Benefit: Tax Payment Delay
Who is eligible: Companies of all sizes and individuals can delay filing their 2019 tax returns, paying any outstanding tax liability and submitting estimated taxes for the first quarter of 2020 until July 15.
How to get it: No action is needed for the extended due date for income taxes. The IRS also allows companies to delay filing their taxes until October 15, but that requires a form requesting an extension with the agency. Tax bills that aren’t paid by July 15 will start accruing interest and penalties, even for companies approved to file the return in October.
Benefit: Payroll Tax Deferral
Who is eligible: Corporations can also put off paying the employer-side payroll taxes they owe for up to two years. One exception: companies that get their Payroll Protection Program loans forgiven can’t defer their payroll taxes.
How to get it: Companies can defer paying all of the 6.2% payroll levies they owe the government for the rest of 2020 and can spread those payments out over 2021 and 2022. At least half must be submitted by the end of 2021.
Benefit: Employee retention tax credit
Who is eligible: Companies of all sizes and non-profits forced to close or slow business could be eligible for a refundable tax credit if they keep workers on the job. Firms that get Payroll Protection Program loans can’t claim this tax break either. Companies with more than 100 employees can only claim the tax credit against wages paid to employees with work curtailed by the pandemic.
How to get it: Employers can get up to $5,000 per worker they keep on the job during the downturn. The credit is applied against payroll taxes, submitted quarterly, but companies can also ask for an advance using these instructions and form from the IRS. The tax break is refundable, meaning businesses can get a check back from the IRS if companies have amassed credits larger than their payroll tax bills.
Benefit: Tax credit for paid sick and family leave
Who is eligible: Employers with fewer than 500 employees can receive dollar-for-dollar tax credits that reimburse them for providing paid sick and family leave wages for workers who have to take leave related to the virus. Self-employed individuals are also able to claim a similar credit. One important caveat: Paid sick and family leave reimbursed by the tax credit is excluded from the payroll costs that can be claimed as part of the Payroll Protection Program.
How to get it: Employers that offer workers up to 80 hours of paid sick leave and up to an additional 10 weeks to care for a child due to school closures can claim the credit for wages paid starting April 1. Companies can claim the tax breaks on their quarterly federal employment tax returns, but they can benefit more quickly from the credits by reducing their employment tax deposits. If the credit amount is larger than the federal employment taxes, companies can may request an advance payment of the credits from the IRS.