Archives for March 2020

Coronavirus Relief Bill

The Congress has passed a $2 trillion coronavirus relief bill intended to keep businesses and individuals afloat during this unprecedented time when most of America is on hold. The bill is being sent to the President for his signature.

The legislation includes direct payments to individuals, an expansion of unemployment insurance, billions of dollars in aid to businesses large and small, and significant funding for the healthcare industry.

Here, in broad strokes, are some of the main features of the bill:

1. It creates the Paycheck Protection Loan Program, with a price tag of $349 billion, which greatly expands the eligibility of businesses suffering as a result of the COVID-19 pandemic for SBA loans. The program will allow businesses to borrow money for expenses such as (i) payroll, (ii) continuation of health care benefits, (iii) mortgage interest obligations, (iv) rent and utilities, and (v) interest on debt incurred before the “covered period”, which is February 15, 2020, through June 30, 2020. Eligible businesses include non-profits and physician practices. The loans can be forgiven through a process that incentivizes businesses to retain employees. It also raises the maximum amount for such a loan by 2.5 times the business’s average total monthly payroll costs, up to $10 million. The interest rate on loans may not exceed 4%.
2. It calls for a payment of $1,200 to Americans making $75,000 or less ($150,000 for couples filing joint returns and $112,500 for heads of household) and $500 for each child, to be paid “as rapidly as possible.”
3. It provides relief funds of $130 billion for the medical and hospital industries, including funds for medical supplies and drug and device shortages, and expands Medicare telehealth services, including those unrelated to treatment for COVID-19.
4. It enlarges eligibility for unemployment insurance and provides an additional $600 per week on top of the unemployment amount customarily available under state law.
5. It authorizes up to $500 billion worth of loans and loan guarantees to eligible businesses, states and municipalities for wages, salaries and benefits, including $46 billion reserved for passenger air carriers ($25 billion), air cargo carriers ($4 billion) and businesses important to maintaining national security ($17 billion) and a $454 billion credit facility for programs designed to support lending to eligible businesses, states and municipalities. Businesses receiving loans through these programs will be prohibited from paying dividends or repurchasing stock or other outstanding equity interests while the loan or loan guarantee is outstanding and for 12 months following repayment.
6. It loosens the limitations of the Defense Production Act of 1950, allowing the government to correct a “shortfall” in “industrial resources” for two years from the date of enactment, without regard to the current $50 million spending limit.
7. It allows the Secretary of the Treasury to make loans or loan guarantees to eligible businesses, states, and municipalities and relaxes certain regulations imposed by prior legislation, such as the Dodd-Frank Act and the Economic Stabilization Act of 2008.
8. It provides temporary relief for federal student loan borrowers, deferring student loan payments through September 30, 2020, without penalty to the borrower for all federally owned loans, which applies to approximately 95% of student loan borrowers.
9. It prohibits foreclosures on all federally-backed mortgage loans for 60 days starting March 18, 2020, and provides up to 180 days of forbearance for borrowers of a federally-backed mortgage loan who have experienced a financial hardship related to COVID-19.

In addition, the Senate passed supplemental appropriations to help the government respond to the COVID-19 pandemic, which includes the following:

• $9.5 billion to support agricultural producers impacted by COVID-19, including livestock producers, producers of specialty crops and producers that supply local food systems.

• $8.8 billion in additional funding for Child Nutrition Programs, for food purchases and demonstration projects for schools.

• $80 million to the FDA to support the development of medical countermeasures and vaccines, advance domestic manufacturing of medical products and monitor medical product supply chains.

• $25 million for the Distance Learning, Telemedicine and Broadband Program, to support access by rural communities to telecommunications-enabled information and audio and video equipment, and advanced technologies for students, teachers, and medical professionals.

• $20 million to increase the lending authority available through the Rural Business Cooperative Service, to provide financing to business owners who might not qualify for a loan on their own.

If you have any questions or would like more information on the issues discussed in this communication, please contact any member of our team.

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Tax Filing Deadline Extended

The Treasury Department and Internal Revenue Service announced that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020.

Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-­employment tax.

Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing payment and relief.

The New York State tax deadline has also been postponed to match the federal extension.

As your trusted professionals, we will keep you informed of any future tax updates as they arise.

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