A Message To Our Clients and Friends
March 22, 2020
Following orders issued by the governor earlier today, all Bourgeois Bennett offices will be closed effective 5pm Monday March 23, 2020.
Our business continuity plan was implemented last week and most all personnel were working from home or otherwise remotely. We have had no disruption in services to our clients and expect the same going forward. We are continuing to monitor changes to tax regulations and deadline as well as new benefit programs and relief proposals as they unfold.
Should you call our office starting Tuesday March 24th, you will hear a new greeting from our firm. The greeting will encourage you to leave a detailed voice message with the team member assigned to your account. Please follow the company directory instructions. Your call will be returned promptly. All personnel have been instructed to review voicemails throughout the day and return your call the same day or at the latest the next morning. Should your need be urgent and you cannot reach our team member, please call my extension (236) or call my direct line at 504-840-3836. I will call you personally to address your concerns.
We are appreciative of the opportunity to serve you and will be responsive to your needs throughout this crisis. Should you have any questions regarding the continuity of our services to you during these historic times, please contact me or your Bourgeois Bennett advisor. If we can assist you with technology challenges or business continuation practices, please call as our professionals are ready to help.
Please stay safe during this crisis. Your health and that of your family and friends is what matters most during these troubling times.
Eric F. Fullmer, CPA
CORONAVIRUS TAX UPDATE
March 30, 2020
INCOME TAX FILING AND PAYMENT RELIEF
- The Federal April 15th tax filing and tax payment deadlines have been extended to July 15th. Delayed tax payments are only allowed for federal income tax payments and federal estimated income tax payments that would normally be due April 15, 2020. These payments are now due July 15, 2020.
- This delayed payment opportunity could result in significant tax payments being due in June/July after taking into account that 2nd quarter 2020 estimated tax payments are currently due June 15, 2020.
- The Louisiana Department of Revenue has extended the filing and tax payment deadlines for any Partnership, Individual, Fiduciary, and Corporate income tax returns originally due April 15th and May 15, 2020 until July 15, 2020.
- At this point in time, the Louisiana Department of Revenue has not extended the 1st quarter 2020 estimated tax payment beyond the original April 15, 2020 due date.
- The Federal Gift Tax Return filing deadline and the deadline for paying federal gift or generation skipping transfer tax has been extended from April 15, 2020 to July 15, 2020.
- We will work with you to develop a plan on filing or extending your 2019 tax returns.
- Recovery rebates are being treated as advance refunds of a 2020 tax credit.
- Individuals will receive: $1,200 (single) or $2,400 (married filing joint) plus $500 for each qualifying child.
- The credit will start to phase out for taxpayers with adjusted gross income (AGI) above:
- Joint filers - $150,000
- Head of household filers - $112,500
- Single filers - $75,000
- This rebate is not available to nonresident aliens, individuals who can be claimed as a dependent by another taxpayer, or estates and trusts.
- Taxpayers will reduce the amount of the credit available on the 2020 tax return by the amount of the advance payment received.
EMPLOYEE/PAYROLL TAX CREDITS
PAID SICK LEAVE CREDIT
Employees of eligible employers can receive two weeks (up to 80 hours) of paid sick leave at 100% of the employee’s pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis. The employer may receive a refundable sick leave credit for sick leave at the employee’s regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days.
Employees who are unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reason related to COVID-19 can receive two weeks (up to 80 hours) of paid sick leave at 2/3 the employee’s pay. Employees who are unable to work due to a need to care for a child whose school is closed, or child care provider is unavailable for reasons related to COVID-19, may in some instances receive up to an additional 10 weeks of expanded paid family and medical leave at 2/3 the employee’s pay. The employer may receive a refundable credit for two-thirds of the employee’s regular rate of pay, up to $200 per day and $2,000 in the aggregate, for up to 10 days.
CHILD CARE LEAVE CREDIT
In addition to the sick leave credit, for an employee who is unable to work because of a need to care for a child whose school or child care facility is closed or whose child care provider is unavailable due to the Coronavirus, eligible employers may receive a refundable childcare care leave credit. This credit is equal to two-thirds of the employee’s regular pay, capped at $200 per day or $10,000 in the aggregate. Up to 10 weeks of qualifying leave can be counted towards the child care leave credit.
