Taking Advantage of Tax Relief
The Franchise Tax Board and the Internal Revenue Service have both delayed the tax filing and payment deadline for 2019 income taxes until July 15th, 2020. This delay also applies to the filing deadline of April 15, 2020 for making estimated tax payments. (Note that the second estimated tax payment deadline of June 15, 2020 may still apply, at least at the federal level.)
The IRS is also allowing employers to deduct reimbursements of Covid-19 related employee expenses under section 139. They include work from home expenses, child care expenses and increased transportation expenses. The reimbursements are tax free for employees, and are available even if you are an employee of a personal corporation (S or LLC). They may also be available to partners, but please check with your tax professional. Information is available about this benefit HERE and HERE.
In California, to the extent that employers are granting employees paid leave or are fully or partially shutting down due to governmental orders, they can take payroll tax credits or payroll tax deferments that may be able to be immediately accessed as direct payments. Note that businesses choosing to access this California benefit currently are not eligible for SBA loans, but the landscape is changing rapidly so it’s best to speak to your accountant.
California is also offering small business taxpayers a 12 month interest-free payment plan for up to $50,000 of sales and use tax liability. The payment plan requests can be made through the online services system, but is not yet active.