Coronavirus Tax Updates

Coronavirus Tax Updates

What To Know About Coronoavirus and Tax Updates

We know that these are challenging times and that there has been a lot of news out there regarding the coronavirus (COVID-19). Not to worry though, Toro Taxes has your back with daily updated news and facts about any changes in tax filing deadlines or tax updates in general, with tools and resources to give you peace of mind.

The automatic extension due date is now July 15 because of the Coronavirus (COVID-19).

  • Taxpayers who are due a refund have 3 years from July 15 to file a return.
  • Taxpayers who owe the IRS do not need to file an extension to qualify for the new deadline
  • The failure-to-fail penalty is suspended until July 15.
  • The failure-to-pay penalty is suspended until July 15.
  • Estimated tax payments for the first quarter are deferred until July 15.
  • Taxpayers can pay their tax owed online at IRS.gov/payments or by mailing a check.

The application to file an extension is can be found through the Form 4868.

  • Use this form if your client needs more than 90 days to file. The file due date is October 15.
  • The software fee for the form is $25. Preparers may decide to offer to file an extension for free.
  • The taxpayer can sign electronically. (Phone number and carrier service required.)

The taxpayers who the preparer has not started a tax return for can use the TAX PASS app.

  • Contact the corporate office to get QR codes, login credentials, and to confirm the site’s app has been set up with the correct information.

Read below for the following official notices:

  • Areas, regions, or specific situations where the federal government acknowledges a significant outbreak. (declared disaster or emergency)
    • March 11, 2020, the president ordered the Treasury and the IRS to announce an extended due date. A date was not specified.
      • “... defer tax payments without interest or penalties for certain individuals and businesses negatively impacted.”
    • March 13, 2020, the president declared a state of emergency.
    • March 17, 2020, the treasury secretary stated that tax and penalties are being deferred by 90 days.
    • March 18, 2020, the IRS and Treasury released a notice explaining the details for the extended due date to pay income taxes.
      • The deadline to pay income tax and self-employment tax is July 15.
      • The estimated tax payments due on April 15 are deferred until July 15.
      • All taxpayers that owe tax by April 15 are termed “Affected Taxpayers.”
    • March 20, 2020, IRS releases notice expanding deadlines.
      • The deadline to file tax returns is extended to July 15.
      • Business returns that were due March 16 have an extended due date of July 15.
      • The limit on the amount of tax that can be deferred has been removed. All federal income tax, self-employment tax, and estimated payments originally due on April 15 are deferred.
      • The IRS has temporarily closed all Taxpayer Assistance Centers.
  • Current relief options include plans to expand or offer Interest-free Loans, Temporary Unemployment, advance payments for Credits, creating New Credits, Accelerated Deductions, and suspensions or Cuts to Payroll Taxes.
    • March 19, 2020, signed into law the Emergency Paid Sick Leave Act.
      • It begins no later than 15 days from March 19 (April 3). Expires December 31, 2020.
      • For private businesses with fewer than 500 employees or public agencies with 1 or more employees.
    • 2 weeks paid leave for those who must or is caring for someone who must quarantine.
      • Those who are caring for others receive ⅔ pay. Limit $200/day, $2,000 total.
      • Those who must quarantine receive regular pay. Limit $511/day, $5,110 total.
    • Additional 10 weeks paid leave to workers caring for children whose school or daycare closed. Receive ⅔ pay. Limited to $200 per day with a total of $10,000
      • For businesses with 50 or more employees.
      • Those quarantined without children are not eligible for the additional paid leave.
      • Health-care providers and emergency workers may be exempted by their employer
    • Refundable payroll credit for qualified and required paid sick leave equal to 100% of the amounts paid.
      • Applies to income taxes and self-employment taxes.
      • The credit includes allocated costs of the employees’ qualified health plans made during the leave.
      • The IRS is to issue instructions on how to apply for the credit.
  • Most states will adhere to the federal due dates.

Do not confuse the Coronavirus with other declared disasters!

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