COVID-19 Employer Playbook

This payment level means that taxpayers making below $99,000 ($198,000 for taxpayers married filing jointly) will generally receive at least some amount of a recovery rebate check. The refund checks are generally not taxable income and are instead treated as an advance of the refund a taxpayer would normally receive when filing their 2020 tax return. This means that in 2021 the taxpayer will have to recalculate the amount of their credit based on their 2020 information. If there is a change in circumstances for the taxpayer where they are phased out based on a 2019 (or 2018) tax return, but would otherwise be entitled to the full credit based on their 2020 tax return, the taxpayer will receive a credit on their 2020 return for the difference. An open issue in this piece of legislation is what happens to those taxpayers who receive a rebate check based on 2019 (or 2018) tax information but would have received a lesser amount based on their 2020 income. The CARES Act does not explicitly require income recognition on any excess credit (which was required in the House’s bill). It is anticipated that future regulations may address this issue. Filing and Payment Extensions The CARES Act permits employers and self-employed individuals to delay payment of the 6.2% employer share of the Social Security tax (but not the 1.45% employer share of the Medicare tax) from the date of enactment through the end of 2020. The unpaid tax would be payable over the following two years, with half paid by December 31, 2021 and the other half by December 31, 2022. This provision would be available to everyone, regardless of income. The CARES Act does not extend the April 15 filing date to July 15, 2020 nor extend the due date for estimated tax payments by individuals and corporations to October 15, 2020, although the Treasury and the IRS extended both the due date for the first quarter (but not, for now, second quarter) estimated tax payments and the April 15 filing date to July 15, 2020 in guidance issued in late March 2020. Above the Line Charitable Contribution Deduction The Act creates a permanent “above the line” charitable contribution deduction for up to $300 of cash contributions to public charities beginning in 2020. This deduction applies even if the individual takes the standard deduction. Public Health Provisions The law supplements community and private health systems to help meet the influx of new COVID-19 patients. This includes: • Hospitals: $100 billion for hospitals to respond to COVID-19 patients. • Community Health Centers: The bill provides $1.32 billion in immediate additional funding for community centers that provide health care services for roughly 28 million people. • Drug Access: $11 billion is allocated for diagnostics, treatments and vaccines. In addition, $80 million is provided to the FDA to prioritize and expedite the approval of new drugs related to COVID-19. • CDC: $4.3 billion is provided to the CDC programs and response efforts • Veterans' Healthcare: $20 billion to care for the needs of veterans through the VA Healthcare system. • Telehealth: Reauthorizes critical telehealth program to extend the reach of virtual medical appointments to meet COVID-19 needs.

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