Help for you: Individuals and Businesses
DS+B has updates here about individual or business impacts due to the COVID-19 pandemic. Learn about your tax, audit and advisory needs as well as actions you can take proactively. Please contact your CPA directly for urgent concerns or questions. We are here to help.
April 7, 2020 — Identify Your Financial Blind Spots
Whether or not you have applied for federal and state aid yet to sustain you through this challenging economic period, a severe downturn in consumer spending impacts every business.
We have encouraged our clients to apply for a federal Paycheck Protection Program loan. But once the application is filed, there are other things you can do to stay focused and identify any financial or other blind spots.
With your employees:
Check in with them. Are they and their families doing all right? Do they need anything? If they are unable to leave their homes, do they have a means of getting supplies? How can you, as an employer and concerned person, help?
With your customers:
Check in with them. Are they struggling in any way? Are they experiencing cash flow or supply chain concerns? Are there ways that you can ease their burden in the short-term to sustain them for the future?
With your suppliers:
Check in with them. Are any dealing with quarantine or their own supply chain issues? Do they have cash flow concerns? Are there ways that you can work together to sustain each other?
By reaching out and asking for ways that you can help, you will strengthen these critical relationships while also locating any weaknesses in your business structure. Also, if you are unsure of whether or not to apply for state or federal emergency loans, or which ones are right for your business, DS+B can help.
MARCH 31, 2020 — SBA Emergency Grants Through EIDL Program
In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan (EIDL) advance of up to $10,000.
This advance, available directly through the U.S. Small Business Administration until December 31, 2020, is meant to provide fast economic relief to small businesses of not more than 500 people, including sole proprietors and independent contractors, non-farm agricultural cooperatives and non-governmental nonprofits that are currently experiencing a temporary loss of revenue due to the pandemic.
Funds can be used to cover:
- Paid sick leave to employees unable to work due to the direct effect of COVID-19;
- Maintaining payroll to retain employees during business disruptions or substantial slowdowns;
- Increased costs to obtain materials unavailable from the applicant’s original source due to interrupted supply chains;
- Making rent or mortgage payments, and
- Repaying debt obligations that cannot be met due to revenue losses.
An online application determines whether the applicant is eligible for a loan under the SBA’s Economic Injury Disaster Loan Program for entities impacted by COVID-19.
According to the SBA website, the application process takes approximately two hours, and funds will be made available within three days of a successful application.
Regardless of whether or not the applicant qualifies for an EIDL loan under section 7(b)(2) of the Small Business Act, this loan advance will not have to be repaid. If the applicant moves forward with an EIDL loan under Section 7(a), the advance would be deducted from any loan forgiveness amount in the future.
For more information or to apply, visit the SBA’s EIDL application page:
MARCH 30, 2020 — CARES Act Provisions
President Trump signed the much-anticipated U.S. $2 trillion emergency economic stimulus package on Friday, March 27, 2020. It is known as the Coronavirus, Aid, Relief, and Economic Security Act (CARES Act), H.R. 748. The full text of the law is available in the Resources section on this page.
Our team is going to be monitoring all IRS pronouncements and clarifications as they relate to this important legislation. We will be updating our website when additional information is received.
Read our Coronavirus economic stimulus package blog post for more details.
MARCH 26, 2020 — COVID-19 UPDATE
Accounting and Tax Services Deemed a Critical Industry
On March 25, Minnesota Governor Tim Walz issued a two-week stay at home order. He identified those industries which are deemed critical. This list included accounting, tax preparation, bookkeeping and payroll services. At DS+B, we had already implemented the ability for our staff to work from home while continuing to serve our clients. We are accepting tax packets by mail and through our online portal. We expect to continue uninterrupted service for our clients.
MARCH 24, 2020 — COVID-19 UPDATE
In this update, read about Minnesota tax filing extensions, payroll tax credits, quarterly financial statement reporting, health care coverage for COVID-19 testing and treatment and budgeting guidance.
Minnesota Tax Filing Extended to July 15, 2020
On March 23, 2020, the Minnesota Department of Revenue has extended federal and state tax filing deadlines from April 15, 2020 to July 15, 2020, following approval by the Internal Revenue Service. Note: This grace period does not apply to Minnesota state estimated tax payments for individual income taxes due April 15, 2020, for the 2020 tax year. The April 15, 2020 due date for Minnesota corporate franchise tax payments, partnership, fiduciary, or S-corporation income estimated tax payments also remains the same. Read more in our blog post.
For updates about state tax filing for other states, find your state tax agency at https://www.taxadmin.org/state-tax-agencies.
Gov. Walz Signs Executive Order for DEED Forgivable Loan Program
By executive order on March 23, 2020, Gov. Tim Walz has directed the Minnesota Department of Employment and Economic Development (DEED) to develop a forgivable loan program, awarding grants to nonprofit corporations to fund forgivable loans to small businesses regardless of the business or entity structure.
Called the Small Business Emergency Loan Program, it would provide zero-interest forgivable loans of $2,500 to $35,000 at the discretion of the DEED Commissioner to address financial impacts of COVID-19 on small businesses in the state. Restrictions apply, but up to 50% of the loan may be forgiven two years after loan disbursement if the business is operating at similar levels at that time.
To read the full executive order, go here.
