Covid-19 Tax Update

Back to Business Mississippi Grant 

 www.backtobusinessms.org

 

$40 Million has been set aside SPECIFICALLY for Minority and Women owned businesses.  They will have first consideration in the Grant, even if they obtained a PPP Loan.

If non-minority or women owned, and you received a PPP Loan, you may still apply for the grant, but they will not be considered for the first 21 Days of the Program.

Program ends November 1, 2020 – or when funds are expended.

Maximum Grant amount is $25K

If the eligible business already received the $2,000 that was sent to specific NAICS codes, the grant will be reduced by this amount.  If you received a PPP Loan, EIDL, or business interruption proceeds,  the Grant amount will be reduced by 50% of the amount of those proceeds, or 50% of the grant amount, whichever is smaller.

 

There are 3 basic calculations for the grant:

 

$1,500 – everyone that is a small business (less than 50 employees), in good standing with the Secy of State (if applicable) and filed a 2018 or 2019 return – or if startup has 2020 financials, will receive this no questions asked.  (NON-PROFITS may NOT APPLY for this Grant.)

 

$1,500 PLU $500 per employee – same as above, just have to prove number of employees at March 1, 2020. 

 

Actual expenses for Rent, Utilities, Payroll, (2 months max) PLUS Sanitation costs, PPE’s,  - same as above, PLUS you have to provide actual receipts/proof of payments for the expenses.

 

IN addition, you have to provide an explanation of the reason of business interruption.  This could be non-essential business forced to close by the State, County, City, etc.,  It could be that due to “Shelter in Place” orders clients/customers were unable to come to your business.  This is a key part of the application, so you need to answer this in detail.

 

Here is a link to the FAQ’s

https://backtobusiness.mississippi.org/files/BackToBusinessMs_FAQ.pdf

 

Paycheck Protection Flexibility Act

Senate Approval Sends the Paycheck Protection Flexibility Act to President Donald Trump, who is expected to sign it. 

Following is a summary of the legislation’s main points compiled by the AICPA: 

• PPP borrowers can choose to extend the eight-week period to 24 weeks, or they can keep the original eight-week period. This flexibility is designed to make it easier for more borrowers to reach full, or almost full, forgiveness.
• The payroll expenditure requirement drops to 60% from 75%.but is now a cliff, meaning that borrowers must spend at least 60% on payroll or none of the loan will be forgiven. Currently, a borrower is required to reduce the amount eligible for forgiveness if less than 75% of eligible funds are used for payroll costs, but forgiveness isn’t eliminated if the 75% threshold isn’t met.
• Borrowers can use the 24-week period to restore their workforce levels and wages to the pre-pandemic levels required for full forgiveness. This must be done by Dec. 31, a change from the previous deadline of June 30.
• The legislation includes two new exceptions allowing borrowers to achieve full PPP loan forgiveness even if they don’t fully restore their workforce. Previous guidance already allowed borrowers to exclude from those calculations employees who turned down good faith offers to be rehired at the same hours and wages as before the pandemic. The new bill allows borrowers to adjust because they could not find qualified employees or were unable to restore business operations to Feb. 15, 2020, levels due to COVID-19 related operating restrictions.
• Borrowers now have five years to repay the loan instead of two. The interest rate remains at 1%.
• The bill allows businesses that took a PPP loan to also delay payment of their payroll taxes, which was prohibited under the CARES Act.

 

Back to Business

Gov. Reeves announced last week that small business owners will soon be able to apply for the "Back to Business Mississippi Grant Program." The application website is https://www.backtobusinessms.org/.  It is not accepting applications yet - but will soon. You can sign up on the website for email notifications.

Highlights:

*Must be a for-profit corporation, limited liability company, a partnership or a sole proprietorship

*Was domestic as of March 1, 2020

*Is in good standing with the Mississippi Secretary of State, if applicable

*Suffered an interruption of business

*Filed Mississippi taxes for tax year 2018 or 2019, or, for an eligible business formed on or after January 1, 2020, intends to file Mississippi taxes for tax year 2020, unless exempt under Section 27-7-29, Section 27-13-63 or other applicable provision of law

*Has customers or employees coming to its physical premises, conducts business on customer premises, or has an owner who is an active participant in the day-to-day operations of the business

*Had no more than 50 full-time equivalent (FTE) employees as of March 1, 2020

*Does not have to be repaid.

