CORONAVIRUS TAX RELIEF

Canada's Economic Response to COVID-19

Canada's response to COVID-19 can be viewed here.

U.S. Economic Response to COVID-19 

The House passed the Families First Coronavirus Response Act (H.R. 6201) on March 14, 2020.  An amended version of the bill was passed by the House on March 16, 2020 by unanimous consent. On March 18, 2020, the Senate passed the bill and sent it to the President's desk. The President signed the bill into law later that day. Meanwhile Congress is far along in considering a third, and significantly larger, stimulus and relief bill.

The bill as passed increases funding for testing and extends paid sick leave to employees all over the country affected by the pandemic.

The Department of Treasury has released the Paycheck Protection Program application and supplemental information.

Please  check the Department of Treasury web site and review all documents under the of "assistance to Small Business" section.

An application for the Paycheck Protection Program and the associated  Information Sheet for Borrowers can be accessed on these links.

Details of the Economic Impact Payments are available on this link.

Here are some further highlights:

Paid Leave for Employees

The new law requires employers with fewer than 500 employees to provide paid sick leave to employees who are forced to stay home due to quarantining or to care for a family member ("qualified paid sick leave") or to care for a child if the school or place of care is closed ("qualified family leave"). The bill compensates employers and the self-employed for this paid leave in the form of a tax credit.

In the case of sick leave wages paid to an employee, the employer receives a refundable credit against its share of payroll tax. The credit can be claimed on a quarterly basis, equal to 100 percent of the amount of sick leave wages paid under the new law. The amount of the credit is limited to $200 per day. However, the credit is increased to $511 per day if the employee is on leave because he or she:

  • is subject to a federal, state or local quarantine or isolation order related to COVID-19;
  • has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; or
  • is experiencing symptoms of COVID-19 and seeking a medical diagnosis

The amount of total hours of paid sick leave is limited by the new law and the payroll tax credit is limited to 10 days of wages.

For family leave wages paid by an employer, a separate refundable payroll tax credit applies, with different limitations. The 100 percent credit against the employer's share of the payroll tax is limited to $200 per day, up to an aggregate of $10,000.

For self-employed persons, the credit is allowed against regular income taxes. The limit on sick leave wages is determined by multiplying the number of days (subject to limitation) the self-employed person is unable to perform services in the trade or business by the lesser of 67% of the taxpayer's average daily self-employment income, or $200. The limits are increased to 100% and $511, respectively, in the case of the three scenarios that also apply to the employer payroll tax credit. The same calculation is made for family leave wages, with days unable to perform services (no more than 50) multiplied by the lesser of 67% of the taxpayer's average daily self-employment income, or $200.

All of the above provisions are considered temporary, and are subject to revision as the crisis response develops.

TAX RETURN DEADLINE POSTPONED

 IRS and Treasury have delayed the due date for filing 2019 tax returns and payment of tax due and estimated tax payments for 2020 to July 15, 2020. Most states have adopted the federal filing deadline and payment extensions.