Crazy and hysterical is how I would describe it as I sit here and watch the financial markets go into a complete meltdown. I wonder how can an influenza virus that was just identified less than 3 months ago, cause such worldwide panic to our financial systems and economy? Surely our scientists can develop a vaccine to combat this. What we do know is the worldwide panic has set in, Countries are closing their borders, factories and plants are idled, people are getting laid off from jobs, schools are closing, the NBA has suspended games, colleges are stopping classes, the stock market is in a free fall. Travel is being restricted.
Last night in reaction to all this, the President announced that he had instructed Congress to take some immediate extraordinary measures to stimulate the economy and help individuals and businesses during these tough economic times that includes the following;
Payroll tax relief – President has proposed dropping the payroll tax rate to zero from 6.2% through the end of 2020. This would help workers and employers, but provide no relief to those who are not receiving payroll checks.
Deferral of Tax Payments – Certain individuals and businesses would be able to delay tax payments without penalty or interest. No specifics have been provided, but presumably this means payments due between March 15th, 2020 and October 15th, 2020.
In addition, the Treasury Secretary Steven Munchin has indicated that he would support extending the April 15th tax deadline for businesses and individuals that have been impacted by the Coronavirus.
The President has also ordered the SBA (Small Business Administration) to begin providing up to $ 50 billion in economic low interest rate loans to small businesses to provide liquidity and avoid economic disruptions.
The American Institute of Certified Public Accountants (AICPA) has also requested that IRS grant automatic extensions to file until October 15th for all businesses and individuals with returns due March 15th or April 15th. In addition, they have requested a waiver of penalty and interest until October 15th for taxes that were due April 15th.
Stay tuned for these developments and fluid situations and feel free to call our office if you have any questions.