coronavirus - Linkenheimer LLP CPAs & Advisors

What Are The Key Distinctions Between Layoffs And Furloughs?

As businesses across the country grapple with the economic fallout from the novel coronavirus (COVID-19) pandemic, many must decide whether to downsize their workforces to lower payroll costs and stabilize cash flow. If your company is contemplating such a move, you’ll likely want to consider the choice within the choice: that is, should you lay off workers or furlough them?

Basic difference

The basic difference between the two is simple. Layoffs are the ostensibly permanent termination of employees from their positions, though you can rehire some of these individuals when business improves. Meanwhile, a furlough is a mandatory or voluntary suspension from work without pay for a specified period.

In most states, furloughed workers are still considered employees and, therefore, don’t receive a “final” paycheck. Check with an employment or labor attorney, however, to make sure your state’s furlough laws don’t trigger final pay requirements.

Employee benefits are another issue to explore. Reach […]

By Linkenheimer LLP|2020-09-03T20:03:06+00:00April 15th, 2020|business, New Tax Laws, tax deadlines, tax implications|0 Comments

Relief From Not Making Employment Tax Deposits Due To COVID-19 Tax Credits

The IRS has issued guidance providing relief from failure to make employment tax deposits for employers that are entitled to the refundable tax credits provided under two laws passed in response to the coronavirus (COVID-19) pandemic. The two laws are the Families First Coronavirus Response Act, which was signed on March 18, 2020, and the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, which was signed on March 27, 2020.

Employment tax penalty basics

The tax code imposes a penalty for any failure to deposit amounts as required on the date prescribed, unless such failure is due to reasonable cause rather than willful neglect.

An employer’s failure to deposit certain federal employment taxes, including deposits of withheld income taxes and taxes under the Federal Insurance Contributions Act (FICA) is generally subject to a penalty.

COVID-19 relief credits

Employers paying qualified sick leave wages and qualified family leave wages required by the Families First Act, as well as qualified health plan expenses allocable to qualified leave wages, are eligible for refundable tax credits under the Families First Act.

Specifically, provisions of the Families First Act provide a refundable tax credit against an employer’s share of the Social […]

By Linkenheimer LLP|2020-09-03T20:03:07+00:00April 13th, 2020|employer, irs, New Tax Laws, relief, tax cuts, tax deductions, tax planning|0 Comments

IRS Provides Guidance Under The CARES Act To Taxpayers With Net Operating Losses

The Internal Revenue Service today issued guidance providing tax relief under the CARES Act for taxpayers with net operating losses. Recently the IRS issued tax relief for partnerships filing amended returns.

COVID Relief for taxpayers claiming NOLs
Revenue Procedure 2020-24 provides guidance to taxpayers with net operating losses that are carried back under the CARES Act by providing procedures for:

waiving the carryback period in the case of a net operating loss arising in a taxable year beginning after Dec. 31, 2017, and before Jan. 1, 2021,
disregarding certain amounts of foreign income subject to transition tax that would normally have been included as income during the five-year carryback period, and
waiving a carryback period, reducing a carryback period, or revoking an election to waive a carryback period for a taxable year that began before Jan. 1, 2018, and ended after Dec. 31, 2017.

Six month extension of time for filing NOL forms
In Notice 2020-26, the IRS grants a six-month extension of time to file Form 1045 or Form 1139, as applicable, with respect to the carryback of a net operating loss that arose in any taxable year that began during calendar year 2018 and […]

By Linkenheimer LLP|2020-09-03T20:03:08+00:00April 10th, 2020|business, extension, extensions, New Tax Laws, small business, tax deadlines, tax implications|0 Comments

Penalties For Late Property Tax Payments In California Will Be Waived

Due to the coronavirus (COVID-19) pandemic, penalties and other charges for late property tax payments in California will be waived. The CA Association of County Treasurers and Tax Collectors (CACTTC) has issued a statement regarding the April 10 tax collection deadline for the second installment of property tax for the 2019-2020 fiscal year. While the CACTTC cannot change the deadline, it can provide relief from the penalties, cost or other charges resulting from tax delinquency due to reasonable cause related to the crisis. The statement also encourages taxpayers to pay electronically. If you have questions, please reach out to your Linkenheimer CPA for help. See answers to frequently asked questions from the CACTTC here: https://bit.ly/3aysXvT

By Linkenheimer LLP|2020-09-03T20:03:09+00:00April 8th, 2020|property tax|0 Comments

CARES ACT Changes Retirement Plan and Charitable Contribution Rules

As we all try to keep ourselves, our loved ones, and our communities safe from the coronavirus (COVID-19) pandemic, you may be wondering about some of the recent tax changes that were part of a tax law passed on March 27.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act contains a variety of relief, notably the “economic impact payments” that will be made to people under a certain income threshold. But the law also makes some changes to retirement plan rules and provides a new tax break for some people who contribute to charity.

Waiver of 10% early distribution penalty

IRAs and employer sponsored retirement plans are established to be long-term retirement planning accounts. As such, the IRS imposes a penalty tax of an additional 10% if funds are distributed before reaching age 59½. (However, there are some exceptions to this rule.)

Under the CARES Act, the additional 10% tax on early distributions from IRAs and defined contribution plans (such as 401(k) plans) is waived for distributions made between January 1 and December 31, 2020 by a person who (or whose family) is infected with COVID-19 or is economically harmed by it. Penalty-free […]

By Linkenheimer LLP|2020-09-03T20:03:09+00:00April 7th, 2020|deduction, individuals, ira, New Tax Laws, relief, retirement, roth ira, tax deductions, tax planning, taxpayer relief act|0 Comments