Author: Navaal Mahdi

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Paycheck Protection Program – Borrower Application Form

Paycheck Protection Program – Checklist of Documents Required 

MSATP’s Position on the Stay-At-Home Order

All persons living in the State of Maryland are ordered, effective as of 8:00 p.m. on March 30, 2020, to stay in their homes or places of residences (20-03-30-01).

Tax preparation, accounting, payroll, and bookkeeping are still essential businesses. However, it may be necessary for these businesses to provide a letter under company letterhead to each employee (if they are still working from the office) stating that they are employed with their company and must work from the office. If they have employee IDs or business cards, we recommend the employee has them as well. All of this information can be used as verification if the employee is stopped by the authorities to confirm they are under the essential Executive Order.

Concerning clients, the Executive Order that was announced on March 30, 2020 only states the following reasons for people to be on the road under section II (b):

• Supplies for self, family, household members, pets, or livestock; such as groceries, supplies for needs for the home, laundry
• Medical and prescriptions
• Caring for a family member in another household or location – groceries, medical, etc
• Traveling for picking up meals/carry out, free lunches, etc
• Exercise – walking, hiking, running or biking; but only in compliance of the CDC

Non-essential businesses must stay closed; however, business owners are permitted to do the following (under Section II (iii) 1) which is considered minimal operations:

• Checking on equipment which allows other staff to work from home (telework)
• Maintaining essential property (in other words, checking to make sure a pipe did not break, etc)
• Payroll or picking up mail
• If you have live animals in labs, feeding them

There is concern regarding whether clients can pick up their tax return, but we would advise against seeing any clients as the no gatherings rule is being enforced.

Again, this is MSATP’s opinion on the situation. To read the full Executive Order, click here.

IRS Unveils New People First Initiative | COVID-19 Effort Temporarily Adjusts, Suspends Key Compliance Programs (IR-2020-59)

To help people facing the challenges of COVID-19 issues, the IRS announced a sweeping series of steps to assist taxpayers by providing relief on a variety of issues ranging from easing payment guidelines to postponing compliance actions.

These new changes include issues ranging from postponing certain payments related to Installment Agreements and Offers in Compromise to collection and limiting certain enforcement actions. The IRS will be temporarily modifying the following activities as soon as possible; the projected start date will be April 1 and the effort will initially run through July 15. During this period, to the maximum extent possible, the IRS will avoid in-person contacts. However, the IRS will continue to take steps where necessary to protect all applicable statutes of limitations.

Read the highlights and FAQs on the issues here.

 

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Delaware & West Virginia Determine Updated Tax Filing Dates

In the last 48 hours, Delaware and West Virginia have made decisions on their respective tax filing dates. Click here for Delaware’s decision, and click here for West Virginia’s decision.

 

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State Tax Filing Guidance | AICPA

The AICPA has done an incredible job developing a chart that provides the latest developments on the state tax filings due to the coronavirus.

This link is updated daily, so we recommend that you bookmark the page. We want to commend the AICPA for the great job they are doing to keep everyone in the accounting and tax profession up-to-date on this unprecedented event.

Pennsylvania Extends Personal Income Tax Return Filing Deadline to July 15, 2020

The Department of Revenue today announced the deadline for taxpayers to file their 2019 Pennsylvania personal income tax returns is extended to July 15, 2020. This means taxpayers will have an additional 90 days to file from the original deadline of April 15.

The Department of Revenue will also waive penalties and interest on 2019 personal income tax payments through the new deadline of July 15, 2020. This extension applies to both final 2019 tax returns and payments, and estimated payments for the first and second quarters of 2020.

Read more about the extension here.

 

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Property Tax/Rent Rebate Program Application Deadline Extended to End of Year

In response to the COVID-19 outbreak, the deadline for older adults and Pennsylvania residents with disabilities to apply for rebates on rent and property taxes paid in 2019 has been extended from June 30 to Dec. 31, 2020, the Department of Revenue announced today.

Read more about the extension here.

 

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Filing and Payment Deadlines Questions and Answers | IRS

Q: I already filed my 2019 income tax return that would have been due on April 15 and scheduled a payment of taxes for April 15, 2020. Will this payment be automatically rescheduled to July 15, 2020?

