Insights

While the Stay at Home order issued last month by Illinois Gov. J.B. Pritzker as a result of the coronavirus (COVID-19) pandemic has numerous (and obvious) impacts on business, a perhaps overlooked aspect of social distancing and working from home affects witnessing and notarizing important legal documents such as wills, trusts, powers of attorney, deeds and other real estate documents, mortgages and other loan documents, etc.

As part of the recently enacted $2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Congress included expanded unemployment benefits in partnership with state unemployment agencies. The CARES Act creates a pandemic unemployment assistance program through Dec. 31, 2020, and retroactively to Jan. 27, 2020. The CARES Act will provide payment to those not traditionally eligible for unemployment benefits (self-employed, independent contractors), along with others who are unable to work due to the COVID-19 public health emergency, (e.g., furlough, layoff, reduced hours, etc.).

As discussed in two previous articles on payroll tax credits for sick and family leave and CARES Act tax relief, eligible employers are entitled to claim an employment tax credit for qualified sick and family leave wages and the qualified wages eligible for the employee retention credit. As a result, the IRS has issued Form 7200, Advance Payment of Employer Credits Due to COVID-19, and instructions for that form.

The IRS has delayed the due date for filing 2019 federal gift and generation-skipping transfer (GST) tax returns and making federal gift and GST tax payments from April 15, 2020, to July 15, 2020.  Earlier this month, the IRS provided that the due date for filing federal income tax returns and making federal income tax payments due April 15, 2020, is automatically postponed to July 15, 2020. Now, the IRS has provided that the due date for filing Forms 709 and making federal gift tax and GST tax payments due April 15, 2020, also is automatically postponed to July 15, 2020.  An extension to file beyond the new July 15, 2020 due date, by Oct. 15, 2020, may be obtained by filing Form 8892 by July 15, 2020. However, any federal gift and GST tax payments will still be due on July 15, 2020.  Note that the IRS has not postponed the due date for filing federal estate tax returns (generally, nine months after the date of death).  

In addition to benefits available under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Families First Coronavirus Response Act (Response Act), an existing benefit under the Internal Revenue Code (IRC) may be helpful to employers looking to provide financial assistance to employees impacted by the COVID-19 pandemic.

Gould & Ratner presents the first installment of an interview series on adapting to the COVID-19 pandemic. We periodically sit down with some of the most accomplished and incisive venture capital entrepreneurs and executives and discuss their insights on relevant and pressing topics of interest to the community.