Please note that all of these programs are brand new and the rules, qualifications, and guidance are constantly changing. Please see an update to this article in the bold text below.
UPDATE: the IRS published additional taxpayer relief on March 25th which contradicts parts of the below information. Click here for more updates on these matters.
COVID-19 2019 Income Tax Deadline Extension
Both the IRS and the Georgia Department of Revenue have moved their 2019 income tax return filing and payment deadlines from April 15th to July 15th. This extension also applies to 2020 first-quarter estimated taxes, which were originally due in April. If you intended to pay your 2019 taxes by the original deadline, this is good news, as you now have a 90-day interest-free “loan” on those funds.
If you are unable to pay your 2019 income taxes due to the crisis, please contact us, and we can discuss the best way to handle this issue with you.
The payment extension relief does not apply to installment agreements or other payments you owe the IRS.
While the IRS has not announced any type of forbearance for prior-year tax liabilities, the good news is that you always have the right to renegotiate with the IRS, and it is highly likely that your new agreement will be better than your last one.
We can negotiate with the IRS based on your current ability to repay them. This means, for example, if your income has decreased by 50%, your monthly payment could be reduced by up to 50%.
In most cases, we are also able to delay the start of the new agreement for six months. For instance, if you were in an installment agreement for $1,000/month, this means you would potentially preserve $1,000/month of cash flow for six months.
If you are in financial distress and cannot pay the IRS for prior tax years (installment agreement or otherwise), please contact us to discuss your options.
If you were laid off and are on, or applying for, unemployment benefits, it is highly likely that you will qualify for “Currently Not Collectible Status.” This status is a resolution the IRS offers where you are not required to pay anything until your financial situation improves.
The Small Business Administration (“SBA”) and the City of Atlanta have loan programs for small businesses that are experiencing financial distress due to the COVID-19 crisis. We have included information on each program below. Please contact us if you need any assistance with these loans. We are providing consulting services to businesses who need help obtaining these loans or who need to maximize a loan’s potential benefits.
The Senate is currently negotiating a Stimulus Bill that will significantly expand the benefits of this SBA Loan outlined below.
- As proposed, the Bill allocates $350 billion for SBA loans designed to help small businesses (fewer than 500 employees) impacted by the crisis.
- The Bill allows small businesses to take out loans to cover payroll for employees and provides tax-free loan forgiveness for payroll for employees making up to $100,000. Employers can potentially avoid laying off employees if they obtain this loan, since the loan could be forgiven at no cost to the employer.
- To be eligible for the loan, the employer must maintain an average monthly number of employees during the covered period (March 1st to June 30th) that is no less than the number it had before the crisis began. The Bill allows employers who have laid off employees to potentially qualify for forgiveness if they rehire those employees by April 1st, 2020.
- We will send out a separate e-mail once the Stimulus Bill has been passed.
Previously announced SBA Disaster Loan program:
- Loans up to $2 million with a 3.75% fixed rate for 30 years
- Loans may be used to pay fixed debts, cover payroll, address accounts payable and other bills incurred during the crisis
- More information on the SBA’s Disaster Assistance Program here
- Apply directly with the SBA here
City of Atlanta Loan Program
InvestAtlanta Business Continuity Loan Fund (“BCLF”) is currently offering favorable loans for businesses in the city of Atlanta.
Loans range from $5,000 to $30,000 per applicant and will be based on the economic injury and the business’s financial needs. Loans are 0% interest with a 6- to 12-month deferment before the first payment is due.
Who is a qualified applicant for the BCLF?
The BCLF program is for businesses operating within the Atlanta city limits. To be a qualified
applicant for the BCLF, businesses must:
- Be an existing for-profit corporation, partnership, sole proprietorship, or non-profit with for-profit activities in the city of Atlanta that contributes to trade
- Be current on all financial obligations related to the lease or mortgage agreement for the business
- Have 50 or fewer full-time employees, i.e., employees working at least 30 hours per week or 130 hours per month
- Have been in operations for one year
- Have a current city of Atlanta business license
- Be current on all city of Atlanta taxes and fees
You can find more information on BCLF loans and apply here.
Have Questions? Call the Experienced Tax Attorneys at Wiggam & Geer
For assistance managing your tax needs during the coronavirus outbreak or any other time, don’t hesitate to contact the legal tax professionals at Wiggam and Geer.