Coronavirus Aid, Relief, and Economic Security act (CARES Act)

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CARES Act Relief for Individuals
Direct Payments by Government	Single and joint filers receive $1,200 and $2,400 respectively plus $500 per qualifying child based on most recently filed return.
Direct Payments by Government – Phaseouts based on adjusted gross income amounts from most recently filed return	Reduced by 5% of the amount by the taxpayer’s adjusted gross income exceeds the following:  Single – $75,000, Married Filing Joint – $150,000, Head of Household – $112,500
How to receive direct payments	If designated a bank account for refunds previously with IRS, will use that account.  Otherwise check in the mail.
Retirement funds early withdrawal penalty	Waived the 10% penalty for Coronavirus-related distributions.
Required minimum distributions	Waived for 2020
Charitable Contributions as an Above-The-Line-Deduction	Individuals, whether they itemize or not, can take a $300 deduction.
Repayment of Student Loan Debt	Excluded student loan debt paid by the employer as income.
CARES Act Relief for Businesses
Employee Retention Credit	The CARES Act provides eligible employers a credit against applicable employment taxes for each calendar quarter equal to 50 percent of the qualified wages with respect to each employee of the employer for the calendar quarter. The employee retention credit applies to wages paid after March 12, 2020, and before January 1, 2021.
Employee Retention Credit – Calculation	Amount of qualified wages with respect to any employee which may be taken into account for ALL calendar quarters – limited to $10,000.
Employee Retention Credit – Eligibile Employers	An “eligible employer” is any employer that was carrying on a trade or business during calendar year 2020, and whose operation is fully or partially suspended during the calendar quarter due to orders by a government authority due to COVID-19, or for which the calendar quarter is within a period of “significant decline in gross receipts.”
Employee Retention Credit – “Signifcant decline in gross receipts” defined	A period of significant decline in gross receipts means a period beginning with the first calendar quarter beginning after December 31, 2019, for which gross receipts (as defined in Code Sec. 448(c)) for the calendar quarter are less than 50 percent of gross receipts for the same calendar quarter in the prior year, and ending with the first calendar quarter in which gross receipts are greater than 80 percent of the gross receipts for the same calendar quarter in the prior year.
Extension of time to Pay Employment Taxes	Under the CARES Act, a business can delay payment of applicable employment taxes for the period beginning on March 27, 2020, and ending before January 1, 2021 (i.e., the payroll tax deferral period). Generally, under this provision, an employer will be treated as having timely made all deposits of applicable employment taxes that would otherwise be required during the payroll tax deferral period if all such deposits are made not later than the “applicable date,” which is defined as (1) December 31, 2021, with respect to 50 percent of the amounts due, and (2) December 31, 2022, with respect to the remaining amounts. In addition, for self-employed taxpayers, the payment for 50 percent of the self-employment taxes for the payroll tax deferral period is not due before the applicable date. For purposes of applying the penalty for underpayment of estimated income taxes to any tax year which includes any part of the payroll tax deferral period, 50 percent of the self-employment taxes for the payroll tax deferral period will not be treated as taxes to which that penalty applies.
Net Operating Losses	Can be carried back to eliminate prior year income.
Farm and Business Loss limitations	Individuals only – Tax year beginning December 31, 2017 and before January 1, 2026 – Deduction limitation on excess farm losses of certain taxpayers does not apply.
Deductible Business Interest Expense	For tax years beginning in 2019 or 2020, 50 percent of the taxpayer’s adjusted taxable income, rather than 30%, is used to determine the business interest expense limitation.  Special rules applicable for partnerships.