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Covid-19 – Summary of Measures United Kingdom
June 13, 2020

Covid-19 - Summary of Measures

USA

USA tax news

1. IR-2020-57, March 20, 2020

a. Paid Sick Leave for Workers

i. For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded paid child care leave when employees' children's schools are closed or child care providers are unavailable.

ii. Employers receive 100% reimbursement for paid leave pursuant to the Families First Coronavirus Response Act.

iii. Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or child care is unavailable in cases where the viability of the business is threatened.

IR-2020-58, March 21, 2020

a. The federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020.

b. Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.

a. IR-2020-59, March 25, 2020

a. The IRS People First Initiative provides immediate relief to help people facing uncertainty over taxes.

i. For taxpayers under an existing Installment Agreement, payments due between April 1 and July 15, 2020 are suspended.

ii. Liens and levies (including any seizures of a personal residence) initiated by field revenue officers will be suspended during this period. However, field revenue officers will continue to pursue high-income non-filers and perform other similar activities where warranted.

iii. New delinquent accounts will not be forwarded by the IRS to private collection agencies to work during this period.

b. IR-2020-61, March 30, 2020

a. Economic Impact Payments: Economic impact payments will be distributed automatically, with no action required for most people. Also known as stimulus payments, the economic impact rebate payments are one component of the Coronavirus Aid, Relief, and Economic Security (CARES) Act to help individuals adversely impacted by the global pandemic.

c. IR-2020-62, March 31, 2020

a. The Treasury Department and the Internal Revenue Service launched the Employee Retention Credit, designed to encourage businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.

d. IR-2020-66, April 9, 2020

a. The Department of Treasury and the Internal Revenue Service extend additional key tax deadlines for individuals and businesses. As a result, the extensions generally now apply to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020. This means that anyone, including Americans who live and work abroad, can now wait until July 15 to file their 2019 federal income tax return and pay any tax due.

e. IR-2020-67, April 9, 2020

a. The Internal Revenue Service issued guidance providing tax relief under the CARES Act for taxpayers with net operating losses.

The CARES Act allows NOLs that arise between 2018 and 2020 to be carried back five years. As pre-2018 tax rates were higher, corporate taxpayers may benefit from usage of carryback losses at more favorable rates.

b. The IRS issued tax relief for partnerships filing amended returns.

Partnerships subject to the new partnership audit rules under IRC Section 6031(b) are prevented from amending Schedules K-1 after the due date of the partnership tax return. The IRS will treat timely filing of Form 1065 as a timely and appropriately filed request for a six-month extension of the deadline to file Form 1065 providing relief from the effect of Section 6031(b).

f. IR-2020-77, April 21, 2020

a. The Treasury Department and the Internal Revenue Service issued guidance that provides relief to individuals and businesses affected by travel disruptions arising from the COVID-19 emergency.

i. Under certain circumstances, up to 60 consecutive calendar days of U.S. presence that are presumed to arise from travel disruptions caused by the COVID-19 emergency will not be counted for purposes of determining U.S. tax residency and for purposes of determining whether an individual qualifies for tax treaty benefits for income from personal services performed in the United States. It is recommended that any nonresident alien found stranded in the US due to COVID-19, and as a result meeting the substantial presence test to be considered a US tax resident for 2020, files a US income tax return and document this position, as the burden of proof will be on the taxpayer.

ii. Qualification for exclusions from gross income under I.R.C. section 911 will not be impacted as a result of days spent away from a foreign country due to the COVID-19 emergency based on certain departure dates.

iii. Certain U.S. business activities conducted by a nonresident alien or foreign corporation will not be counted for up to 60 consecutive calendar days in determining whether the individual or entity is engaged in a U.S. trade or business or has a U.S. permanent establishment, but only if those activities would not have been conducted in the United States but for travel disruptions arising from the COVID-19 emergency.

9. In addition to traditional funding programs the Small Business Administration is offering several new temporary programs, established by the CARES Act, to address the COVID-19 outbreak.

a. Paycheck Protection Program: Provides loan forgiveness for retaining employees.

b. EIDL Loan Advance: This loan advance will provide up to $10,000 of economic relief to businesses that are currently experiencing temporary difficulties.

c. SBA Express Bridge Loans: Enables small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly. d. SBA Debt Relief: The SBA is providing a financial reprieve to small businesses during the COVID-19 pandemic.

If you have any questions regarding this or any of the other initiatives offered to those affected by the current disruption, please contact Alicea Castellanos at alicea@globaltaxes.com.