PCO Bookkeepers Coronavirus Update: March 20 Tax Changes

March 4, 2020
Posted by: admin
Category: Accounting Advice

Coronavirus Update | FEDERAL INCOME TAX UPDATE

As you know the Coronavirus situation is fast moving and fluid situation. The email up date we sent out a short time ago included a paragraph:

The deferred payment rule does not extend the filing date of the income tax return past April 15, 2020. Affected taxpayers should request extensions of time to file their income tax returns under the normal rules.

Within the past hour the federal government has relaxed the filing due date. At this point not only is your tax payment due date been extended to July 15th, but now federal tax filing has also been extended to July 15th.

How to keep your pest control company solvent during the coronavirus pandemic

Tired of those emails telling you how everyone you’ve ever had contact with is dealing with coronavirus? Here is what you need to know to keep your company solvent! We work with our over 300 pest control and lawn care clients, and we’ve spoken to many of them in the last few days. We’re hearing our industry is faring better than many others. Most customers are accepting service, with many doing outside service only.

At this point most of us consider pest control an essential service, and there isn’t much push back by local authorities. NPMA and NALP have been working hard to make sure both state and federal governments recognize this. Our lawn care clients report that many people are staying home, so there are many homeowners to speak to, making new sales very strong.

That said, if the current situation persists, things can and will change. It could be an ugly spring. The need for a sound financial strategy has never been greater. Rewriting budgets at this point with a few different “what if” scenarios is prudent. We are here to help. In general, we don’t think it’s time to hold onto original plans for the year. It’s clear that the virus will change most every company’s plans. It’s no time to be a cowboy – that time will come later. Our recommendation is to work on liquidity and cost control. Companies who focus on these two things will fare better. Those that don’t will be in a world of hurt.

Here’s a look at what’s going on out there and what’s available to our clients and friends in the industry:

Extension of Tax Payment

The IRS will allow taxpayers to defer payments for 2019 tax returns until July 15, subject to certain caps. For individuals, the amount of tax that can be deferred is up to $1 million. Corporations can defer up to $10 million. These limits were selected to provide benefits to small businesses that report income through pass-through entities such as partnerships or S corporations. Taxpayers are eligible for the deferral of federal income tax payments due on April 15, 2020,until July 15, 2020, without imposition of penalty or interest. The IRS clarifies that estimated tax payments due on April 15 are covered under this deferred payment rule. However, the second estimated tax payment due on June 15 is not covered, unless the treasury department changes its position.

H.R. 6201 –Families First Coronavirus Response Act – Signed into law 3-18-20

Unemployment benefits

Signed into law March 18, the act expands unemployment benefits through larger federal grants to the states to process and pay claims.

Health care

It also has several health care provisions. These include providing COVID-19 testing at no cost to the insured. This includes diagnostic testing, visits to a provider, urgent care center or emergency room.There is also a waiver of Medicare, Medicare Advantage, Medicaid and CHIP cost-sharing. In conjunction with previously issued IRS guidance, a participant in a high deductible health plan receiving this benefit would still be eligible to contribute to a Health Savings Account on a tax-advantaged basis.

Paid sick leave

This bill includes a requirement that employers with 500 or fewer employees and government employers provide emergency paid sick leave to employees due to any of the following reasons

1. To quarantine because the employee is diagnosed with coronavirus;

2. To seek a diagnosis or preventive care for coronavirus;
3. To comply with a recommendation or order by a public official with jurisdiction or health care provider on the basis that the physical presence of the employee would jeopardize the health of others due to exposure of the employee to coronavirus or exhibition of symptoms by the employee; or
4. To care for a family member for such purposes or to care for a child whose school has closed or childcare provider is unavailable due to the coronavirus.

Full-time employees are entitled to 10 days of sick leave and part-time employees are entitled to the typical number of hours that they work in a typical two-week period, paid at two-thirds of the employee’s regular rate.

The sick leave amount is calculated based on the employee’s “required compensation” (i.e., the largest of regular rate of pay, federal minimum wage,or local minimum wage) multiplied by the number of hours normally scheduled to work, but capped at $511 per day ($5,110 in total) and $200 per day ($2,000 in total) for other employees.

Medical leave

Employers with 500 or fewer employees and government employers must provide up to 12 weeks of job-protected emergency family and medical leave for a “qualifying need related to a public health emergency.”

Paid leave is calculated for an employee at an amount not less than 2/3 of the employee’s regular rate of pay (using the Fair Labor Standards Act of 1938) multiplied by the number of hours the employee would normally be scheduled to work. Under a Technical Corrections Act clarification, this amount of required paid leave cannot exceed $200 per day and $10,000 in total for an employee.

The law funds the paid sick leave and paid family and medical leave for employers (including tax-exempt employers) through a refundable credit against payroll taxes. Self-employed taxpayers can receive a benefit through a refundable credit against income taxes for periods during which work cannot be done.

We Are Here To Help!

We write at this time to let you know our firm remains open and fully operational for business, and we are available to support you in any way we can. While our staff is working from home, this is nothing new to the way we work, normally our entire model has us working in the cloud and from remote locations – nothing changes.

NPMA COVID-19 Webinar & Website

In an effort to share the latest policy news, human resources considerations and regulations to watch for, communications resources and basic info on licensing for sanitation/disinfecting, NPMA will be hosting a webinar on Friday, March 20, 11am – 12:15pm EST. Also, NPMA set up a special website for COVID-19 updates and resources. Details here

PMP – How PMPs handle coronavirus/COVID-19 concerns

How should those in the pest control industry proceed? Read more..

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