Payroll Tax Credits Available to Cover Paid Leave
Following the passage of the U.S. Families First Coronavirus Response Act, the IRS has issued a press release providing details about refundable payroll tax credits for small and midsize employers impacted by COVID-19.
Employers with 500 or fewer employees can receive a dollar-for-dollar tax offset against payroll taxes for covering expanded paid employee leave rules.
Eligible employers receive 100% reimbursement, including:
- Applicable health insurance costs
- No payroll tax liability
- Self-employment equivalent credits
The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all covered employees. Note that employers with fewer than 50 employees are eligible for certain exemptions from the paid leave requirements.
If there are not sufficient payroll taxes to cover the cost of qualified sick and child care paid leave, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less.
View the IRS press release for more details.
Plan Ahead For Financial Statement Reporting
The AICPA’s Center for Plain English Accounting just released a report that is free to the public regarding financial reporting matters impacted by COVID-19. The report is designed for practitioners to evaluate whether or not consequences of the pandemic represent “subsequent events” as well as recording certain asset impairments or losses as part of financial reporting. You can download the report here.
High-Deductible Health Plan Coverage
The Internal Revenue Service has advised that high-deductible health plans (HDHPs) can pay for 2019 COVID-19 related testing and treatment without jeopardizing their status. This means that they can cover the cost of testing for or treatment of COVID-19 before plan deductibles have been met. The notice only applies to HSA-eligible HDHPs.
Food for Thought on Budgeting
With 2020 forecasting all but impossible, here are some tips to weather the current uncertainty in your budget. Keep in mind:
- Forecasting is for decision-making; forecast only as far as you can with certainty
- Approve new projects or activities based on time horizons and existing cash flow
- Give teams permission to revise timelines and budgets as more information becomes available
- Don’t shoot the messenger; maintain a healthy culture for those reporting to you.
For more guidance on revised budgeting or financial forecasts, touch base with your DS+B professional, and visit https://www.dsb-cpa.com/expertise/business-owners-entrepreneurs/
MARCH 19, 2020 — COVID-19 UPDATE
Over the past few days, your team at DS+B has mobilized to continue serving you, and we are still accepting tax packets by mail as well as through our online portal. You can still call your CPA directly. Our cell phones connect directly to office lines, whether team members are working remotely or optionally in the office. We are here for you and expect to continue our service uninterrupted.
Now, here are some important updates today for individual, business tax or audit and advisory services as you navigate the impact of COVID-19. Check back to our website and social media channels for these daily updates. As always, you can contact us for assistance.
Tax Filing and Federal Payment Extension
Please note that the IRS and state tax authorities still require tax filing by the Wednesday, April 15 deadline. The recent 90-day extension to July 15, 2020, refers to individual federal tax payments owed after filing, up to $1 million in 2019 taxes owed. As of this writing, there is no change to state tax payment deadlines in Minnesota, and we are monitoring other state tax news for our clients who operate in multiple states. For C Corporations, income tax payment deadlines are being automatically extended until July 15, 2020, for up to $10 million of their 2019 tax due. This relief also includes estimated tax payments for tax year 2020 that are due on April 15, 2020. If you need an extension of time to file your taxes, DS+B can advise you or you can visit the IRS.gov site. Individual taxpayers can request a filing extension by electronically filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses must file Form 7004.
For updates about state tax filing for your state, find your state tax agency at https://www.taxadmin.org/state-tax-agencies.
Business Interruption Insurance
We recently published a blog post about how your CPA can help you with business interruption insurance claims. We advise you to contact your insurance provider as soon as possible if you anticipate a business interruption in connection with COVID-19. See our blog post.
Managing Employees and Staffing
We are recommending that business owners who are impacted by partial or complete shutdown of operations to potentially continue to employ FTE employees at least 10-15 hours a week. This arrangement will supplement state emergency unemployment benefits for partially furloughed employees and support retention of your talent. Please contact us with questions or contact your state employment and economic agency about how to manage staffing on a limited scale if your business is partially or completely shut down.
Emergency Business Financing
If you are a business owner experiencing a partial or complete closure now or in the coming weeks, the Small Business Administration is offering emergency financing relief. More information is available at this link.
Paid Emergency FMLA Leave Legislation
The U.S. Senate passed legislation put forward by the U.S. House of Representatives and signed by President Trump that will require certain employers to provide paid emergency FMLA leave and paid sick time. Specific provisions relevant to covered employers include:
- Companies with 500 and fewer employees are covered by the bill.
- Employers with fewer than 50 workers could apply for an exemption from providing paid family and medical leave and paid sick leave if it “would jeopardize the viability of the business.”
- Employers may exclude employees who are health care providers or emergency responders from both sets of benefits.
- The law takes effect approximately April 2, 2020, and would sunset on December 31, 2020.
The Families First Coronavirus Response Act includes refundable tax credits for employers that are impacted. In addition, the Department of Treasury is reported to be exploring means within its administrative powers to allow small businesses the liquidity and cash flow they need to maintain operations.
We will continue to update you on this legislation and how to respond.
For continued updates on COVID-19 impacts from the IRS, you can also go to:
We hope you and your staff and loved ones remain safe and healthy. We are ready to help with any questions or concerns. Again, watch for daily updates here on our website.