COVID-19/Coronavirus: Extensions, SBA Loans, CARES Act and More…

With many of us scrambling to figure out how we are planning to adapt and make it through these challenging days, McDonald Jacobs wants to do what we can to help provide resources for you and your business.

Tax Return Filing Deadlines

Fortunately, the IRS has pushed back the filing and payment deadline from April 15 to July 15, 2020. More information can be found at:

• https://www.irs.gov/newsroom/payment-deadline-extended-to-july-15-2020

While most state and local jurisdictions have followed the IRS’s lead, the devil is in the details. For example, while Oregon has moved its 2019 filing and payment deadline from April 15 to July 15, 2020, the 2020 1st quarter estimated tax payments are still due April 15, 2020. More information can be found at:

• https://www.oregon.gov/dor/Pages/COVID19.aspx

Financial Assistance

Businesses and nonprofits are able to obtain funding from the Small Business Administration (SBA). Under certain circumstances, the loans are forgiven and not taxable. The following types of funding are available:

• Paycheck Protection Program 7(a) Loans – PPP
• Economic Injury Disaster 7(b) Loans – EIDL

For more information and to register:

• https://www.sba.gov/funding-programs/disaster-assistance

Prosper Portland plans to provide $2 million of grants and no interest loans for Portland small businesses impacted by the COVID-19. More information can be found at:

• https://prosperportland.us/portfolio-items/portland-small-business-relief-fund/

Similarly, Beaverton, Hillsboro, and Tualatin have all announced funding for impacted businesses. Information can be found at:

• https://www.beavertonoregon.gov/EmergencyBizAssistance
• https://www.hillsboro-oregon.gov/Home/Components/News/News/10503/44
• https://www.tualatinoregon.gov/economicdevelopment/city-tualatin-economic-stabilization-fund-program

2020 CARES Act

President Trump signed the CARES Act into law on March 27, 2020. The legislation attempts to provide individuals and businesses assistance for those impacted by the coronavirus outbreak. The Act includes:

• Taxpayers can expect to receive a one-time payment up to $1,200 or $2,400 for married couples. The amount received begins to phase out when income exceeds $75,000 for individuals and $150,000 for married couples.
• The Act allows employers to delay their portion of 2020 payroll taxes until 2021 (50%) and 2022 (50%).
• Impacted business may be eligible for a 50% payroll tax credit up to $10,000. The credit would be available to employers whose business was disrupted due to the coronavirus and is able to demonstrate a decrease in gross receipts of 50% or more when compared to the previous quarter. Other restrictions may apply.
• The 10% penalty for early withdrawal from retirement accounts has been waived for withdrawals up to $100,000. While these withdrawals are still taxed, the taxes are spread over three years.
• Required Minimum Distributions (RMDs) from IRAs and § 401(k) plans (at age 72) are suspended.
• For 2020, you are able to take a deduction for charitable donations up to $300, even if you take the standard deduction.
• The 80% rule has been suspended for Net Operating Losses (NOLs) generated in 2018-2020, and losses are now able to be carried back five years.
• Qualified Improvement Property (QIP) is now eligible for 100% bonus depreciation and able to be taken in the year eligible property is placed in service.

Because all of this is new and rapidly evolving and changing, we encourage to give us a call at (503) 227-0581, so that we can assist you with any questions regarding what you can do to make it through these unprecedented times.

Brian Rapp. CPA