Erock Tax has compiled a list of resources for you and your business that we hope you will find helpful as we all navigate through the impacts and changes transpiring from the COVID-19 outbreak.
We’ve included information on the federal and state tax updates and a comprehensive guide to resources for businesses. You can also find highlights of the $2 trillion stimulus package and legislation regarding coverage of sick pay and family leave (Families First Coronavirus Response Act).
In addition, tax season is known for heightened fraud schemes, but in the midst of a global crisis, unfortunately, the risk is even greater. Please protect yourself against scams, whether over the phone, in phishing emails, or on malicious websites. See additional information below.
Under Governor Baker’s recent Emergency Order, Erock Tax has been categorized as essential business due to the importance of tax compliance at the state and federal levels. We are in full swing into the tax season and encourage any business or individual who anticipates a refund to contact us as soon as possible to file their taxes. The extra source of income could provide much-needed cash flow to those experiencing a reduction in income.
At Erock Tax, we want to help guide you through these uncharted waters with resources and expertise for perspective and support. We are all in this together and will get through this together.
I hope these resources provide further guidance and clarity to your situation. Feel free to setup a virtual conference call with us or call the office line at (781) 247-5569 so we can offer insight that may positively impact your tax and financial lives during this time.
We hope you are all staying safe and in good health.
Tax Information
Federal Tax Filing Deadline
The Treasury Department and Internal Revenue Service extended the federal tax filing deadline from April 15 to July 15, 2020 to give all individuals and businesses an extra 90-day extension to file their returns.
We covered the news in a recent blog article with more information.
State of Massachusetts Filing Deadline
The Massachusetts Department of Revenue has followed suit with the federal income tax deadline extension and announced that all Massachusetts residents will have until July 15 to file income tax returns.
Federal Resources
The CARES Act Stimulus Package
The CARES Act was signed into law on Friday, March 27, 2020 and provides a $2 trillion federal stimulus package that includes much-needed relief to individuals, businesses, and our economy.
- $350 billion federally guaranteed lending program for small businesses that continue to pay employees through the crisis
- $10 billion is Small Business Administration grants up to $10k
- $250 billion in direct payments to Americans—$1,200 per adult and $500 per child. These amounts (based on your most-recently filed tax return) will start to phase out for individuals earning $75,000 and stop at $99,000 ($198,000 for couples filing jointly).
- $130 billion for hospitals
- $150 billion for state and local government
- $17 billion for SBA to cover six months of payments for businesses with current SBA loans
- $30 billion in emergency education funding
- $25 billion in transit funding
- $30 billion for FEMA’s disaster relief fund
- $500 billion fund for distressed businesses
- Extension and enhancement of unemployment benefits with broader eligibility
- REAL ID deadline delayed to September 2021
- Student loan payments suspended
- 401(k) hardship withdrawals up to $100k without penalty if repaid within three years
- Waives RMDs (required minimum distributions) for retirees in 2020. Since RMDs are calculated based on account balances at the end of the prior year, retirees would be taking RMDs and calculating taxes owed on a stock portfolio that is down due to the volatile market fluctuations.
- Charitable contributions for taxpayers who do not itemize are allowed an above-the-line deduction for up to $300 in 2020. For taxpayers who itemize, the 60 percent of adjusted gross income limitation is suspended for 2020. These modifications exclude donor-advised funds.
- Amends portions of the Families First Coronavirus Response Act
Families First Coronavirus Response Act – Emergency Paid and Expanded Family Leave
A recent federal response to the ongoing economic crisis will provide small and midsize businesses reimbursement for the cost of providing COVID-19-related leave to their employees. Eligible businesses are able to receive refunds for providing paid leave and childcare leave, among others, for employees who are unable to work due to the coronavirus outbreak.
Economic Injury Disaster Loan Program
The Small Business Administration is providing an Economic Injury Disaster Loan Program (EIDL) for small businesses and private nonprofits that have been adversely impacted by the COVID-19 outbreak. The SBA recently updated the terms of the loan and extended the deferment timeframe from four months to the first 12 months of the loan. Loans can be up to $2 million and have a long-term repayment schedule of up to 30 years.
Federal Interest Rates
The Federal Reserve has announced that it will cut interest rates to 0% and take additional steps to stabilize the economy.
Student Loans
The Secretary of the Education will be waiving interest on all student loans held by the Federal Government.
State of Massachusetts Resources
Small Business Recovery Loan Fund
Governor Baker announced a $10 million relief fund for Massachusetts businesses affected by the coronavirus. Funds up to $75,000 are immediately available for companies with fewer than 50 full- and part-time employees.
An Act to Provide Relief for Municipalities and School Districts
An Act to Further Address Challenges Faced by Municipalities and School Districts Resulting from COVID-19
The Baker-Polito Administration proposed legislation that would provide administrative relief to state and local government entities impacted by the ongoing outbreak, including modifying local permitting processes, enabling municipalities to extend tax and finance deadlines, and extending deadlines for certain education requirements.
Unemployment Assistance
Massachusetts is also offering a more seamless approach to receiving unemployment assistance. Governor Baker issued legislation that expedites claims by waiving the one week waiting period for unemployment benefits.
Flexibility in Insurance Issuance and Administration
Massachusetts’ Division of Insurance issued guidance for insurance carriers to offer flexibility to individuals and businesses during the COVID-19 public health crisis.
Business Interruption Insurance
If your business has experienced significant losses during the pandemic, ask your insurance provider if you may be eligible for business interruption insurance. If it’s not covered for this emergency, it may provide a better security blanket if a next time should occur.
Health and Human Services
Continue to maintain healthy habits as instructed by our health administrations. Be sure to wash your hands frequently, keep social distancing, avoid touching your face, stay at home (especially when sick), cover your mouth with your elbow when coughing or sneezing, and diligently clean common areas, and sanitize packages and groceries before bringing them into your household.
Massachusetts Department of Health
Centers for Disease Control and Prevention
Cybersecurity and Fraud
The large majority of people are community-minded, helpful individuals who positively contribute to society. However, there are a small number of people who prey on victims during times like these. Be smarter than them. Don’t click when that voice tells you something seems off. Don’t answer calls from numbers you don’t know. Don’t visit websites that you’re not familiar with.
Unfortunately, we have to be mindful of fraudulent activity and scammers all the time, but during tax season and global crises, criminals feast. They are leveraging the COVID-19 pandemic to steal information and money. The U.S. Secret Service issued an alert to the public on what to watch out for.
Be aware of fake emails from the Centers for Disease Control and Prevention (CDC) or other organizations that have news on the coronavirus. And please be careful when any site asks you for your personal information.
Remember the following tips and avoid suspicious activity:
- Do not open attachments or click links within emails from senders you don’t recognize.
- Do not provide your username, password, date of birth, social security number, financial data, or other personal information in response to an email or robocall.
- Always verify the web address of legitimate websites and manually type them into your browser.
- Check for misspellings or wrong domains within a link (for example, an address that should end in a “.gov” ends in .com” instead).
Please reach out if you have questions or would like to discuss how to get your finances on track. We’re here to help you get through this, one resource link at a time. You can call our office at (781) 247-5569, text the office line at (781) 790-4504, or email me at stu@erocktax.com.
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About Stu: With more than 30 years of experience as a tax professional, Stu Steinberg brings a broad depth of knowledge to his work with his clients. Stu founded Erock Tax to help provide tax and financial planning strategies to individuals, families and small businesses and is passionate about empowering his clients through education about their money health. Stu is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.