The world has been turned upside down in the past few weeks. It’s really had an impact on businesses, employees, and personal finances. Our goal during this time is to keep people up-to-date with the most recent information. The place we are doing that most frequently on an ongoing basis is our Adam Shay CPA Facebook page. This information is current as of March 20, 2020.
Income Tax Related
The personal and C corporation income tax filing deadlines are now 7/15/2020. The IRS has also announced that they will allow the delay of payments originally due on 4/15/2020 to 7/15/2020. Those payments include personal 2019 income tax balance due up to $1MM and C corporation income tax balance due up to $10MM. In additional, Q1 2019 federal estimated income tax payments can be delayed until 7/15/2020. Note that Q2 2019 federal estimated income tax payments are still due on 6/15/2020.
On March 17th, 2020 North Carolina implemented the following unemployment claim changes:
Sick Leave Requirements
- There is no longer a waiting period to apply for benefits.
- There is no longer a requirement to be actively looking for a job to receive benefits. This could help in two ways:
- Few businesses are interviewing or hiring right now.
- A person could potentially be available for their employer when things return to normal.
- Reduced hours can potentially result in eligibility for unemployment.
- If employee termination is related to the Coronavirus then the employer's unemployment account is not charged.
A federal law was passed on March 18th, 2020 that requires employers with fewer than 500 employees to provide sick leave related to the Coronavirus. In a nutshell, employers with less than 500 employees must provide paid sick leave related to the Coronavirus in the following manner:
- 2 weeks paid sick leave to be diagnosed or quarantined.
- 2 weeks paid leave to care for an ill family member.
- 12 weeks 2/3 pay paid leave if an employee is caring for a child whose school is closed. The first two weeks can be unpaid.
The sick leave pay is capped at $511 per day and paid family or childcare leave is capped at $200 per day. There is a potential exemption for employers with less than 50 employees if it would jeopardize the viability of the business. It remains to be seen on how that exemption will be implemented. If you are an employer and have an employee that meets one of these conditions you should talk with an employment attorney about your specific situation.
From a tax perspective, there are a couple of relevant items. There are quarterly payroll tax credits for the employers to help with having to offset the paid sick leave. Self-employed individuals can apply for these sick leave benefits in the form of a credit to offset their self-employment income.
SBA Disaster Loans
All North Carolina counties have been declared a federal disaster area for the Coronavirus. That means a NC business could be eligible for SBA Economic Injury Disaster Loans
to help with working capital needs until normal operations resume.
Things to Potentially Come
The federal government is working on additional economic stimulus that could be disbursed to families. There is the potential that NC may open up unemployment to self-employed individuals. More details will be shared as they become available.
We realize that everyone wants immediate relief. While the government has moved relatively quickly on passing legislation, implementation and clearer frameworks will take time to put into place. There are a lot of moving parts with various pieces of legislation.
Our goal today was to provide updates for business and personal finances as it pertains to the Coronavirus crisis. This is a very fluid and dynamic situation that is still being implemented and interpreted. You need to talk with someone about your specific situation and current interpretations before taking action. If you have any questions, feel free to reach out to us.
Caroline Montgomery, CPA (NC License Number 39017), MSA, is tax manager and partner of Adam Shay CPA, PLLC. The most rewarding part of what she does is helping business owners and individuals achieve their goals, all while working with a dynamic team that is growing quickly. The firm focuses on a proactive approach by encouraging clients to minimize taxes via income tax planning and projections, or by focusing on other areas of their business as part of the firm's Virtual CFO services. The firm also offers tax preparation, fraud and forensic accounting and tax issue resolution services. She moved to Wilmington in 2014 and started at the firm in 2015. Caroline graduated with her her undergraduate and graduate degree in 2010 from East Carolina University. She is actively involved with NourishNC as their Treasurer and enjoys volunteering with various organizations throughout New Hanover County. In her free time, Caroline enjoys spending time with her husband, Mike, and dog, Mason, as well as travelling and going to the beach.