october 28, 2020
october 22, 2020
October 19, 2020
- Hope for Companies Where COVID-19-Related Business Interruption Claims Have Been Denied Without Investigation
october 15, 2020
october 12, 2020
october 8, 2020
october 5, 2020
september 22, 2020
- California Employers Now Subject to Additional COVID-19-Related Laws Related to Cal/OSHA Reporting and Worker’s Compensation
september 21, 2020
September 11, 2020
- COVID-19-Related Paid Sick Leave Has Been Expanded in California Yet Again to All Employers with 500+ Employees
august 4, 2020
july 6, 2020
july 1, 2020
- PPP Loan Deadline May Be Extended as SBA Issues New Rules Relating to Loan Forgiveness and Eligibility
- California Looks to Pass Legislation Concerning Business Interruption Coverage Due to COVID-19
June 29, 2020
June 22, 2020
- PPP Loan Forgiveness Application Forms Updated and Streamlined
- Nevada Division of Insurance to Disallow Policy Exclusions Related to COVID-19
- CDI Announces New Order Regarding Workers’ Compensation Premium Savings for CA Businesses Affected by COVID-19
june 15, 2020
june 10, 2020
- Note to the SBA: Debtors in Bankruptcy Are Eligible for PPP Loans
- California Modifies the Tolling of Statutes of Limitations in Civil Cases
june 8, 2020
June 4, 2020
may 29, 2020
may 28, 2020
- House Introduces Pandemic Risk Insurance Act of 2020 in the Wake of COVID-19 Business Interruption Claims
may 27, 2020
- Hoteliers Beware: a Return to Business Post-Pandemic Brings With It Potential Legal Liability
- House Contemplates Revisions to the Paycheck Protection Program
may 15, 2020
may 14, 2020
- U.S. House Democrats Introduce HEROES Act, a New $3T Stimulus Package
- SAFE Banking Act for Cannabis-Related Businesses Included in the HEROES Act
may 12, 2020
may 8, 2020
- Treasury and the SBA Issue Guidance Regarding the Employee Retention Credit
- Businesses Reopen in Los Angeles County as Stage 2 of California’s Statewide Plan Begins
- Update: Large Employers Required to Pay Coronavirus-Related Sick Leave Under New L.A. County Ordinance
may 6, 2020
- SBA Extends PPP Certification Safe Harbor to May 14
- EPLI Insurance and Employee Benefits in the Age of the Coronavirus
may 5, 2020
- Update: PPP Guidance Issued by the SBA and U.S. Treasury at Odds With the CARES Act—Michelman & Robinson Files First-of-Its-Kind Lawsuit Challenging FAQs
- NAIC Issues Business Interruption Data Call in the Wake of COVID-19
may 4, 2020
- PPP Guidance Issued by the SBA and U.S. Treasury at Odds With the CARES Act—Michelman & Robinson Files First-of-Its-Kind Lawsuit Challenging FAQs
may 1, 2020
april 29, 2020
- Planning for Your Employees' Return to the Workplace
- Los Angeles Hospitality Workers Among Those Thrown a Potential Lifeline
april 24, 2020
- Attention Cannabis Businesses: Hope May Be on the Horizon for Federal COVID-19-Related Relief
- California Department of Insurance Issues Notice Granting Tax-Filing Extension in Response to COVID-19
- SEC Approves Amendments to Nasdaq and NYSE Continued Listing Requirements Due to the COVID-19 Pandemic
April 23, 2020
april 21, 2020
- Additional Funding Is on the Way to Resurrect the PPP
- Certifying Your PPP Loan: Proceed With Caution
april 17, 2020
april 16, 2020
- Employment in the Wake of Coronavirus: EEOC and OSHA Guidance Allows Employers to Go Where They Could Not Go Before
- New Yorkers Ordered to Stay at Home Even Longer Amid the COVID-19 Crisis
- Paycheck Protection Program Funds Exhausted
april 15, 2020
- Attention Insurers: the CDI Has Ordered You to Fairly Investigate All Business Interruption Insurance Claims Caused By the COVID-19 Outbreak
April 14, 2020
- Insurance Companies Have Been Ordered to Provide COVID-19-Related Premium Relief to Businesses and Drivers in California
- What to Do If Your New York Business Has Been Deemed Non-Essential
APRIL 13, 2020
- IP Deadlines and Fees Extended Under the CARES Act
- Employment in the Wake of Coronavirus: Reintegrating Your Workforce in the New Normal
APRIL 10, 2020
- You Successfully Applied for and Received a PPP Loan Under the CARES Act: Now What?
