[UPDATED 3/31/2020 11:15 AM]
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law by the president on Friday March 27th. Very few details of the exact implementation have been released. I will provide additional information as it becomes available.
The program will be administered through the Small Business Administration, a cabinet level federal agency. Typically, SBA loans and funding are made through participating lending institutions. Like mortgage insurance on home loans, money is provided by a lending institution and payment is guaranteed by the federal government. The CARES Act appears to circumvent that process and have the SBA provide funds directly from the treasury.
For the SBA website click here.
The SBA is currently offering multiple funding opportunities. The two that appear to be of most interest to you specifically are:
- Economic Injury Disaster Loans and Loan Advance and
- Paycheck Protection Program
The Economic Injury Disaster Loans and Loan Advance has a very simple online application. You will need two or three numbers from a business financial statement that covers the period February 1, 2019 through January 31, 2020. You will be provided a forgivable loan to cover payroll, payroll tax, rent, mortgage interest, and debt payments for loans already in place. The loan is forgivable if you meet certain criteria. The CARES Act is very clear: The amount of the loan forgiven will be deemed taxable income to your business.
I encourage every business owner to apply for this loan promptly. The deadline is June 30, 2020. If you apply and subsequently determine the funds are not needed, I am assuming you will be able to cancel your application prior to funds being disbursed. The interest rate, and fees (if any) for this loan are currently unknown.
To apply for the Economic Injury Disaster Loans and Loan Advance please visit this link: https://covid19relief.sba.gov/#/
The Paycheck Protection Program provides for forgivable funds to maintain payroll for a period of up to eight weeks. The SBA does not currently have a separate link or application for this specific program. It appears the Paycheck Protection Program (PPP) is a subset of the larger Economic Injury Disaster Loans and Loan Advance program.
I would like to kindly request: please, please, please do not call the office for information regarding these programs without first reading the information available on the SBA website.
If it becomes necessary to have a specific bank be involved, I would like you to use Wells Fargo. I have a working relationship with Carol Vi-Thompson and spoke with her yesterday. At this time Carol says you should submit your application online through SBA.GOV and only come to the bank if, and only if, directed by SBA to do so.
[UPDATED 3/26/2020 10:00 AM]
Summary: Both the federal and state governments have extended the tax filing deadline to July 15, 2020. Taxpayers do not need to take any action to take advantage of the delayed due date. No interest or penalties will be assessed if tax returns are filed and balances due are paid in full by July 15, 2020.
Oregon summary: Oregon COVID-19 tax relief options
Abbot Tax Service will prioritize tax returns of individuals who have been laid off due to business slowdowns and businesses in need of current financial statements to secure emergency lending to stay afloat.
[UPDATED 3/23/2020 13:00:00]
Governor Brown signed executive order NO. 20-12 which provides orders and guidelines for conducting business in Oregon for the foreseeable future. A complete copy of the executive order can be found here. This order effects Abbot Tax Service in the following way: Employees are working from home when able. Adequate social distancing measures, and cleanliness guidelines are being followed at the office. The office remains open for tax return drop off and pickup Monday through Friday, 9:00AM to 5:00PM. An appointment is REQUIRED. Clients must make up their own minds if they will keep scheduled appointments. We are working on mechanisms for you to meet with us by video chat, or convert your meeting to a phone appointment.
We continue to request your patience in allowing us significant time complete your tax returns. The time we spend adapting and accommodating government and client requests regarding COVID-19 impacts all clients.
[UPDATED 3/20/2020 18:30:00]
The IRS has officially moved the tax return due date for 2019 tax returns from 4/15/2020 to 7/15/2020. No payments are due until 7/15/2020 and no extensions need to be filed.
See: Notice 2020-18 (PDF), Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic
We will process your tax returns as we are able.
[ORIGINAL POST BELOW]
In the past few days there have been some statements issued by our government that have possibly confused individual taxpayers. The biggest item is the “extension” that was given out to all individuals and C-Corporations regarding extending the interest and penalty period by 90 days past the April 15th filing deadline. We would like to provide some additional information to our clients.
The tax deadline remains April 15th 2020 for the 2019 tax year. Taxpayers must file a tax return, or an extension, on or before April 15, 2020. To help taxpayers and some corporations during the COVID-19 outbreak, the IRS has deferred payment and interest penalties until July 15th, 2020. If you are unable to pay in full before July 15, 2020, a payment plan may be established.
To repeat: Taxpayers must file a tax return, or extension, on or before April 15, 2020. To avoid interest and penalties, payment in full is required on or before July 15, 2020.
Please see the official statement: Treasury and IRS Issue Guidance on Deferring Tax Payments Due to COVID-19 Outbreak
The above information is for your federal tax return only.
Oregon has yet to make a decision on how they will respond. Please see Oregon COVID-19 tax relief options.
Abbot Tax Service has received numerous calls regarding the IRS policy and the status of tax returns that we have in office. We understand that you may be anxious in regards to this pandemic and would like to have answers. We are encouraging our clients to have patience during this time of uncertainty. Our focus is on preparing your returns as fast as possible while maintaining the safety of our staff and clients that we serve. Unfortunately, the increased number of calls and emails has slowed down our ability to focus our tax preparation work. Currently, we are asking our clients to exercise patience and allow us to prepare your return. We are operating at a slightly limited staff related to our employee’s rights and government recommendations for limiting potential exposures.
If you have an appointment with Abbot Tax Service in the next couple of weeks leading up to April 1st and wish to convert your appointment to a phone interview and mail your documents to us via USPS or upload them to the client portal to minimize your risk we are willing to work with you. We ask that you call the office at 503-520-8888 and Shawn will reach out to you directly to figure out the best option for you. This may take up to 48 hours.
The best message we can convey to you at this time is the following: Under the currently released policies, there is absolutely no federal consequence of any kind to delay the filing of your federal tax return and payment of your federal tax liability until July 15, 2020. Oregon remains unknown. If we are unable to compete your tax return by April 15, 2020, we will automatically file an extension for you. We kindly request you refrain from calling the office to request an extension.
Again, we appreciate your patience in this time of uncertainty, we assure you that our staff is doing all that we can to maintain the productivity in the office. We are all navigating through uncertain waters, but we are actively striving to meet all of our clients’ needs while following local and federal guidelines. Thank you for choosing Abbot Tax Service, we will be in touch soon!