax changes and new or expanded benefits that might be helpful to you.

Income tax provisions:

  • The IRS extended the April 15, 2020 federal income tax filing and payment deadline to July 15, 2020. However, we continue to work on filing returns as soon as possible.
  • First quarter estimated tax payments usually due April 15, 2020 are now extended to July 15, 2020.
  • Georgia has also extended the filing and payment deadlines to July 15, 2020.

Recovery rebates:

  • Payments to individuals of $1,200 ($2,400 for joint filers) plus $500 for each qualifying child are expected to be delivered around mid-April.
  • The recovery rebate begins to phase out for taxpayers with adjusted gross income (AGI) above $150,000 for joint filers, $112,500 for heads of households and $75,000 for other individuals. If you’d like to estimate the amount you’ll receive, download the AICPA’s CARES Act stimulus calculator in excel format cares-act-stimulus-calculator
  • The payment is not taxable.
  • More details on this payment are still forthcoming.

Retirement accounts:

  • Through the end of the year, individuals who are under 59 ½ years old can take up to $100,000 in coronavirus-related distributions from retirement plans without the usual 10% penalty for early distributions. The distributions may be repaid within three years and any resulting income inclusion can be taken over three years.
  • If you were over 70 ½ at Dec. 31, 2019 you won’t have to take required minimum distributions (RMD) in 2020. If your retirement assets have taken a hit, not having to take an RMD may allow those assets to recover some value before you liquidate them..

Other benefits:

IRS PAYMENT DEADLINE EXTENDED

The Treasury Department and the Internal Revenue Service are providing special payment relief to individuals and businesses in response to the COVID-19 Outbreak. The filing deadline for tax returns remains April 15, 2020. The IRS urges taxpayers who are owed a refund to file as quickly as possible. For those who can’t file by the April 15, 2020 deadline, the IRS reminds individual taxpayers that everyone is eligible to request a six-month extension to file their return.

 This payment relief includes:

 Individuals: Income tax payment deadlines for individual returns, with a due date of April 15, 2020, are being automatically extended until July 15, 2020, for up to $1 million of their 2019 tax due. This payment relief applies to all individual returns, including self-employed individuals, and all entities other than C-Corporations, such as trusts or estates. IRS will automatically provide this relief to taxpayers. Taxpayers do not need to file any additional forms or call the IRS to qualify for this relief.

 Corporations: For C Corporations, income tax payment deadlines are being automatically extended until July 15, 2020, for up to $10 million of their 2019 tax due.

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. If you file your tax return or request an extension of time to file by April 15, 2020, you will automatically avoid interest and penalties on the taxes paid by July 15.

The IRS reminds individual taxpayers the easiest and fastest way to request a filing extension is to electronically file Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses must file Form 7004.

This relief only applies to federal income tax (including tax on self-employment income) payments otherwise due April 15, 2020, not state tax payments or deposits or payments of any other type of federal tax. Taxpayers also will need to file income tax returns in 42 states plus the District of Columbia. State filing and payment deadlines vary and are not always the same as the federal filing deadline. The IRS urges taxpayers to check with their state tax agencies for those details. More information is available at https://www.taxadmin.org/state-tax-agencies.

The IRS established a special webpage on IRS.gov/coronavirus to include the above tax-related information. This page will be updated as more information is available.

GA DEPARTMENT OF LABOR NEWS

The Georgia Department of Labor (GDOL) has adopted an emergency Rule 300-2-4-0.5 Partial Claims, effective March 16, 2020. The rule mandates all Georgia employers to file partial claims online on behalf of their employees for any week during which an employee (full-time/part-time) works less than full-time due to a partial or total company shutdown caused by the COVID-19 public health emergency. Any employer found to be in violation of this rule will be required to reimburse GDOL for the full amount of unemployment insurance benefits paid to the employee. Download the How Employers File Partial Claims Desk-Aid found on the GDOL Alert Page and follow the step-by-step instructions.

Filing partial claims results in your employees receiving unemployment insurance (UI) benefit payments faster, usually within 48 hours for claims filed electronically. Employees for whom you file a partial claim are NOT required to report to a Georgia Department of Labor career center, register for employment services, or look for other work.

Please continue to monitor our website at gdol.ga.gov for any updates to these guidelines.

COVID-19 VIRUS UPDATE

Hello!  

Like you, we’re closely monitoring developments related to the COVID-19 virus, particularly the guidance offered by local, state, and federal health officials.  The health and safety of our clients and our employees remain our top priority.  With that said, we’d like to make you aware of a few items:

  1. While there has been significant discussion by the President and Congress regarding extending the April 15th deadline, that is not official yet.  We are proceeding as normal with an April 15th deadline.  If this changes, we will send out another alert to our clients.
  2. Our office is currently open.  Our employees have the ability to work from home, and more than likely, some of them will need to in the coming days. However, we are not requiring them to do so at this time.
  3. If you have an in-office appointment with us, we would strongly recommend that you consider having your appointment by phone instead.  We have the ability to receive support documents remotely or by mail.  Please call our office for details.

Whether we are in our office or working remotely, we have the ability to continue to provide responsive, high-level service to you, our valued clients.

Rest assured that the Loggins, Kern & McCombs team is prepared to support our clients during this challenging time.  Thank you for your trust in us.

Miranda Kern

Gina McCombs

Brandy Hatfield

Kimberly Fourman

Partners, Loggins Kern and McCombs PC