- Safer at Home Order in L.A. Extended to May 15
- Maintaining Your Trade Secrets During the Coronavirus Crisis
APRIL 9, 2020
april 8, 2020
- Congress Looks to Bolster the PPP With Another $250B in Funding
- U.S. Treasury Provides Further Guidance to PPP Borrowers and Lenders
- L.A. Mayor Amends COVID-19-Related Paid Sick Leave Ordinance
april 7, 2020
- Clarifying the Paycheck Protection Program: Payment of Insurance Premiums and Loan Forgiveness under the CARES Act
April 3, 2020
april 2, 2020
april 1, 2020
March 31, 2020
march 30, 2020
- Large Employers Required to Pay Coronavirus-Related Sick Leave Under New L.A. Ordinance
- Insurance Coverage Potentially Triggered by COVID-19
- Attention Insurers: CDI Orders Mandatory Call for Business Interruption Coverage Information in the Wake of COVID-19
- DOL Is Requiring Employers to Post Families First Employee Rights Notice
March 27, 2020
- A Comprehensive Guide to Understanding Coronavirus-Related State Assistance Programs: Who is Giving What to Whom (Part II)
- HHS Relaxing Enforcement of HIPAA to Facilitate Sharing of Information During the COVID-19 Crisis
March 26, 2020
march 25, 2020
march 24, 2020
- Navigating the Coronavirus Pandemic: a Critical Business Review Checklist
- SBA Loans for Companies Impacted by Coronavirus
- SEC Relaxes Federal Proxy Rules for Annual Meetings
march 23, 2020
- Federal Reserve Responds Boldly to Coronavirus-Related Economic Downturn
- The Number of Jurisdictions Implementing Stay-at-Home Orders Is Increasing Exponentially
- Michelman & Robinson’s Guide to Coronavirus-Related Paid Sick Leave and Unemployment Insurance Laws in the Tri-State Area
MARCH 21, 2020
MARCH 20, 2020
- New York Governor’s PAUSE Order
- Illinois Governor’s Statewide Stay-at-Home Order
- Force Majeure Clauses in Commercial Real Estate Contracts
MARCH 19, 2020
- SEC Provides Regulatory Relief for Public Reporting Companies
- Student Loan Borrowers Can Breathe a Sigh of Relief, At Least Temporarily
- California Governor's Statewide Stay-At-Home Order
MARCH 18, 2020
- "Shelter in Place" Orders
- Telecommuting in the Age of Coronavirus
- Families First Coronavirus Response Act Just Passed by the Senate and Signed Into Law by the President
MARCH 17, 2020
- M&R Coronavirus Risk Mitigation Team: A Multi-Disciplinary Legal Team Ready To Immediately Address A Host Of Coronavirus-Related Issues for Businesses, Quickly And Holistically
MARCH 16, 2020
MARCH 5, 2020
Tax Implications of the CARES Act at a Glance
APRIL 2, 2020
As Michelman & Robinson has reported, the Internal Revenue Service has extended federal tax filing and payment deadlines to July 15, 2020 in response to the coronavirus crisis. Of note, there is no limitation on the amount of tax payments that can be deferred to July, which is a change from early accounts of a $1M limit. Also, federal gift tax and generation skipping transfer tax payments have been similarly (and automatically) postponed to July 15.
For their part, some states have followed suit and extended certain tax obligations too. For instance, the filing deadline for individual, estate, trust, and corporation returns in New York is now July 15, and the time to file sales and use taxes, originally due on March 20, has been advanced 60 days.
While certainly significant, these are not the only tax implications of the COVID-19 pandemic. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, the $2T emergency aid package signed into law on March 27, includes its share of tax benefits as well. M&R provides an overview here.
CORPORATE TAX BREAKS
Employee Retention Tax Credit
Under the CARES Act, employers may be able to receive a refundable tax credit for their share of the 6.2% social security tax. This tax credit would be for 50% of the first $10,000 in qualified wages paid to each employee after March 13 and through December 31, 2020, which qualified wages are subject to limitations and include employee health plan expenses.
To be eligible, an employer must have had its operations entirely or partially interrupted pursuant to a coronavirus-related government order. Likewise, an eligible employer must have realized more than a 50% decline in gross receipts in a calendar quarter when compared to the same quarter in 2019.
It should be mentioned that non-profits also qualify for this tax credit, though it does not apply to wages paid to federal, state, or local government employees. Additionally, businesses can opt out of this provision, and employers that receive Paycheck Protection Program (PPP) loans pursuant to the CARES Act are not eligible.
