On March 10th Congress passed the $1.9 trillion coronavirus relief known as The American Rescue Plan Act of 2021 (“the Act”), by a 220-211 vote after the passage of the Act on March 6th by the Senate. The Act was swiftly signed by the President, providing long-discussed relief provisions, with many tax law changes included. Details of some key provisions within the Act are discussed below.

Individual Provisions

Individual Recovery Rebate/Credit

The Act includes a third round of stimulus payments that will total $1,400 per eligible individual taxpayer. In order to qualify for the full amount, a single filer must have an Adjusted Gross Income (“AGI”) of $75,000 or lower, with the threshold increasing to $112,500 for heads of household, and $150,000 for couples married filing jointly. The payments will phase out completely when the AGI reaches $80,000 for single filers, $120,000 for heads of households, and $160,000 for couples married filing jointly. Payments will follow the same methodology as the prior two rounds of stimulus checks, with payments deposited directly into a taxpayers’ bank accounts if the Internal Revenue Service (“IRS”) has their direct deposit information on file, or mailed to the address the IRS has on file.

College students and other eligible dependents are eligible for this third stimulus, with payments paid directly to the parents.

The stimulus payment eligibility factors will be based on the most recent year’s tax information on record, meaning if your 2020 returns have already been filed the IRS will base eligibility on 2020, if you have not filed eligibility will be based on your 2019 information.

As was the case with the previous stimulus payments, if an eligible taxpayer is entitled to an amount larger than he or she receives, a credit for the excess will be available on the taxpayer’s 2021 individual income tax return, due on April 15, 2022. Amounts received that are higher than the allowable credit calculated on the 2021 individual income tax return will not have to be repaid.

Unemployment Benefits

Also included in the Act is an extension of the additional $300 per week in unemployment benefits, through September 6, 2021, and an exclusion from tax of up to $10,200 in unemployment compensation received during the 2020 tax year. This exclusion is limited to individuals with an AGI of less than $150,000. Taxpayers who qualify for this exclusion but have already filed their individual income tax returns may amend their returns in order to claim the exclusion and receive a refund of any taxes already paid.

Earned Income Tax Credit

The Act modifies the earned income tax credit (EITC), and increases the amount of the credit for the 2021 tax year. For filers without children, the credit is increased from $543 to $1,502, and the income limit at which the full credit can be claimed is increased to $9,820. The threshold for the phaseout of the credit for non-joint filers is also increased to $11,610, up from $8,880. The minimum age for filers without children claiming the EITC is reduced to 19 from 25 (except in the case of full-time students).

Taxpayers will be allowed to use their 2019 earned income amount instead of their 2021 earned income earned income amount if it is greater than 2021.

Other changes made that are permanent include eliminating the disallowance of the EITC due to lack of identification requirements; increasing disqualifying investment income to $10,000, adjusted for inflation after 2021; and adjusting the definition of “married” so that separated individuals who meet certain requirements can avoid filing jointly with an ex-spouse in order to claim the EITC.

Child and Dependent Tax Credits and Other Benefits

Another key provision in the Act is the modification of the Child and Dependent Care tax credit for qualifying taxpayers who have children under the age of 13 or other qualifying dependents. The Act modifies this credit so that it is fully refundable for tax years beginning in 2021, which could provide qualifying families with an additional tax refund. The maximum credit is up to $4,000 per qualifying individual, or $8,000 for two or more for tax years beginning in 2021. Taxpayers calculate the credit by taking up to 50% of the value of eligible expenses, subject to a phaseout to the extent the taxpayer’s AGI exceeds $125,000.

The Act also increases the Child Tax Credit for 2021 to $3,000 (up from $2,000) per eligible child and raises the age limit of qualifying children to 17. Married couples who have modified AGI up to $150,000, heads of the household up to $112,500, and single filers up to $75,000, would receive the full value of the credit. The credit then phases out as income increases. The Act makes this credit fully refundable.

In addition to these changes, the Act allows for an increase in the amount that can be set aside in a dependent care flexible spending account. The amount is increased from $5,000 to $10,500 for the 2021 year only. Note that employers have the discretion to allow this change, and therefore withholdings cannot be modified without employer consent. More guidance on this is expected in the near future.

