General Info

COVID-19 Individual and Small Business Client Quick Reference

Below is a summary of certain federal and state COVID-19 relief provisions. The current legislative and tax environment is very fluid, and we are updating these provisions as they become law and codified into regulation.

Contact your AKA accountant if you need clarification or assistance with qualifying benefits.

FEDERAL

Income Tax Filing Deadlines:

  • Automatic extension of filing deadline to July 15, 2020 – all calendar year taxpayers
  • Deferral of federal income tax balances due to July 15, 2020 regardless of amount – all calendar year taxpayers
    • Also defers payment of 1st quarter estimated income taxes for 2020
    • 2nd quarter payments are still due June 15, 2020
  • Gift tax returns are due 4/15/20.  If you need an extension, form 8892 has to be filed.
  • Additional extension of time can be requested by July 15

Emergency Paid Sick Leave Act: (effective April 1, 2020 to December 31, 2020)

  • Employers with less than 500 employees are required to pay sick leave if an employee (regardless of length of employment) is unable to work (including remotely) due to one of the following:
  1. government-mandated quarantine due to COVID-19 (federal, state or local);
  2. self-quarantine based on the advice of a health care provider in relation to COVID-19;
  3. experiencing symptoms of COVID-19 and seeking medical diagnosis;
  4. caring for an individual who is under government-mandated or health care provider recommended quarantine due to COVID-19;
  5. caring for their child whose school/place of care are closed due to COVID-19; or
  6. any other substantially similar condition (clarification on this from the Secretary of Health and Human Services to come).
  • Full-time employees to receive 80 hours of sick leave and part-time employees to receive the equivalent of the average number of hours work in a 2-week period.
    • Reasons 1-3 listed above – employees to receive regular pay, not to exceed $511/day or $5,110 total
    • Reasons 4-6 listed above – employees to receive 2/3 of regular pay, not to exceed $220/day or $2,000 total
    • Cannot require employees to first use other paid time off or advanced notice of first day of paid sick leave
  • Business closures or shutdowns are NOT covered reasons for paid sick leave
  • Employers to post a notice advising employees of these rights by March 25, 2020
  • Exemption available for employers with fewer than 50 employees in some circumstances – more information to come

Emergency Family and Medical Leave Expansion Act: (effective April 1, 2020 to December 31, 2020)

  • Applies to employees of employers with less than 500 employees who have worked for the employer for at least 30 days whose child’s school/place of care has closed due to COVID-19
  • Eligible employees may take up to 12 weeks of leave if unable to work (including remotely)
  • Pay schedule: the first 10 days are unpaid with the option for the employee to use accrued paid sick leave or vacation; after, the employer is to pay 2/3 of normal wages for regularly scheduled hours, not to exceed $200/day or $10,000 total
  • Employee to provide employer with as much notice as is practicable
  •  Reinstatement of employee after FMLA leave related to COVID-19:

o    Employers with more than 25 employees – returning employee entitled to same or equivalent position

Employers with less than 25 employees – returning employee entitled to same position unless it does not exist due to economic conditions or other conditions caused by COVID-19 emergency. If so, employer is to make reasonable effort to restore o    employee to equivalent position and if unavailable, reach out to the employee for at least a year if equivalent position becomes available

  • Exemption available for employers with fewer than 50 employees in some circumstances – more information to come

Payroll Tax Credits:

  • Employers paying sick and/or family leave as outlined above may receive a refundable credit against quarterly employer Social Security payroll taxes equal to 100% of qualified sick and/or family leave wages paid in that quarter. The credit also includes the employer’s qualified health plan expenses allocable to the sick and/or family leave wages.
  • Self-employed individuals are allowed a refundable credit for sick and/or family leave against self-employment taxes if they would otherwise be entitled to the sick and/or family leave if they were an employee. The credit is equal to the number of days the individual cannot perform services (not to exceed the applicable 10 days for employees) times the lesser of $200/day or

o    100% for reasons 1-3 listed above and 67% for reasons 4-6 listed above of average daily self-employment income for the year (calculation outlined in the law) for sick leave

o    67% of average daily self-employment income for the year (calculation outlined in the law) for family leave

  • This will require coordination with your payroll service provider.
  • Further information about implementation of the credit to come this week.

