Today’s update includes details of the Paycheck Protection loan application, a change to the economic impact payment process for Social Security recipients, and a note on employer paid leave benefits.
Paycheck Protection Program loans
Applications for Paycheck Protection Program loans available to businesses and sole proprietorships (with employees) who are impacted by COVID-19 will open on Friday, April 3. The portion of the loans used to cover payroll costs, mortgage/rent, and utilities may be forgiven.
The loans are on a first-come, first-serve basis, so make sure you and your clients apply ASAP.
Applications should be made through a local bank. More information is available at:
Loan applications for independent contractors and self-employed individuals (with no employees) will be accepted starting April 10, 2020.
Economic impact payments for Social Security recipients
After a discussion of forcing seniors to file returns, the IRS has announced Social Security recipients will not have to file income tax returns to receive an economic impact payment. The IRS will rely on Form SSA-1099 and Form RRB-1099 for purposes of determining the amount of the impact payment.
But Social Security recipients who have any dependents and have not previously filed a return for 2018 or 2019 may want to consider filing a return; otherwise, the payment will only be issued for the $1,200 for the recipient and not their spouse or any of their dependents.
Taxability of employer-paid leave benefits
Employer-paid sick leave benefits and employer-paid family leave benefits mandated by the Families First Coronavirus Response Act (FFCRA) are treated as taxable wages to the employees. Employers do not have to pay the employer share of Social Security taxes (6.2%) on these payments. (FFCRA §7005)
Sign up for Spidell’s CARES Act for Tax Pros Webinar and get details on how the stimulus payments work, find out how to help your clients take advantage of Payroll Protection loans, and more. Multiple dates and times are available, so click here and register today!
Sign up for Spidell’s Flash E-mail — Get breaking news delivered to your inbox, plus other free analysis and information for tax professionals. Join our community and stay at the top of your game. Click here to sign up.