Student Loan Forgiveness

The Act does not forgive any student loan debt, but it does pave the way for potential future forgiveness. The Act modifies the Internal Revenue Code to specify that any student loan forgiveness between December 31, 2020 and January 1, 2026 will not be taxable and amounts forgiven will not be included in the computation of a taxpayer’s AGI.

Business Provisions

Employee Retention Credit

The Act codifies the Employee Retention Credit (“ERC”) and extends the ERC through December 31, 2021. The ERC was originally enacted under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act passed in March of 2020, and extended through the Consolidated Appropriations Act (“CAA”) passed in December of 2020. Eligible employers are entitled to a credit in an amount equal to 70% of the first $10,000 wages per employee for each qualifying quarter in 2021. This means that an employer could potentially have up to $40,000 in qualifying wages, per employee, during tax year 2021.

Families First Coronavirus Response Act (“FFCRA”)

The FFCRA was established to establish mandatory obligations for employers to provide emergency paid sick and family leave. The FFCRA expired on December 31, 2020 but was temporarily extended through the CAA permitting employers to implement policies that would provide paid leave as a qualifying requirement of eligibility for a credit against payroll tax. This modification was set to be available until March 31, 2021. The current Act extends the tax credits for sick and family leave to September 30, 2021. The Act also adds additional reasons that employees qualify for paid sick leave and family leave including vaccine appointments and complications that may arise due to receiving the vaccine. Additionally, the Act resets the 80-hour per employee limit after March 31, 2020, and increases the limit on the credit for paid family leave to $12,000. Federal workers are now eligible for up to 15 weeks of paid leave for COVID-19-related absences for themselves and their families under the Act. Self-employed individuals are also permitted an increase from 50 days to 60 days of qualifying family leave absences.

Paycheck Protection Program

The Act further modifies the Paycheck Protection Program to include additional eligible organizations. Specifically, the following types of businesses are now eligible for PPP loans:

• Certain 501(c) organizations with up to 500 employees per location.
• Certain nonprofit organizations with no more than 300 employees and either less than 15% of receipts or activities resulting from lobbying or whose cost of lobbying activities did not exceed $1 million in the tax year before February 15, 2020.
• Certain internet publishing organizations with a NAICS code of 519130, who have not more than 500 employees, and who will use the loans to support expenses related to supporting local or regional news.

The Act also adds $7.25 billion of funding for the PPP program but does not extend the period in which loans can be approved, which currently ends March 31, 2021.

Restaurant Revitalization Grants

Certain businesses, including restaurants, food stands, food trucks, food carts, caterers, saloons, inns, taverns, bars, lounges, brewpubs, tasting rooms, taprooms, licensed alcohol production facilities where visitors may taste, sample, or purchase products, or other similar businesses may now be eligible for a Restaurant Revitalization Grant. These businesses must have no more than 20 locations and cannot apply for a Shuttered Venue Operator Grant.

Grants, up to $10 million per business and up to $5 million per physical location will be calculated based on the difference in gross receipts between 2019 and 2020. Any relief received under the Paycheck Protection Program will be used in the gross receipts calculation, thus reducing the amount of the grant. Grant funds can be used for payroll costs (except those payroll costs used to obtain an Employee Retention Credit), mortgage payments, rent, utilities, and certain maintenance, supplies, food and beverage, supplier, or other operational expenses. Applicants must certify that economic uncertainty makes the grant request necessary to support the ongoing operations of the eligible entity.

Shuttered Venue Operator Grants

While the Shuttered Venue Operator Grant program, introduced in the Economic Aid Act portion of the Consolidated Appropriations Act, 2021, has not opened for applications, guidance continues to evolve. Earlier this month, additional frequently asked questions and guidance, were released by SBA.

Now, the American Rescue Plan Act of 2021 expands the Shuttered Venue Operator Grant program to eligible businesses who apply for or receive a Paycheck Protection Program loan. The amount of the Shuttered Venue Operator Grant will be reduced by the amount of the Paycheck Protection Program loan.

These are just some of the provisions included in the American Rescue Plan Act of 2021. HBK will continue to bring you in-depth analysis as additional information becomes available. If you have any questions please contact your HBK Advisor.