A: No, the payment will not be automatically rescheduled to July 15. If you do nothing, the payment will be made on the date you chose. Here is information on how to cancel and reschedule your payment:

• If you scheduled a payment through IRS Direct Pay, you can use your confirmation number from the payment to access the Look Up a Payment feature. You can modify or cancel a scheduled payment until two business days before the payment date. The email notification you received when you scheduled the payment will contain the confirmation number.
• If you scheduled a payment through Electronic Federal Tax Payment System (EFTPS), click on Payments from the EFTPS home page, login, then click Cancel a Tax Payment from the left menu and follow the instructions. You must do so at least two business days before the scheduled payment date.
• If you scheduled a payment as part of filing your tax return (authorizing an electronic funds withdrawal), you may revoke (cancel) your payment by contacting the U.S. Treasury Financial Agent at 888-353-4537. You must call to make a payment cancellation request no later than 11:59 p.m. ET two business days prior to the scheduled payment date.
• If you scheduled a payment by credit card or debit card, contact the card processor to cancel the card payment

For more frequently asked questions about filing and payment deadlines, click here.

 

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Tax Preparers Deemed “Essential Service” Under Executive Order | Comptroller of Maryland

Comptroller Peter Franchot today clarifies that tax preparation services are considered an “essential service” and may remain open for business during the State of Maryland’s response to the COVID-19 pandemic.

Below is a statement from Comptroller Franchot:

“Tax preparation services fall under ‘financial services’ as outlined in the list of exempt businesses in Governor Hogan’s March 23rd executive order, and therefore should remain open as a critical infrastructure sector.

“Our agency regards tax preparers as a vital financial service that is available to taxpayers. Earlier this month, I announced extensions to deadlines for individual and corporate income tax filings and payments to July 15 and for business-related tax payments to June 1. However, taxpayers and businesses will still rely on professional tax preparers to help manage their finances during these challenging economic times. Preparers also help individuals who have yet to file their returns, but are counting on tax refunds to survive the economic downturn.

“Even with delayed due dates, continued assistance from these services to both individual and business taxpayers will help ensure that the tax filing and payment processes remain timely and accurate.”

Continue reading the press release here.

Closing All Non-Essential Businesses | Order of the Governor of the State of Maryland

Maryland Governor Larry Hogan announced today that he is ordering all non-essential businesses in the state to close. For information on which businesses are allowed to remain open, view the press release from the Governor’s office here. Accounting and Bookkeeping firms are allowed to remain open (See H).

 

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Keep Up-to-Date on Tax Issues | Wolters Kluwer IntelliConnect

Don’t waste time searching various resources for crucial news and information amid the COVID-19 tax changes.

CCH® IntelliConnect®, the Wolters Kluwer TaxAware Center, has all the state and federal tax news, information, and tools necessary for today’s tax professional in one, easy resource, and as an MSATP member, you get 24/7 access for FREE!

To register, visit your MSATP member portal at msatp.org. Once you’re logged in, go to member discounts, and then click “CCH TaxAware” for new, simplified directions on how to register. If you are not a member but would like to take advantage of this opportunity, join now or call us at 1-800-922-9672.

 

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COVID-19 Resources For Businesses

On March 12, Governor Hogan issued an executive order that requires the Maryland State Department of Assessments and Taxation (SDAT) extend all expiration and renewal dates to the 30th day after the date on which the state of emergency is terminated. SDAT is automatically extending the Annual Report Filing and/or Personal Property Return filing date from April 15 to July 15th for all entities, although it may take a few days for this to be reflected online. SDAT will soon provide additional information related to the delay of due dates for trade name renewals/expirations, penalty due dates, and any other related items.

For more information, click here.

IRS Will Move Tax Filing Deadline to July 15 as Coronavirus Spreads | CNBC

• The IRS will move the national income tax filing day ahead to July 15, three months after the normal deadline for Americans to send in their returns.
• The move announced by Treasury Secretary Steven Mnuchin is the latest in a series of highly unusual, emergency measures to deal with the financial fallout of the coronavirus pandemic.
• Mnuchin said the extension ordered by President Donald Trump will give “all taxpayers and business this additional time” to file returns and make tax payments “without interest or penalties.”

Read the full article here.

 

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President Trump Signs COVID-19 Relief Package

The President signed the Families First Coronavirus Response Act on Wednesday evening.

This bill is in response to the coronavirus outbreak by providing paid sick leave and free testing, expanding food assistance and unemployment benefits and requiring employers with 500 or fewer employees to provide additional benefits.

