We are aware of the uncertainty that is swirling amid the recent COVID-19 outbreak, especially for small businesses and individuals.  We are doing our best to stay up to date on the ever changing legislation and relief aid that could affect you and your businesses.   We will try to keep our website updated with the latest news and resources, but if you have questions specific to you or your business please reach out to our office for further assistance in navigating through these unusual times.

 

April 15 Federal Tax Payments Extension

Recent Treasury and State of Iowa decisions allow you to defer the filing and payment of your 2019 taxes.  Federal returns now have a filing and payment due date of July 15, 2020.  First quarter federal estimate payments can also be deferred until July 15th.  As of March 20, 2020 second quarter federal estimates are still due June 15th.

Iowa returns and payments with a due date on or after March 19, 2020 and before July 31, 2020 can be deferred until July 31, 2020 without penalty or interest.  The Iowa extension does not apply to estimated tax payments.

If you choose to defer your federal or Iowa tax payments until the revised due dates please take steps to ensure that your payments are made on or before the applicable dates. 

The due dates are ever changing and we will keep you updated as the Treasury Department and Iowa Department of Revenue release guidance.

 

Families First Coronavirus Response Act Passed

On Wednesday, March 18, President Trump signed the Families First Coronavirus Response Act into Law.   The act provides relief for many families including expanding paid sick leave for certain employees, free coronavirus testing, expanding food and unemployment assistance benefits and providing protection for health care workers.

Below are definitions provided by the DOL outlining covered employers, eligible employees and what employees can receive (other FAQ can be found at https://www.dol.gov/agencies/whd/pandemic/ffcra-questions):

General Information Regarding Leave and Amount

Covered Employers: The expanded family and medical leave provisions of the FFCRA apply to certain public employers and private employers with fewer than 500 employees.

IR 2020-57 has been issued to say that small businesses with fewer than 50 employees will be eligible for an exemption for federally mandated child care leave if those requirements would be a going concern for the business.

Eligible Employees: All employees of covered employers are eligible for two weeks of paid sick time for specified reasons related to COVID-19. Employees employed for at least 30 days are eligible for up to an additional 10 weeks of paid family leave to care for a child under certain circumstances related to COVID-19. Special rules apply for healthcare providers and emergency responders.

Generally, the Act provides that employees of covered employers are eligible for:

  • Two weeks (up to 80 hours) of expanded family and medical leave time at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or
  • Two weeks (up to 80 hours) of expanded family and medical leave time at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State, or local government order or advice of a health care provider), or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor; and
  • Up to an additional 10 weeks of expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.

Where leave is foreseeable, an employee should provide notice of leave to the employer as is practicable. After the first workday of expanded family and medical leave, an employer may require employees to follow reasonable notice procedures in order to continue receiving expanded family and medical leave.

Specific Information Regarding Leave

Qualifying Reasons for Leave:

Under the FFCRA, an employee qualifies for expanded family and medical leave if the employee is unable to work (or unable to telework) due to a need for leave because the employee:

  1. is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
  2. has been advised by a health care provider to self-quarantine related to COVID-19;
  3. is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
  4. is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
  5. is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or
  6. is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

Under the FFCRA, an employee qualifies for expanded family leave if the employee is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19.

Duration of Leave:

  • For reasons (1)-(4) and (6):A full-time employee is eligible for 80 hours of leave, and a part-time employee is eligible for the number of hours of leave that the employee works on average over a two-week period.
  • For reason (5):A full-time employee is eligible for up to 12 weeks of leave (two weeks of paid sick leave followed by up to 10 weeks of paid expanded family & medical leave) at 40 hours a week, and a part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period.

Calculation of Pay:

  • For leave reasons (1), (2), or (3): employees taking leave are entitled to pay at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a 2-week period).
  • For leave reasons (4) or (6):employees taking leave are entitled to pay at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 in the aggregate (over a 2-week period).
  • For leave reason (5):employees taking leave are entitled to pay at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 in the aggregate (over a 12-week period). An employee may elect to substitute any accrued vacation leave, personal leave, or medical or sick leave for the first two weeks of partial paid leave under this section.

Paid sick time provided under this Act does not carryover from one year to the next. Employees are not entitled to reimbursement for unused leave upon termination, resignation, retirement, or other separation from employment.

Employers who pay mandated federal paid sick or child care leave can reduce their federal payroll tax deposits by the cost incurred.  This also includes the costs of continuing health care coverage during federally mandated leave periods.  Employers will be able to deduct the cost of providing leave from their total federal tax deposit amount from all employees. If the paid leave is more than the federal tax deposits employers will be able to request a refund of the costs.

Self-employed individuals can reduce their estimated payments by the paid leave or claim a refund on their 2020 income tax returns.

 

Resources for Small Business Relief Aid

As the COVID-19 pandemic continues we are aware of the large impact it is having on small businesses and their owners and we want you to know we are here to help.  We are doing our best to stay up to date on the ever changing legislation and relief aid that could affect you and your businesses.  Below is a list of Iowa resources available to small businesses, employers, and sole proprietors.

For Individuals:

  • Iowa Workforce Development – Unemployment Compensation for individuals https://www.iowaworkforcedevelopment.gov/COVID-19
    • Coverage has been expanded for employees that are unable to work due to Coronavirus. See the link for eligibility information.

For Businesses:

  • Iowa Economic Development – Small Business Relief Program  https://www.iowaeconomicdevelopment.com/reliefgrants
    • Grants are available to assist small Iowa businesses in maintaining or reopening business operations impacted by Coronavirus. Businesses may also apply for deferrals of sales and use or withholding tax. Application deadline is March 31st.
  • Iowa Economic Development – Targeted Small Business Sole Operator Fund https://www.iowaeconomicdevelopment.com/programDetails?pid=137&ppid=26
    • Grants are available for Iowa businesses with zero employees that have been impacted by the Coronavirus pandemic. You must qualify in the Targeted Small Business program, which is designed to help women, individuals with minority status, service-connected disabled veterans and individuals with disabilities to overcome some of the hurdles to start or grow a small business in Iowa. Sole proprietors may also apply for deferrals of sales and use or withholding tax. Application deadline is April 10, 2020.
  • US Small Business Administration – Small Business Loans https://disasterloan.sba.gov/
    • Low interest rate loans are available for businesses through an application process.