Delay of Payment of Payroll Taxes
The CARES Act allows eligible employers to defer the payment of applicable employment taxes (read: the 6.2% social security tax on wages paid from March 27 to December 31, 2020). In effect, this lets certain employers (as well as self-employed taxpayers) hold onto some payroll tax money for a time—50% of the deferred taxes are due on December 31, 2021, and the remaining amount must be paid by December 31, 2022. Businesses that receive PPP loan forgiveness as authorized by the CARES Act are not eligible for the deferment.
Net Operating Loss Rule Changes
Pursuant to the CARES Act, taxpayers are allowed to carry back net operating losses arising in taxable years ending after December 31, 2017 and before January 1, 2021 for five years. Moreover, they can offset 100% of taxable income with net operating loss carry backs and carry overs beginning prior to January 1, 2021 (this repeals the old 80% offset rule).
Business Interest Expense Modification
The CARES Act lets businesses deduct business interest up to 50% of their adjusted taxable income for the 2019 and 2020 tax years, which is up from 30% in prior years. Toward that end, taxpayers can elect to apply their 2019 ATI in place of their 2020 ATI, if doing so would serve to increase their business interest expense for 2020.
Charitable Contributions Modification
By way of the CARES Act, the aggregate of any qualified corporate charitable contributions for tax year 2020 can be up to 25% of the taxpayer’s taxable income, which is up from 10% of income under prior rules.
Alternative Minimum Tax Credits
Before enactment of the CARES Act, corporations could claim alternative minimum tax credits over a span of several years, ending in 2021. Now, however, the law has been changed so that corporate taxpayers can recover AMT credits on an accelerated basis. They can do so by amending 2018 and (if already filed) 2019 returns.
Fixes to the Tax Cuts and Jobs Act of 2017
The TCJA did not designate Qualified Improvement Property (QIP) as 15-year Modified Accelerated Cost Recovery Systems (MACRS) property. The CARES Act does so, and, among other things, specifies that QIP has a 20-year life when an Alternative Depreciation System (ADS) is elected or required.
INDIVIDUAL TAX BENEFITS
Excess Business Loss Limitation Adjustment
According to the CARES Act, the excess business loss limitation rules are no longer applicable for the 2018, 2019, and 2020 tax years, though they will go back into effect for any tax year beginning January 1, 2021 through December 31, 2025.
The CARES Act provides for direct cash payments to individuals as follows:
A total of $1,200 per qualifying individual ($2,400 for married couples filing jointly) plus an additional $500 for each qualifying child (e.g., a son, daughter, stepchild, adopted child, foster child under the age of 17 by the end of 2020).
Most American taxpayers will receive a recovery rebate, so long as they are a U.S. resident, not listed as a dependent on someone else’s return, and have valid social security numbers.
To qualify for a full recovery rebate, singles must have an adjusted gross income under $75,000 (the rebate is phased out when AGI is between $75,000 and $99,000). Married couples filing jointly must have an AGI under $150,000 (the rebate is phased out when AGI is between $150,000 and $198,000).
Individual taxpayers should be aware that these AGI figures are based on 2019 returns, if filed; otherwise, 2018 returns will form the basis for the recovery rebates (which are supposed to be available by direct deposit within the next three weeks, and are basically an advance payment of a 2020 tax credit).
IRA and Retirement Plan Changes
The CARES Act suspends required minimum IRA distributions for 2020. Further, there will not be a 10% penalty for early retirement plan distributions of up to $100,000 that are coronavirus-related (e.g., account holder or spouse is diagnosed with COVID-19; has experienced adverse financial consequences as a result of being quarantined, furloughed, or laid off as a result of the coronavirus; is otherwise unable to work due to lack of child care because of COVID-19; or whose employer has closed or reduced employee hours by virtue of the pandemic).
Regarding such early distributions, they can be taxed over a three-year period, or the taxpayer can elect to pay all of the taxes due at once.
There is more. The limit for COVID-19-related loans from qualified retirement plans has been increased to $100,000.
Charitable Contributions Modification
The CARES Act allows for a new $300 “above-the-line” deduction for non-itemizers making cash donations. These changes exclude contributions to private foundations, supporting organizations, and donor-advised funds.
We are working diligently to keep our clients up to date on coronavirus-related developments. Nevertheless, these developments are changing daily and, in some cases even hourly, so it is important that you make sure you are dealing with the most current information. That being said, this alert is not offered, and should not be relied on, as legal advice. You should consult an attorney for guidance and counsel regarding any specific concern or situation.