*You may apply if you received SBA loan money, however, these applications will not be considered for the first 21 days of the program.

 

REVISED MISSISSIPPI FILING DEADLINE!!!  NOW JULY 15^TH TO COINCIDE WITH FEDERAL DEADLINE!

 

 

After consultation with the Governor, Lieutenant Governor and Speaker of the House of Representatives, Mississippi has extended the due date for filing income tax returns and making first quarter and second quarter estimated payments to July 15, 2020.  This extension applies to Individual Income Tax returns, Corporate Income and Franchise Tax returns, and Fiduciary Income Tax returns.

PPP Loan Forgiveness

Navigating Payroll Protection Plan Loan Forgiveness can be complicated.  You must document that you spent the loan proceeds on allowable expenditures such salaries and wages, employer provided health insurance, employer retirement contributions, mortgage interest payments, rent under a lease agreement or utilities.

All loan proceeds must be spent in the 8 week period beginning the day the loan is funded.

To qualify for full forgiveness, 75% of the funds must be spent for payroll costs.

Another condition of full loan forgiveness is that you must maintain the same amount of Full-time equivalent employees.

Documentation of these expenditures is critical to obtain loan forgiveness.  If you need assistance, please contact our office at 662-429-4436.

Mississippi Filing Deadline is May 15, 2020

 

Extensions  If a taxpayer is unable to file the return by May 15, 2020, and expects to OWE a balance of tax, then the taxpayer should file for an extension. The only method to file for a Mississippi extension is to file Form 80-106 Payment Voucher by marking the “EXTENSION PAYMENT” box and submitting the estimated amount of tax due. 

 

If a taxpayer DOES NOT EXPECT TO OWE a balance of tax due on the filing of the return, then the taxpayer does not have to take an action. Please do not send a federal extension form to the Department of Revenue. However, MDOR will recognize any federal extension filed with the Internal Revenue Service on May 15, 2020. 

If a taxpayer files for an extension of time to file the return, the return will be due on October 15, 2020. An extension of time to file is not an extension of time to pay the tax due. A balance of tax due after May 15, 2020 is potentially subject to late payment penalty of 1/2 of 1% per month not to exceed 25% and late payment interest of 1/2 of 1 % per month. A return not submitted by October 15 is potentially subject to late file penalty of 5% per month not to exceed 25%.

 

Contributions to IRA, HSA and MPACT contributions can be made up to the extended federal 7/15 deadline for the 2019 tax year for Mississippi purposes.

economic impact payment

Check IRS.gov for the latest information: No action needed by most people at this time

IR-2020-61, March 30, 2020

WASHINGTON — The Treasury Department and the Internal Revenue Service today announced that distribution of economic impact payments will begin in the next three weeks and will be distributed automatically, with no action required for most people. However, some taxpayers who typically do not file returns will need to submit a simple tax return to receive the economic impact payment.

Who is eligible for the economic impact payment?

Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible. Social Security recipients and railroad retirees who are otherwise not required to file a tax return are also eligible and will not be required to file a return. 

Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child.

How will the IRS know where to send my payment?

The vast majority of people do not need to take any action. The IRS will calculate and automatically send the economic impact payment to those eligible.

For people who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. The economic impact payment will be deposited directly into the same banking account reflected on the return filed.

The IRS does not have my direct deposit information. What can I do?

In the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail.

I am not typically required to file a tax return. Can I still receive my payment?

Yes. The IRS will use the information on the Form SSA-1099 or Form RRB-1099 to generate Economic Impact Payments to recipients of benefits reflected in the Form SSA-1099 or Form RRB-1099 who are not required to file a tax return and did not file a return for 2018 or 2019. This includes senior citizens, Social Security recipients and railroad retirees who are not otherwise required to file a tax return.

Since the IRS would not have information regarding any dependents for these people, each person would receive $1,200 per person, without the additional amount for any dependents at this time.

I have a tax filing obligation but have not filed my tax return for 2018 or 2019. Can I still receive an economic impact payment?

