Timothy D. Powers, PLC

Pie Graph Image

Covid-19 Tax Updates

Covid-19 Recent Legislative Changes

Extension of Time to File and Pay:
The IRS has extended the April 15th filing and income tax payment deadline to July 15th.  All returns (Individual, Partnership, Corporate, Trust, Estate) that have a due date of April 15th automatically qualify for the extension without taking any action.  Likewise the State of Michigan has granted the same extension of time for income tax returns due April 15th.

Stimulus Payments:
Single – You will receive $1,200 (plus $500 per dependent child under the age of 17).  The credit will be reduced if income is over $75,000 and eliminated if income is over $99,000.
Married – You will receive $2,400 (plus $500 per dependent child under the age of 17).  The credit will be reduced if income is over $150,000 and eliminated if income is over $198,000.
Head of Household  – You will receive $1,200 (plus $500 per dependent child under the age of 17).  The credit will be reduced if income is over $112,500.

If you were claimed as a dependent you will not receive a payment.

If the IRS has your banking information from your 2019 or 2018 tax returns they will direct deposit the stimulus money starting in about 3 weeks from March 27th.  If they do NOT have your banking information they will mail the stimulus checks to your last known address.  This could take closer to 3 months to receive.

The IRS has developed two new tools to help individuals receive their stimulus payments:

The non-filers tool allows individuals who were not required to file tax returns to provide their personal information so they will receive their $1,200.  People who receive social security do NOT have to complete this form.  The IRS already has their information and they will automatically get the stimulus payments.

The Get MY Payment tool will allow people to check the status of their stimulus payment, confirm if its direct deposit or check and input banking information if the IRS does not already have it.

Link to IRS tools site

Unemployment Benefits:
The new CARES bill also includes help for those receiving unemployment benefits.  Currently the maximum unemployment benefit in Michigan is $362.  Many unemployed workers will qualify for up to an additional $600 of weekly benefits.  Based on past federal extensions the additional amount may be paid without additional action.

Part-time workers who do not have enough income to qualify for unemployment benefits would qualify for these benefits.

Self-employed, Contractors, 1099 employees will also qualify for the new unemployment benefits.

Already exhausted your benefits?  You should refile to claim the federal extension amount.

Website to apply for unemployment benefits can be found at  https://www.michigan.gov/leo/0,5863,7-336-78421_97241---,00.html

 

Business Stimulus Programs

CARES act stimulus benefits for businesses:

The federal CARES act also is providing $349 billion in funding to the SBA to provide loans to small companies, sole proprietors, self-employed, etc. under the Paycheck Protection Program (PPP).  The loan amount is tied to payroll costs of the business.  Proceeds from the loan can be used to pay for payroll, medical insurance premiums, mortgages, rent and utilities.  Qualifying for these loans should be quicker than traditional SBA loans as the CARES act has left it up to the local lenders to determine eligibility, credit worthiness and repayment ability. The best part of these new loans is that they can be forgiven if you retain your employees.  The application process is still being developed but start developing a relationship with an SBA loan provider now.  PNC Bank is an SBA lender.  Click on link to go to a website setup by PNC relating to the Paycheck Protection Program  https://www.pnc.com/en/customer-service/paycheck-protection-program.html

They are still developing how the program works.  

The following link takes you to a website showing a comparison between the two programs (EIDL and PPP) https://plumdirectmarketing.com/blog/understanding-the-economic-injury-disaster-loan-eidl-vs-the-paycheck-protection-program-ppp/