Among its COVID-19 relief provisions, the Consolidated Appropriations Act of 2021 (“CAA”) allows taxpayers affected by a qualifying disaster to take distributions of up to $100,000 from their qualified retirement plans. Under the provision, they can pay the tax over a three-year period and are exempted from the usual 10 percent penalty on early distributions.

Under the CAA, a qualified disaster is defined as:

• a presidentially declared disaster between December 28, 2019 and December 31, 2020; or
• a qualified disaster area per the Stafford Act that has been declared by the President between January 1,2020 and February 19, 2021; or
• the same as “major disaster” per the Stafford Act and within the timeframe of December 28, 2019 through December 31, 2020.

Qualified disasters are monitored and made public by FEMA, and listed on their disaster declarations page.

Under the CAA, disaster relief is available only in connection with recent natural disasters other than those solely related to COVID-19. The COVID-19 provisions of the CCA provide temporary relief from the partial plan termination rules under section 411(d)(3) of the Internal Revenue Code of 1986, as amended, for employee turnover due to the COVID-19 pandemic period.

In the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Congress modified its qualified disaster distribution rules by removing the 10 percent tax for early withdrawals for coronavirus-related distributions of up to $100,000. To qualify the distribution must be from an IRA or eligible defined contribution plan, including 401(k), 403(b), and 457(b) plans, and made between January 1 and December 31, 2020.

In addition, the distribution must be made to an individual:

• who is diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 (Covid-19) by a test approved by the Centers for Disease Control and Prevention, or
• whose spouse or dependent is diagnosed with such virus or disease by such a test, or
• who experiences adverse financial consequences as a result the coronavirus.

Adverse financial consequences can include consequences resulting from an individual, individual’s spouse, or household member (defined as someone who shares the individual’s principal residence):

• being quarantined,
• being furloughed or laid off or having work hours reduced due to such virus or disease,
• being unable to work due to lack of child care due to such virus or disease,
• whose owned or operated business was closed or had operating hours reduced due to such virus or disease,
• incurring a reduction in pay or self-employment income,
• having a job offer rescinded or start date for a job delayed, or
• other factors as determined by the Secretary of the Treasury.

If you have taken advantage of the CARES Act or CAA provisions for retirement plan distributions and have questions on how this may impact your taxes please reach out to your HBK Tax Advisor or HBKS Wealth Advisor.

Congressional leaders have agreed on a new stimulus package that includes a second round of Paycheck Protection Program loans for certain borrowers and tax relief for small and mid-size companies. President Trump has now signed the bill into law. HBK’s Ben DiGirolamo, CPA, JD, and Amy Reynallt, MBA, discuss the details, help you determine which provisions affect you and your business, and what steps you should take next to benefit from the new stimulus. Discussion topics include:

• Who is eligible for a second draw PPP loan
• Changes to the original PPP forgiveness process that may affect your forgiveness application
• The reversal to the IRS’s notices on tax deductibility of expenses paid for with the PPP loans
• Updates on the Economic Injury Disaster Loan program
• Support for more types of businesses including tax breaks and changes you should know
• Stimulus payments to individuals and extended unemployment benefits

  Download the presentation materials.

On Sunday evening, President Trump signed the Consolidated Appropriations Act, 2021, which includes COVID-19 relief through its Additional Coronavirus Response and Relief section, into law. Despite initial criticism from the President last week, Congress made none of the changes previously requested by the President. Key provisions within the COVID-19 portion of the law include:

• Stimulus checks for eligible individuals
• The extension of certain unemployment benefits
• An extended and expanded Employee Retention Credit
• Changes to existing Paycheck Protection Program (PPP) loans, including clarification that expenses paid with forgiven PPP loan funds will now be deductible for federal income tax purposes
• A second draw PPP loan for eligible businesses
• The extension of several tax credits and deductions

  For a summary of the law’s major COIVD-19 provisions, visit Agreement Reached! New Stimulus Package Expected to be Passed into Law. Over the coming days and weeks, it is expected that additional guidance will be issued from agencies including the Small Business Administration (SBA), Department of the Treasury, Department of Labor (DOL), Internal Revenue Service (IRS), and others that may facilitate these COVID-19 relief programs. Individuals and businesses interested in these relief options are encouraged to watch for this guidance as well as communications that may indicate when such programs are made available. For questions regarding this law or your COVID-19 relief options, please contact your HBK Advisor.

