COVID-19 Cares Act /
As we continue to mention, it is in these moments that we thank you for the opportunity to serve you! This is an uncertain time for all of us and it is our privilege to help you as we weather this storm together. At AIA, we have undergone many changes and are learning how to best communicate with you as our client. As we continue to monitor state and federal government programs and opportunities, we want to make sure we are communicating these in a streamlined way to act with speed and efficiency.
The President signed the $2 trillion coronavirus stimulus bill marking the largest stimulus in U.S. history. We wanted to take some time to provide you with an update on the contents of this bill. This is not intended to be a comprehensive list nor is it to display the full content within the bill.
Provisions for Individuals
- Direct Payments to Individuals – recovery rebates of up to $1,200 for individuals earning an adjusted gross income of less than $75,000 of $2,400 for joint filers earning less than $150,000. The amount increases by $500 for each child. The rebate is phased out above those AGI limits, no rebates above $100,000 single or $200,000 for a couple.
- Delayed Tax Filing Deadline – The IRS and most states have delayed income tax filings until July 15. Payment of tax is also delayed without penalty assessment. Some states will still add interest to amounts owed.
- Expanded Unemployment Benefits – the bill increases and extends unemployment benefits, including access to health insurance, for four months for Americans who have lost jobs or been furloughed. Self-employed and contract workers who are typically ineligible qualify as well. Supplemental unemployment from the feds will be an additional $600 per week over and above whatever payments your resident state pays.
- Relaxed Retirement Withdrawal Rules – Employers can allow access to retirement plan participants who have been affected by COVID-19 the ability to withdraw funds up to $100,000. These types of distributions can also be taken from individual retirement accounts as well. While the distributions will be taxable, there will be no early withdrawal penalty on these distributions.
Provisions for Small Businesses
- SBA Disaster Loans – while not a part of this bill, most states have qualified to issue low interest long term loans to small businesses who have been affected by the COVID-19 crisis. These loan proceeds will be repaid over 30 years with an interest rate under 4%. We have been preparing numerous applications for these loans and would encourage every small business that has had a downturn in revenue to contact us regarding sending an application.
- SS Tax Deferral – the matching funds paid by employers to the SSA have been delayed for the second, third and fourth quarters. These payments will not have to be made during these quarters, but will be repaid 50% during 2021 and 50% during 2022. This will require the payroll systems and reporting for each business to be changed from your current patterns starting with payroll paid next week and beyond. Please contact us for instructions regarding making these changes.
- Small Business Interruption Loans – businesses with less than 500 employees can receive fee-free loans of up to $10 million to help cover payroll, rent, mortgages and utilities. The application process will involve certification of payroll amounts and that the business has been “affected” by COVID-19. We can make those certifications for your business. The repayment of these loans can be forgiven under certain guidelines as well if employees and salary levels are maintained in the future. We will be able to assist with compliance with these standards to make certain the loans do not have to be repaid. The SBA Disaster Loans will provide relief independent from these provisions.
We appreciate your business and are ready to partner with you during these uncertain times.
Please reach out if you are in need of interim bookkeeping assistance or use of our cash-flow monitoring tool. If you have any questions relating to this or any further service offering in which we might be able to provide at this time, please let us know by filling out the form. We’re happy to help in any way that we can!