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Key Tax Provisions for Individuals and Businesses in the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”)

In response to the recent coronavirus (COVID-19) pandemic and its economic impact, the Treasury, IRS and State of Maryland have provided tax relief for both individual and business taxpayers. Below is a brief summary. Qualifications and requirements vary for this relief. In light of this, we encourage and recommend that you contact us to discuss things further. We look forward to hearing from you.

Federal Income Tax due for Businesses and Individuals 

For those with returns or payments due April 15, 2020, the deadline to FILE and PAY is extended until July 15, 2020.

  • Taxpayers impacted by this change include individuals, trusts, estates, corporations or any type of unincorporated business entity.  
  • “Payments” are defined as 2019 Federal income tax payments and 2020 estimated Federal income tax payments, including self-employment income tax.
  • NOTE: Second quarter estimated tax payments are still due on June 15, 2020. First quarter estimated tax payments are due on July 15, 2020.
  • The deadline for 2019 IRA payments has been extended to July 15, 2020.  
  • This is an AUTOMATIC POSTPONEMENT until July 15, 2020.  The taxpayer does not need to file anything unless they need additional time after July 15, 2020. 

The State of Maryland has also extended the deadline to FILE and PAY income tax and first quarter estimated tax payments. 

Additional Business Relief

In addition to the above, the IRS has announced the following financial assistance for businesses:

  • Employee Retention Credit. Please note that small businesses who take small business loans are not eligible for this credit. Further information about Employee Retention Credit can be found here.
  • Coronavirus-related paid leave for workers, as well as tax credits for small and mid-size businesses.
  • Delayed payment for the employer’s share of Social Security payroll taxes. Companies who qualify may delay paying their share of Social Security payroll taxes until January 1, 2021. 50 percent will be owed by the end of 2021 with the other half due December 31, 2022.  There is no delayed payment for the employer’s share of the Medicare payroll tax.

The State of Maryland has also announced programs to assist businesses. However, the only program still accepting applications at this time is the Maryland COVID-19 Emergency Relief Manufacturing Fund. Additional guides for small business owners under the CARES Act can be found here.

As always, Baxter Baker is here to help. For a fresh and personal look at your legal needs, or if you have any questions about the CARES Act tax provisions, contact Cindy Ardinger at 410-230-3800.