Anthony Sykes & Company

          Millions of individuals waiting for their Economic Impact Payments ( EIP ) will soon find out they are coming in the form of a debit card instead of a check. This is another way to provide the much needed funds in an efficient and secure way. A group within the Treasury Department makes the determination of who will receive a debit card. The information that comes with the card will make it clear that this card is prepaid with the EIP funds.           The debit card can be used just like any other card. Cash can be withdrawn or transferred to your personal account. Using a card like this will automatically provide protections against things like fraud and loss. If you have not received your EIP in Direct Deposit, paper check, or debit card form, please continue to be patient.

        Many Small Businesses are anxiously awaiting an opportunity to have their share of some of the COVID-19 relief provisions that have been made by the Coronavirus Relief and Economic Security ( CARES ) Act. The most well-known is the Paycheck Protection Program ( PPP ). We have written about this program in the past. One reason it is so attractive to businesses is that a loan of up to $10 million can be forgiven if the owner follows some simple rules and applies all of the money to the firm and its employees. Now the Internal Revenue Service ( IRS ) has weighed in on how this changes what a business can deduct.           During normal times, a business can deduct things like wages and rent. These are the same expenses the loan in the PPP is expected to be used for. With that understanding, the IRS has now stated that anything the PPP is used for cannot be deducted from taxes for the business. The reasoning i...

          The Internal Revenue Service ( IRS ) has stated that certain travelers who are stranded in the United States due to Coronavirus restrictions may not be subject to tax requirements. Normally the IRS would subject foreign individuals to file a Tax Return stating their worldwide income, and potentially pay taxes on it, if they met a residency threshold. Considering how much traveling has been impacted by the COVID-19 pandemic, many might be in the US much longer than they planned.           Nonresident aliens, foreign corporations, or partnerships can choose a 60-day period starting between February 1 and April 1 that will be excluded from consideration by the IRS when it decides if they are engaged in active business in the US. They could have asked all foreign individuals to file tax returns and then make the determination. Even with this bit of good news, business owners still need to be proactiv...

           The emergency funding provided by the Paycheck Protection Program ( PPP ) seems to have slowed down. There are billions of dollars still available, but lenders say that demand is down. Many businesses put in loan applications with different banks, when one got approved they pulled the other ones. Some businesses decided that they no longer qualified, while others did not want to share necessary payroll details in their applications.           A number of the businesses that are no longer interested in this program cite confusion for removing their applications or declining their loans. The Coronavirus Relief and Economic Security ( CARES ) Act made the PPP possible. It was the Small Business Administration ( SBA ) that stated 75% of the loan must be used for employees by the end of June in order to qualify to be forgiven. Many industries have no work to pay the employees for. How can these funds b...

               Many Economic Impact Payments ( EIP ) have been processed and deposited. Others will soon be deposited or mailed. The typical amounts for those who qualify have been widely publicized, but some are finding out that their EIP is not the amount that they had expected. There are a few reasons why.           Tax Returns . For most individuals or couples, their EIP will be based off of the 2019 Tax Return. If it has not been filed, or not yet processed, 2018 will be used. So any changes between those years will not be reflected in the payment. Dependents . To qualify to receive an extra $500 for a claimed dependent, they must have a Social Security Number and be age 17 or younger. If a Taxpayer over the age of 17 is claimed, then they cannot receive a $1,200 payment of their own. Other Taxpayers may get a payment with an odd amount.        ...

         There is a lot of confusion and frustration surrounding the details of the Coronavirus Relief and Economic Security ( CARES ) Act. One particular area that aggravates Taxpayers is the Economic Impact Payment ( EIP ). Many are wondering when this check or deposit will arrive for them and their families. Different provisions have been made to make sure that those who qualify are not left out. The Internal Revenue Service ( IRS ) is now making it clear that those who do not file a Tax Return because their income is too low, may also qualify for this payment.           The IRS is encouraging these individuals to use this online tool to provide information on where to send the stimulus funds. It is the same online tool other Taxpayers had been using to update their information and to claim dependents. Since a person who does not need to file a Tax Return is generally unknown to the IRS , they need to use...

           All businesses have been impacted in a variety of ways by the COVID-19 pandemic. Even as some government restrictions begin to relax, the true toll is only starting to become clear. This is due not only to closings or modifications of how a business is operated, but also how employees have been effected. The Internal Revenue Service ( IRS ) has made provisions to deal with some of these changes.           The Families First Coronavirus Response ( FFCR ) Act was signed into law to provide relief for individuals along with small and midsize businesses. It creates 2 new refundable payroll tax credits. This is to be used to provide employees with paid leave to care for COVID-19 related health issues for themselves or family members. This will include any health insurance costs for the employee. This credit is fully refundable to the employer and will be sent by the IRS as soon as possible. To find ou...

On April 27, the Paycheck Protection Program ( PPP ) restarted with $310 Billion dollars ready to loan to Small Businesses. This time there are promises to learn from earlier mistakes. For example, $60 Billion is reserved for smaller community banks, and no bank can process more than $60 Billion in loans. This is thought to create a sense of equality and pacing for all businesses looking to seek relief. The Small Business Administration ( SBA ) is trying to keep large corporations from squeezing out loan access for small shops. How did things work out the first week? There were widespread complaints about the online application system. E-Tran continues to crash and is overloaded by the number of users and applications that are uploaded. With that said, the SBA claimed it processed 100,000 loans from 4,000 lenders on Monday alone. Community banks feel that this is worse than their first try. While there is a limit of $10 Million per application, many feel that this funding will...

With all of the confusion we are dealing with on a daily basis, and economic relief being provided, many are wondering how this may affect their Tax Return for next year. What Taxpayers are being given is tax-free. On March 13, the President declared a National Emergency because of the spread of COVID-19 . Any payments given that relate to that emergency will be tax free. Much of that will come from the Coronavirus Aid, Relief, and Economic Security ( CARES ) Act.           This does not allow for a person to receive 2 forms of payment for the same disaster relief. There can be no double dipping. If you are receiving income from Unemployment, that is taxable.