Businesses affected by COVID-19 may qualify for tax relief though credits or deferrals.
The following is a breakout of the new tax credits and deferral of employment tax deposits and payments available through the end of 2020.
- 1. Credits for paid sick and family leave
- Businesses as well as tax-exempt organizations that have less than 500 employees and provide one or both of the types of leave (paid sick or FMLA) provided by the Families First Corona Response Act (FFCRA) can claim refundable credits.
- 2. Employee Retention Credit
- This credit is available to any size employer, including tax-exempt organizations. Eligible employers are defined as those who operate a trade or business and experienced one of these:
- Full or partially suspended operations because of COVID-19; or
- A significant decline in gross receipts in a calendar quarter when compared to 2019.
- 3. Deferral of employment tax deposits and payments
- Employers may also defer the deposit and payment of their share of Social Security taxes. 50% of the deferred taxes are due by December 31, 2020 and the remaining 50% is due by March 31, 2021. Note however, employers who receive a Paycheck Protection Program (PPP) loan cannot defer their share of Social Security tax due after the lender forgives their loan.
Further tax relief information can be found on the following link: https://go.usa.gov/xwZye.