The tax relief comes in the form of a payroll tax credit for Social Security taxes paid on qualified paid sick or family leave wages. Some of the items addressed in the bill are:

• The refundable credit equals 100% of qualified paid sick or family leave wages paid each calendar quarter. The credit is allowed against the employer portion of Social Security taxes and applies to amounts paid to employees who are sick or quarantined.
• The credit applies to a maximum wage of $511 per day. For employees caring for a family member affected by COVID-19, the credit covers up to $200 a day.
• Comparable credits apply to self-employed taxpayers against the self-employment tax. The credit covers 100% of a self-employed individual’s sick-leave equivalent amount, or 67% of the individual’s sick-leave equivalent amount if they are taking care of a sick family member or taking care of a child following the child’s school closing. The sick-leave equivalent amount is the lesser of average daily self-employment income, or $511 per day, to care for the self-employed individual, or $200 per day to care for a sick family member or child following a school closing.
• These rules apply only to days occurring during the period beginning on a date selected by the Secretary of the Treasury, which is during the 15-day period beginning on March 18, 2020, and ending on Dec 31, 2020.

This credit will be available when filing 2020 taxes next year. This bill did not include payroll tax cuts or any other direct payments; however, upcoming relief bills may include this type of stimulus. For more information, click here.

 

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Fed Cuts Rates to Near Zero | AB Bernstein

The Fed took swift action Sunday evening, cutting its policy rate by a full percentage point to 0%–0.25%, pledging to purchase at least $700 billion in securities, and coordinating with other global central banks to maintain as much liquidity in the system as possible. The Fed is also working with banks to encourage lending.

How big of an action is this? It’s pretty close to the full extent of their policy tools. It shows how urgent they see this and how much they’re working to maintain stability and prevent the crisis from spilling into the financial sector.

What is their goal? The Fed knows they can’t fix the underlying issue of the demand shock associated with virus containment measures but are showing that they’ll do whatever they can to provide financial stability, giving Congress a chance to enact fiscal policies such as additional safety net spending and giving those policies the opportunity to work.

What happens next? The Fed can continue to do Quantitative Easing or take other alternative measures, but we’re wary of how well further monetary actions can address the issues here. In his press conference Sunday night, Fed Chairman Powell said this action will replace the meeting originally scheduled for this week. Importantly, he also said they do not see negative rates as an appropriate policy in the US.

Continue reading here.

 

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COVID-19: Business Resource Webpage | Maryland Department of Commerce

The Maryland Department of Commerce in conjunction with the Maryland Department of Labor, the Maryland Department of Assessments and Taxation, and several other state agencies launched a new webpage this week dedicated to business resources during the Coronavirus (COVID-19) outbreak.

The webpage, available on the Maryland Business Express portal, features several resources available for business throughout the state, including guidelines for employers, fair labor standards, information on insurance claims, opportunities for financial assistance, tax questions, and more.

To find resources or learn more about how to keep yourself, your families, and your workers safe, please visit businessexpress.maryland.gov/coronavirus.

 

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Effective in April – User Fees Increase for Offer in Compromise

The IRS has issued final regulations (T.D. 9894) that raise the user fee for offers in compromise from $186 to $205, effective for offers submitted after April 26, 2020. Offers based on doubt as to liability and offers from low-income taxpayers would continue to be exempt from a user fee.

 

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Five Ways Taxpayers Can Pay Their Taxes | IRS

Paying taxes is not optional – it’s the law. Taxpayers do have options when it comes to how they pay their taxes. The IRS offers several easy ways to pay taxes. Taxpayers can pay online, by phone or with their mobile device using the IRS2Go app, just to name a few.

Some taxpayers must make quarterly estimated tax payments throughout the year. This includes sole proprietors, partners, and S corporation shareholders who expect to owe $1,000 or more when they file. Individuals who participate in the gig economy might also have to make estimated payments.

Here are five options for taxpayers who need to pay their taxes. They can:

• Pay when they e-file using their bank account, at no charge, using electronic funds withdrawal.
• Use IRS Direct Pay which allows taxpayers to pay electronically directly from their checking or savings account for free. They can choose to receive email notifications about their payments when they pay this way. Taxpayers should watch out for email schemes. IRS Direct Pay sends emails only to users who request the service.
• Pay using a payment processor by credit card, debit card or digital wallet options. Taxpayers can make these payments online, by phone or through the IRS2Go app.
• Make a cash payment at more than 7,000 participating retail stores nationwide. To pay with cash, visit IRS.gov and follow the instructions.

Pay over time by applying for an online payment agreement. Once the IRS accepts an agreement, the taxpayers can make their payment in monthly installments.