Yes. The IRS urges anyone with a tax filing obligation who has not yet filed a tax return for 2018 or 2019 to file as soon as they can to receive an economic impact payment. Taxpayers should include direct deposit banking information on the return.

I need to file a tax return. How long are the economic impact payments available?

For those concerned about visiting a tax professional or local community organization in person to get help with a tax return, these economic impact payments will be available throughout the rest of 2020.

Where can I get more information?

The IRS will post all key information on IRS.gov/coronavirus as soon as it becomes available.

The IRS has a reduced staff in many of its offices but remains committed to helping eligible individuals receive their payments expeditiously. Check for updated information on IRS.gov/coronavirus rather than calling IRS assistors who are helping process 2019 returns.

 

 

UPDATE on MDES and UNEMPLOYMENT Filing

Please read! If you are a Mississippi resident/employee/self-employed individual and have been laid off or suffered work loss due to COVID-19, you qualify for unemployment benefits. In addition to the MS unemployment benefit of $235 (max amount), the Federal Government is adding $600 to the benefit amount for a period of 4 months.

Based on the Federal law passed Friday morning and Governor Reeves Memorandum of Understanding executed last week, unemployment benefits will see an expansion in Mississippi of covered individuals (to include many self- employed, part time employees and workers who do not have enough credits to qualify). The guidance for filing is still the same, but alternative options have been added with a PDF fillable form (link at the bottom of this post). Call centers will be expanded from 7am to 10pm (7 days a week) beginning on Monday to help process claims and issues.

Much of the changes will be directed by the United States Department of Labor. The Department of Labor will give guidance to our Department of Employment Security in the coming days on eligibility and computation of benefits. The key now is that if you qualify for benefits, that you file and that the benefits for eligible claims will be back dated to your date of separation even if the application process is delayed.

Ways to File your Unemployment Claim:

• File online during off peak hours (10pm-5am) Available 7 days a week, 24 hours a day mdes.ms.gov
• Call Center # 888-844-3577 (7am-10pm), 7 days a week (beginning Monday 3/30/20)
• Downloadable Form:  https://mdes.ms.gov/media/178819/ui-501_form_web.pdf Once you have completed the form, please email it to: UIClaims@mdes.ms.gov or to your local WIN Job Center
• DeSoto County Job Center
  DeSotocountyjobcenter@mdes.ms.gov
  662-280-6218
   

 

COVID-19 Individual Stimulus Payments

The basic payment will be $1,200 for each adult ($2,400 for a couple filing jointly and $500 per dependent child.  It will be delivered by the US Treasury Department either through direct deposit to your bank or a check mailed to your home.  It is anticipated that these funds will be received in the next months.

Most payments will be based on the Adjusted Gross Income (AGI) of your 2019 tax return, or 2018 return if you have not yet filed 2019.  Payments begin to phase out for singles with AGI of $75,000, couples filing jointly with AGI of $150,000, and heads of household filers with AGI of $112,500. Recipients must have a Social Security number. 

Social Security recipients who do not file an income tax return would be eligible.

Ineligible for payments include 17 or 18 year old children, college students age 19 – 23, adults who can be claimed as a dependent, and nonresident aliens.

Check the website below for updates.

https://www.irs.gov/coronavirus

COVID-19 Tax Return Dates

Federal Individual Income Tax returns, originally due on April 15, 2020, are now due on July 15, 2020.

If you have already filed your return, you do not have to send in your payment to the IRS until July 15, 2020. 

If you are required to make Estimated Tax Payments, your 1^st Quarter Federal Estimate will be due on July 15^th.  Your 2^nd quarter estimated tax payment will still be due on June 15^th.

 

Mississippi Individual Income Tax returns, originally due on April 15, 2020, are now due on May 15, 2020.

If you have already filed your return, you do not have to send in your payment to the MS Department of Revenue until May 15,  2020.  If you are required to make Estimated Tax Payments, your 1^st Quarter Mississippi Estimate will be due on May 15^th.  Your 2^nd quarter estimated tax payment will be due on June 15^th.

 

Individual Retirement Account (IRA) Contributions may be made up to July 15.