COVID-19: Summary of Latest Changes for your Business

April 13, 2020 | Brian Baker

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By Brian Baker, CPA

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By Alison Carroll, CPA

With new guidance being issued on what seems like a daily basis, there is a lot to keep up with. Here are some of the most recent updates and changes that may affect you and your business.

Filing Deadlines

Under previously issued guidance, the IRS extended due dates for individual and corporate federal income tax returns, as well as gift tax returns and others, to a due date of July 15th. Amounts owed with these tax returns were also postponed to July 15th. Taxpayers expecting a refund will probably still want to file their returns ASAP. To the contrary, those expecting to owe can still file their tax return now and wait to pay until July 15th to avoid a last minute tax bill.

If more time to file is still needed, taxpayers can file an extension by July 15th, which will extend the return until October 15th. Note that filing an extension does not extend payments on taxes owed, which are still due July 15th.

The most recent update provides postponements of additional acts scheduled to be performed April 1st through July 14th, such as filing petitions with the Tax Court, filing a claim for a credit or refund of any tax, among other time-sensitive acts, including investments in qualified opportunity funds where the re-investment period falls in this time period. All of these acts have been postponed to July 15th. It is important to note that taxpayers with 2016 refund claims, whose three-year statute would end during this period, now have until July 15th to file an amended return to claim a refund or credit.

For taxpayers required to make quarterly federal estimated tax payments, the IRS previously extended the quarter 1 due date to July 15th.  The new guidance extends the quarter two estimated payments to July 15th as well.

Net Operating Losses

The Tax Cuts and Jobs Act of 2017 eliminated the ability for individual and corporate taxpayers to carryback a net operating loss (allowing for a carryforward only). With the passing of the CARES Act, taxpayers can now carryback net operating losses five years, for those losses arising in tax years 2018-2020.

Recently issued guidance now allows taxpayers a limited-time opportunity to claim NOLs for tax years beginning in 2018 and ending no later than June 30, 2019, by filing Form 1045 (individuals) or Form 1139 (corporations) instead of filing amended returns for the carryback years. This will result in taxpayers getting their refunds quicker but this option is only available through June 30, 2020.

Due to the impact of the coronavirus on IRS operations and the anticipated delays in processing forms submitted by mail, the IRS has announced a new fax option for filing refund claims.  The fax will be operational beginning April 17, 2020 and will remain operational until further notice.  Claims submitted by fax will be processed in the order received.

Healthcare Funding

The Department of Health and Human Services has begun delivering relief funding to healthcare providers, which will total $100 billion once fully disbursed. This funding is intended to support health-care related expenses and lost revenue as well as ensure that Americans who are uninsured can get tested and treated for the coronavirus without receiving a bill from the healthcare provider.