Tax – COVID-19 Issues
Last Update 4/2/2020 at 2:53 pm
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. This Act also delays due dates for payroll taxes and makes other tax related rule revisions.
The CARES Act provides payments American individuals and families that meet certain financial criteria. The payments will be based upon 2018 taxes, or if they have already been filed, 2019 taxes.
If you are not required to file taxes because you are a senior citizen, a social security recipient, or a railroad retiree, the payments will be based on either Form SSA-1099 or Form RRB-1099 from the most recent tax year.
Payments will automatically be made within about 3 weeks. If you have filed a 2019 tax return, the payment will go to the bank account on file. If you have not yet filed a 2019 tax return, the check will be deposited to the bank account on your 2018 tax return.
For more information about Economic Impact Payments, visit the IRS website on the topic.
If you would like to estimate the payment amount you will receive, there are many agencies that have created a payment calculator based on filing status, adjusted gross income, and number of children in your household.
- Income tax filings and payments have been extended until July 15, 2020 regardless of how much money is due. This is automatic, and no paperwork needs to be filled.
- Applies to all individual returns, including self-employed individuals, and all entities other than C-Corporations (like trusts and estates).
- This relief also includes estimated tax payments for tax year 2020 that are due on April 15, 2020.
- Additional extensions are still available.
- Individual taxpayers can still request an additional extension beyond July 15, 2020, by filing an Application for Automatic Extension of Time Form 4868.
- Business taxpayers can also request an additional extension beyond July 15, 2020, by filing an Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns Form 7004.
On Friday, March 20, 2020, the U.S. Treasury Department, the Internal Revenue Service, and the U.S. Department of Labor announced that small and mid-sized employers can take advantage of two new refundable payroll tax credits to fully reimburse them for the cost of Corona-virus related leave provided by the Families First Coronavirus Response Act. This relief includes:
- Paid sick leave for workers for COVID-19 related reasons, including 80 hours paid sick leave and expanded child care leave when employees’ children’s schools are closed or child care providers are unavailable.
- Employers receive 100% reimbursement for paid leave pursuant to the Act.
- Health insurance costs also included in this credit
- No tax liability for employers
- Self-employed individuals also receive credit
- Fast Funds will be quick and easy to obtain
- Immediate dollar-for-dollar tax offset against payroll taxes will be provided
- Where a refund is owed, the IRS will send the refund as quickly as possible
- Some exemptions for businesses with under 50 employees
- The California Franchise Tax Board has postponed the filing and payment deadlines until July 15, 2020 for individuals and business entities for
- 2019 tax returns
- 2019 tax return payments
- 2020 1st & 2nd quarter estimate payments
- 2020 LCC taxes and fees
- 2020 Non-wage withholding payment
- Property Taxes are still due by April 10, 2020. Online payment is available.
- All five San Diego County Tax Collector’s Offices are closed to the public as of Thursday, March 19, 2020.