Note: This guidance was sent as a client alert on March 26, 2020 and the information is current as of that date.
There have been numerous new developments related to the financial assistance and tax provisions being added to provide relief for the economic strain caused by COVID-19.
This week, the senate passed a historic $2 trillion coronavirus relief stimulus package. However, the package has not yet passed the House of Representatives or been signed by the President. This update will not contain information on the relief bill, but an update will be sent when a final bill is enacted.
Tax Payment and Deadline Deferrals
IRS tax deadline extension details: The new due date of July 15, 2020 applies to 2019 tax year federal income tax returns and respective payments (including self-employment income tax payments) originally due on April 15, 2020. The official guidance released in Notice 2020-18 also notes that “There is no limitation on the amount of the payment that may be postponed.” This effectively eliminates the $1 million (individual/trust/estate) and $10 million (corporation) limits initially set by Notice 2020-17. Additionally, it is notable to mention that the 2nd quarter estimated payment, normally due June 15th, is not included in the notice and therefore has not been delayed.
Illinois Tax Deadline Extension: On March 25th, Governor JB Pritzker announced that the Illinois Department of Revenue would follow the Internal Revenue Service in extending state tax return filings and payments until July 15th
Other state tax deadline extensions: Many states have not announced whether their deadlines will extend to match the updated federal deadline. We will continue to monitor these announcements and plan to file extensions as necessary.
Coronavirus-related paid leave for workers and tax credits for small and midsize businesses: small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. The Treasury Department has released details here: IR-2020-57
Chicago City Taxes: Business-related taxes being deferred until April 30 include those collected for bottled water, checkout bags, amusements, hotel accommodations, restaurants, and parking.
IDOR Waives Penalties and Interest on Late Sales Tax Payment: The Illinois Department of Revenue issued IDOR Informational Bulletin FY 2020-23 announcing the waiver of penalties and interest that would have been imposed on the late sales tax payments from qualified taxpayers (small to mid-sized bars and restaurants).
Emergency Loan Programs for Small Businesses
Chicago Small Business Resiliency Loan Fund ($100M): Recipients must show at least a 25% revenue decline attributable to the pandemic. While strict standards will apply, officials promised the application process will be streamlined. Those interested in receiving information and a loan application are asked to fill out a form at https://www.surveymonkey.com/r/COVID19Chicago.
SBA Approves Illinois’ Application for Economic Injury Disaster Loan: the Small Business Administration has approved the State of Illinois’ request for small business economic injury disaster loans due to COVID-19. Illinois small businesses and private non-profits with substantial economic injury related to COVID-19 can apply for loans of up to $2M. See disaster loan information here. Business owners can apply for a loan with SBA here.
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