Both the Paid Leave Credit and the Child Care Leave Credit start April 1st. The IRS stated it will release forms for these credits this week.
EMPLOYEE RETENTION CREDIT
This credit is for wages paid to employees who are not working due to the employer’s full or partial cessation of business or a significant decline in gross receipts due to the coronavirus pandemic. Eligible employers may be eligible for a credit against employment taxes equal to 50% of qualified wages (up to $10,000 in wages) for each employee. The credit applies to wages paid after March 12, 2020 and before January 1, 2021. For employers with more than 100 employees, wages eligible for the credit are wages that the employer pays employees who are not providing services due to the suspension of the business or a drop in gross receipts. For employers with 100 or fewer employees, all wages paid qualify for the credit. This credit is not eligible for employers who receive a Paycheck Protection Program SBA loan.
PAYROLL TAX DELAY
Payments of 50% of 2020 employer payroll taxes and self-employment taxes are delayed until December 31, 2020, with the remaining 50% due December 31, 2022. Note this is not available to employers who receive a Paycheck Protection Program SBA loan.
Taxpayers can take up to $100,000 in coronavirus-related distributions from retirement plans without being subject to any early distribution penalty. An eligible taxpayer is an individual (or the spouse or dependent of an individual) who has been diagnosed with COVID-19 disease with a CDC approved test or who experiences adverse financial consequences as a result of quarantine, business closure, layoff, or reduced hours due to the virus. Any resulting income inclusion can be taken over three years and taxpayers may recontribute the withdrawn amounts to a qualified retirement plan without regard to annual caps on contributions if made with three years. Eligible distributions may be taken up to December 31, 2020.
Required minimum distributions are suspended for 2020.
Loans of up to $100,000 from qualified plans are allowed and repayment can be delayed.
OTHER TAX ITEMS
An above-the-line deduction of up to $300 for charitable contributions made by an individual will be allowed for 2020. This opportunity is available for those taxpayers that do not itemize their deductions.
Cash charitable contributions made by individuals will be limited to 100% of adjusted gross income for 2020. This provision doesn’t apply to non-cash donations, donations to a private foundation, or a donor advised fund.
Charitable contributions for corporations will be limited to 25% of taxable income for 2020.
Qualified improvement property – the technical correction has been made to change this property to 15 year property under Sec. 168.
Net operating losses - the 80% income limitation is temporarily repealed for net operating loss deductions for tax years beginning before 2021. A 5 year carryback is allowed, but you can elect to forgo the carryback for losses arising in 2018, 2019, and 2020.
Excess loss limitations - Sec. 461(l) excess loss limitation is repealed with this bill. Sec 461(l) was added to the Code by the law known as the Tax Cuts and Jobs Act which disallowed excess business losses of non-corporate taxpayers if the amount of the loss exceeds $250,000 ($500,000 for married taxpayers filing jointly.)
Corporate alternative minimum tax (AMT) - AMT credit is modified for corporations to make it a refundable credit for the 2018 tax year.
Interest limitation – For tax years beginning in 2019 and 2020, Sec. 163(j) is amended to increase the adjusted taxable income percentage from 30% to 50%. Taxpayers can elect to use 2019 income in place of 2020 for the computation.
Tax information is changing daily and we will continue to update you.
As always, stay safe and let your Bourgeois Bennett representative know how we can assist you during this time.
March 30, 2020
Bourgeois Bennett CPAs & Consultants is one of the largest locally-owned, regional accounting firms in Louisiana providing service to clients throughout the Gulf Coast region. We work hard to add value to our client businesses and to enrich Louisiana's future, because we are here as permanent members of the community.
Whether for a large corporation, governmental entity, professional service organization, emerging entrepreneurial venture or family business, we put the right accounting, tax, and consulting services together to nurture your success. It's part of our long tradition of personalized service. Discover the difference that the business and accounting specialists at Bourgeois Bennett can make in your bottom line - and in your peace of mind.