The U.S. House of Representatives has passed H.R. 6201 – Families First Coronavirus Response Act (HR6201) to provide relief to those affected by the outbreak. This bill addresses critical and vulnerable areas that may directly affect work and life, while also identifying several additional important tax proposals. The bill still needs to be passed by the Senate and signed by the President to become official law.

We’ve outlined key business and tax areas of the bill below.

For employers with less than 500 employees:

  • The bill provides two weeks of paid sick leave for those who become infected with the coronavirus or need to care for their out-of-school children, sick relatives or to comply with their own quarantine due to coronavirus.
  • It provides employees the right to take up to three months of leave from their jobs if they need to quarantine themselves or care for a family member who is quarantined or for a child whose school has been closed.
  • Employers must pay two-thirds of the employees’ pay and two weeks of paid sick leave is also mandated for those forced into quarantine.
  • Employers and self-employed individuals can take a refundable credit of up to 100% of the paid sick or family leave wages for this purpose.

Small businesses with fewer than 50 employees are exempt from the sick pay and family medical leave provisions.

Surprisingly, HR6201 doesn’t list anything related to extending the tax deadline, as has been hinted by several sources. The Ohio Society of CPAs has asked the State of Ohio to extend income tax filing and payment deadlines in response to the pandemic. On their own, the U.S. Treasury and the IRS have the authority to extend the filing and payment deadlines, but whether that will happen is still unknown.

The American Institute of Certified Public Accountants (AICPA) requested a filing extension until October 15, 2020, for both individual and business income tax returns. Additionally, relief from penalties and interest through October 15, 2020, was also requested by the AICPA. Individuals would need to have 70% of their current tax due paid in by April 15, 2020.

The idea behind the proposed extension is to provide economic relief to individuals and businesses that are feeling the economic impact of the coronavirus. Treasury Secretary Steven Mnuchin recently commented this relief will help mitigate the crisis and provide billions of dollars of immediate liquidity to the markets. Only time will tell whether the deadlines will be delayed.

We continue to monitor the guidance and will keep you posted as they develop. Contact your BMF tax advisor or any member of your team if you have questions on the impact of coronavirus or HR6201 on you or your business.

You can read the full text of the House bill here.

 

Visit our COVID-19 Resource Center for the latest updates and resources for you and your business.

About the Authors

John E. Jenkins
CPA
Partner, Taxation Services
Michael Hydell
CPA, MTax
Senior Manager, Taxation Services

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