Weekly Digest – 8 July 2020
One of the baffling aspects of the COVID-19 pandemic is the fact that we don’t yet know precisely how deadly this virus is. Estimates of the fatality rate range from a low of 0.64%, estimated by analysis of data by Australian researchers, to a high of 16% in Belgium. Many infections are asymptomatic or mild, which means there may be 10 unrecorded cases for each documented infection. What we do know, though, is that cases continue to climb across the country, and that more governors are requiring face covering and restrictions on activities. Local officials in Texas, Arizona and Florida say the recent increase in cases in those states is coming from reopening.
We encourage all of our clients to do all they can to stay safe and stay well!
CARES ACT UPDATES
Rumors continue to circulate about a second round of stimulus payments later this summer, but until Congress and the Senate return from their summer recess on July 20, not much is expected to happen. One suggestion for extending unemployment benefits is to leave the dates and the total amounts open ended but to tie the amounts to economic triggers. As unemployment rates fall, the benefits would also decrease.
Tax Issues, deadlines and notices
While there were rumors that the IRS might consider extending the tax filing deadline yet again, the IRS announced there will be no further extension. The current extended deadline of July 15, 2020 for 2019 tax returns is still in place. As long as taxpayers file tax returns and pay any taxes due by that date, no penalties and interest will be assessed. As a reminder, for those who make estimated tax payments, the first two quarterly installments for federal 2020 taxes are also due on July 15, 2020. For NYS and NJ your first estimate was due June 15th and your second estimate is due July 15th. For those small businesses located in NYC, your returns and first estimates were due April 15th and your second is due on July 15th. Normally, the first quarter payment for Federal, state and local taxes is due on April 15th and the second quarter payment is due on June 15th for.
Although the IRS was largely shut down for several months, the computers continued to generate notices for past due taxes. As the IRS began bringing people back, those notices went out in the mail, but it was not possible to change the due dates for tax payments. Consequently, many people received notices after the payment deadline had passed. However, those notices also come with an insert that clarifies that the payment due date on the notice is not binding. For amounts due between April 1 and July 15, taxpayers have until July 15, 2020 to make payment. Payments due before April 1 are due sooner, on July 10, 2020.
Taxpayers who did not file a 2016 tax return may be owed a refund, but that refund will disappear forever if no return is filed by July 15, 2020 (unless you filed a valid extension which would push the deadline to October), but please don’t wait. According to the IRS, an estimated 1.4 million people may be owed as much as $1.5 billion in refunds.
Economic Impact Payments (aka Stimulus Checks)
The IRS continues to add new updates to its FAQs on economic impact payments. The latest updates provide advice for people who think they may have received a duplicate payment, and explanation for a letter going out to people who received their payment via prepaid debit card, but who have not yet activated their card.
Paycheck Protection Program (PPP)
Good news if you didn’t get your PPP loan yet – a five-week extension of the program was signed into law last week. Applications for the remaining $130 billion left will be accepted through August 8.
The Prioritized Paycheck Protection Program (P4)
We are still following the progress on another bill that is under discussion the Prioritized Paycheck Protection Program. This may become available for those businesses showing a significant reduction in income for the “covered period”. We will keep you updated as “talks” progress. Here are some key points:
- It extends the application deadline for initial PPP loans from June 30 to December 30, or longer.
- Includes stricter eligibility requirements than the PPP.
- Includes carve-outs for the companies hardest hit by the pandemic.
- Disqualifies publicly traded companies from participating.
Follow this link to a great INC Article which details the proposed program.
Economic Injury Disaster Loans (EIDL)
Since June 15, the SBA’s EIDL loan and grant program has been accepting applications. Eligible small businesses with fewer than 500 employees can apply for an emergency grant of $1,000 per employee, up to $10,000. This is also available for freelancers, gig workers and the self-employed. Loans of up to $2 million are also available with interest rates of up to 3.75% for businesses and up to 2.75% for nonprofits. As of July 3, the SBA had approved more than $135 billion in loans and $16 billion in grants.
I also call your attention to a recent video blog I posted with information about the SBA loans associated with your EIDL application. Please click through and please remember this like the other programs out there may be a great resource for you, but there are specific guidelines for spending the funds.
HELP FOR SMALL BUSINESS
Main Street Lending Program
The Federal Reserve’s Main Street Lending Program is now underway, and additional FAQs were posted on June 26. Prospective borrowers should review the Boston Fed’s borrower page, and contact a participating lender.
WORKING FROM HOME
With more people working at home and relying on email for communication, ZDNet reports an increase in ransomware attacks using phishing as an entry point. Ensuring that security updates are regularly installed and that employees remain vigilant about suspicious emails will help keep networks and personal computers safe.
Campaigns to increase remote work in the past have not always been successful. IBM, Best Buy, Bank of America and Yahoo all pulled back on remote work initiatives during the last decade, citing losses in innovation and employee accountability. However, the COVID-19 pandemic changed all of that immediately. Now, thanks to better technology, including Zoom, companies are making plans to continue with remote work even after the pandemic eases. A key, according to one of the co-founders of the remote work initiative at Best Buy will be creating “a different kind of work culture, where everyone is 100 percent accountable and 100 percent autonomous. Just manage the work, not the people.”
Some companies are contemplating a split work schedule, with days in the office for collaboration and days at home for focused work. Recent surveys indicate that between 27% and 40% of employees would prefer to spend at least part of the work week at home.
LIVING WITH AND AFTER THE PANDEMIC
Going back to work
Returning to work and keeping everyone safe may seem an insurmountable challenge, but a report from an auto parts manufacturer in China shows that it can be done with only a few changes. Workers get two masks per day, temperatures are checked multiple times per day, and barriers in the onsite canteen keep people separated. To keep people apart, each person was assigned two workstations, but because demand for auto parts is down, that hasn’t hurt productions.
Many employees will need additional precautions to feel safe about returning to work. These include people who are at high risk for complications from COVID-19 or live with someone who is. Having a plan in place and allowing them to feel comfortable working from home while making sure they feel included in the team can help them keep working while staying safe.
Taking early retirement
Some older workers are considering not returning to work at all. Putting off retirement can result in a bigger social security benefit, but remaining in the workforce may pose health risks. Married couples don’t always retire at the same time, but that may be changing due to the risk of bringing the virus home. Deciding when to retire may mean a multi-step analysis of finances to see if the timing is right.
The meaning of work may have changed
The pandemic introduced two new categories of workers: essential and non-essential. For many of those whose jobs are not in the essential category, the pandemic has brought about a sort of existential crisis on the meaningfulness or lack of meaning of work. Workers who help keep people alive can find a clear purpose to their jobs, while others may feel compelled to re-evaluate their work. Some have found meaning by giving part of their income to those less fortunate or by volunteering in their communities.
- Payroll, HR and benefits company Gusto has put together An Employer’s Guide to Navigating the Coronavirus
- Accounting Today has a special page for articles on COVID-19
- The best source for up-to-date and accurate health information is the Center for Disease Control (CDC)
- The CDC also has recommendations for businesses and employers
- The Red Cross has pointers to help young adults stay safe
- Entrepreneur put together a listing of free tech resources for remote work
- Kiplinger has a state-by-state guide to absentee ballot voting.
- The Consumer Financial Protection Bureau has warnings about COVID-related scams
We sincerely hope that you and your family are well and remain well. If you have any questions or concerns, don’t hesitate to reach out to us. We are all in this together!