Tax-Free Medical Reimbursements to Employees:

  • Employers can make tax-free payments to employees that are deductible to the employer to reimburse reasonable and necessary personal, family, living, or funeral expenses incurred as a result of COVID-19. i.e. out-of-pocket medical expenses, over-the-counter medications, hand sanitizer, costs to enable an employee to work from home during the pandemic, and costs for child care or tutoring for family members not permitted to attend school during the pandemic.

Small Business Loans:

  • The Small Business Administration is offering low-interest loans to businesses affected by COVID-19. Loans up to $2 million to provide support for fixed debt payments, payroll, accounts payable and other bills. The interest rate is 3.75% for small businesses and 2.75% for non-profits with terms up to 30 years. The SBA has been encouraged to expedite the loan process in response to COVID-19. 

DELAWARE

Income Tax Filing Deadlines:

  • Corporate, fiduciary and personal income tax returns automatically extended to July 15, 2020 as well as the 1st quarter estimated tax payments.
  • 2nd quarter estimated tax payment due date remains June 15, 2020.

Other News:

  • Stay-at-Home Order issued from March 24, 2020 to May 15, 2020 or earlier if public health threat is eliminated. Closure of non-essential businesses included (list here)
  • Schools closed through May 15, 2020 or earlier if public health threat is eliminated
  • Delaware presidential primary moved to June 2, 2020

Small Business Loans:

  • The Delaware Division of Small Business is offering the Hospitality Emergency Loan Program (HELP) to eligible businesses in the hospitality industry. Eligible businesses that have been open for at least a year with annual revenue less than $1.5 million may qualify for no-interest loans of up to $10,000 per month. Information and application for hospitality businesses here.

PENNSYLVANIA

Income Tax Filing Deadlines:

  • Personal income tax returns automatically extended to July 15, 2020, including payment of balances and 1st quarter estimated tax payments.
  • 2nd quarter estimated tax payment due date remains June 15, 2020.

Other News:

  • Stay-at-Home Order issued for the following counties from March 23, 2020 to April 6, 2020: Allegheny, Bucks, Chester, Delaware, Monroe, Montgomery, and Philadelphia. Closure of non-essential businesses included (list here). Request for waiver to remain open available here.
  • Schools closed until at least April 6, 2020

Small Business Loans:

  • The COVID-19 Working Capital Access Program (CWCA) was approved March 23, 2020. Businesses located in PA with fewer than 100 employees. Loans will be the lesser of 3 months of working capital or $100,000 with 0% interest rates for all business types except Agricultural Producers. Applications are to be processed through the organization designated to the county the business is located in. As of March 25, 2020, applications are not yet being accepted. General information here and Chester County application information here.

MARYLAND

Income Tax Filing Deadlines:

  • All taxpayers granted automatic extension of time to file income tax returns to July 15, 2020, including payment of tax and 1st quarter estimated tax payments.
  • 2nd quarter estimated tax payment due date remains June 15, 2020.
  • Withholding tax payments due for February, March, and April of 2020 may be submitted by June 1, 2020 without penalty or interest

Other News:

  • Closure of non-essential businesses starting March 23, 2020 at 5PM, following federal guidelines (list here)
  • Schools closed until April 27, 2020

Small Business Loans:

  • The Maryland Department of Commerce enacted the Maryland Small Business COVID-19 Emergency Relief Fund to provide up to $125 million in loans and grants. Businesses with under 50 employees are eligible to apply. Loans up to $50,000 and grants up to $10,000 available. Additional information available here.

OTHER USEFUL RESOURCES

Updated 3/25/2020

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At Albero, Kupferman & Associates, we've been serving the accounting needs of WILMINGTON, DE and the surrounding areas for years. If you need help managing any aspect of your home or business's finances, we want to hear from you.

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Saturday: Closed
Sunday: Closed

Albero, Kupferman & Associates

1701 SHALLCROSS AVENUE SUITE D,
WILMINGTON, DE 19806
T: (302) 230-7171
F: (302) 472-1700
E: info@aka-cpa.com

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