COVID-19 Weekly Digest - July 15, 2020
First, it was toilet paper and hand sanitizer. Now, we have a nationwide shortage of coins. Though some have blamed the coin shortage on a conspiracy, the shortage is due to the pandemic. Because of the shutdown, people have been spending less overall, which has reduced the circulation of currency and coins through the economy. In addition, due to social distancing requirements, the U.S. Mint had to decrease the production of coins during April and May. In June, the Federal Reserve began limiting the number of coins that banks could receive. Some stores, such as Wawa and Kroger, have stopped giving out coins as change.
Maybe it’s time to check the couch cushions or empty that jar where you’ve been saving all your change. In the meantime, here are some resources to help you keep up with the rapid-fire changes we’re all experiencing.
CARES ACT UPDATES
Second Stimulus?
Although the House and Senate will not return to work until July 20, there are plenty of rumors circulating about a possible second stimulus, which may be finalized this month. Payments may be less than the initial $1,200 per person, and recipients may be further limited by income or those who have lost their jobs. To encourage workers to return to work, instead of the current $600 per week boost to unemployment, a return to work bonus is also under discussion.
Economic Impact Payments (aka Stimulus Checks)
The IRS continues to add new updates to its FAQs on economic impact payments. According to the latest updates, the IRS and the Bureau of Fiscal Services is in the process of canceling the checks that were inadvertently sent to deceased persons. Also, many people who need to file a tax return used the Non-Filers tool to enter their banking information to receive a stimulus payment. However, using that tool means they cannot file a 2019 tax return electronically and will have to file by paper. See below, under Tax Issues for more details about what to do.
Paycheck Protection Program (PPP)
On July 6, the SBA released data on the Paycheck Protection Program. This data release included names of recipients categorized by ranges of loan amounts. However, the analysis of the data indicates that the data is full of errors. For example, the maximum loan amount for a one-person enterprise is $20,833, but according to the news release, more than 75,000 solo businesses report higher amounts and 154 show a receipt of more than $1 million. Some people who are listed as having received a PPP loan did not actually receive one.
As a reminder, this program was extended until August 8.
Navigating the constantly changing rules and guidance has been challenging. Alan Gassman put together a summary of the most up-to-date guidance in this article in Forbes. His article also includes links to free videos that demonstrate how forgiveness works.
Employee Retention Credit
The Employee Retention Credit provides a refundable tax credit of up to 50% of $10,000 in wages paid to an employee by businesses that have been impacted by the pandemic. More information can be found on the IRS FAQ page for this program.
TAX ISSUES AND IRS NEWS
As a reminder, the regular tax filing deadline of April 15 was extended to July 15. The IRS advises that even if taxpayers can’t pay their taxes in full, they should still file a return. A new Fact Sheet from the IRS has options for taxpayers to pay their taxes. If you make a payment by check, you should include the year that the payment is intended for on the memo line. For taxpayers who cannot pay in full, the IRS has several options, including an Online Payment Agreement for individuals who owe less than $50,000 or businesses that owe less than $25,000 in payroll taxes.
Amended EIP Returns
In the rush to get banking information to the IRS for stimulus payments, many taxpayers entered their banking information in the Non-Filers: Enter Payment Info Here tool. This tool was intended for use only by taxpayers who are not required to file a tax return. The information entered using that tool is considered an Economic Impact Payment (EIP) tax return and counts as an electronically filed 2019 tax return. To file an actual 2019 tax return, the EIP return will have to be amended. According to the IRS instructions for an Amended EIP Return, this will have to be filed on paper by July 15, and should have the words “Amended EIP Return” written at the top of the first page of Form 1040 or Form 1040-SR.
Plan ahead for 2020 taxes if you’re receiving unemployment
Many recipients of unemployment benefits do not realize that the IRS considers those benefits taxable income until they file their tax returns. Federal and state income tax withholding is generally done voluntarily, and state unemployment offices are inconsistent about offering that as an option when benefits start. Federal withholding can be set up using Form W-4V.
LIVING WITH AND AFTER THE PANDEMIC
Going back to work
Some jobs can’t be done remotely, while others can be done from home. Deciding who needs to come back, and who can stay home may mean redefining the notion of workplace fairness. The traditional approach to fairness means treating everyone the same. However, in the COVID-19 era, treating employees fairly means offering flexibility and options so that each person can do what’s best for their circumstances.
Returning to the office after several months of remote work gives organizations an opportunity to re-think work schedules by considering four key questions. By considering how scheduling impacts employees, employers can help ensure their long-term well-being while making sure the work of the enterprise must still get done.
How does my organization’s scheduling practices affect employee effectiveness and well-being?
Can we better align our work schedules with the needs, desires, and personalities of our employees?
What are the implications of creating customized schedules or giving employees more control over their schedules?
Can we effectively balance the needs and desires of both the organization and employees?
Coming back to work may mean coming in close contact with people whose approach to the pandemic may be quite different than your own. Some are ultra-cautious, others are not. A middle ground may be hard to achieve, but this article shares ways to take steps in that direction. Treating each other with respect, and understanding can go a long way.