Nine months after passing the CARES Act, Congressional leaders have reached an agreement on the next round of COVID-19 relief. This package, which is part of the omnibus bill, offers support to individuals and businesses through a variety of programs. The bill was passed last night by both the House and Senate and is expected to be signed by President Trump before the end of the week. Key provisions of this stimulus package include but are not limited to the following:

• Direct stimulus paymentsDirect stimulus payments up to $600 per individual, $1,200 for a married couple filing jointly, and $600 for qualifying children under the age of 17. The payments will be subject to a phaseout for single taxpayers with 2019 adjusted gross income (AGI) in excess of $75,000, and married filings with AGI exceeding $150,000. Like with the stimulus payments issued earlier this year, these payments represent an advance in taxpayers’ credits, although those who receive a stimulus payment that is larger than the credit will not be required to pay back stimulus funds that exceed the credit amount.
• Extended unemployment benefitsBenefits for the unemployed will be extended for 11 weeks to March 14, 2021, with $300 weekly offered by the federal government after December 26, 2020. The Pandemic Unemployment Assistance (PUA) program, which offers unemployment benefits to those often ineligible for unemployment such as those that are self-employed or do not have sufficient work history to qualify for regular unemployment compensation, will also be extended.
• Employee payroll tax deferralCongress extended the employee payroll tax deferral allowed under President Trump’s executive action on wages paid from September 1 through December 31, 2020 to April 30, 2021. In addition, the bill extends the due date for payment of those deferred taxes to December 31, 2021.
• Clarification of tax treatment of forgiveness of covered loansPPP loan forgiveness, Economic Injury Disaster Loan (EIDL) advances, and other loan payment subsidies will not be includable in taxable income. In addition, expenses paid with these loans, grants, or subsidies will now be deductible for federal income tax purposes.
• Extension of FFCRA Paid Sick Leave and Expanded Family Medical LeaveThe FFCRA programs required certain employers to pay sick or expanded family medical leave related to certain COVID-19 circumstances, and in return, the employer could receive a fully refundable payroll tax credit equal to those wages and qualified health insurance payments. While the program was set to expire at the end of the year, the bill extends the tax credits through March 31, 2021.
• Extended and Expanded Employee Retention Tax CreditThe Employee Retention Tax Credit (ERC) was extended through July 1, 2021, and its benefits were increased for 2021. The credit amount increased from 50% to 70%, with the employee wage limitation of $10,000 per employee now applying by quarter. To be eligible, businesses must have suffered at least a 20% (down from 50% in the CARES Act) reduction in gross receipts in the calendar quarter, as compared to the same calendar quarter in 2019. One of the most significant changes is that businesses with a PPP loan may now benefit from the ERC, however, wages included in the ERC are not forgivable PPP loan expenses
• Full Deduction for Business MealsBusiness expenses for food or beverages provided by a restaurant and paid or incurred after December 31, 2020 and before January 1, 2023 are 100% deductible.
• Changes to the PPP programWith $35 billion earmarked for new borrowers, including certain 501(c) organizations who were previously ineligible, Congress made further changes to the Paycheck Protection Program (PPP). Borrowers who have not yet applied for forgiveness will find that additional non-payroll costs and the ability to select a covered period between 8 and 24 weeks are two added features of the PPP program. Borrowers with loans under $150,000 will also have a simplified application process. Further, businesses who obtained both a PPP loan and an EIDL advance will no longer see their PPP forgiveness reduced by the amount of their EIDL advance.
• Additional PPP loansA “second draw” loan will be available to certain small businesses that have been heavily affected by the COVID-19 pandemic. Generally, these businesses must have used or will use the full amount of their PPP loan, have less than 300 employees, and have experienced declines in gross receipts of 25% in any 2020 calendar quarter, as compared to the same quarter in 2019. Interested businesses should be aware that this eligibility criterion is different than in the original round of PPP funding, meaning that borrowers should carefully consider their eligibility. Eligible borrowers may apply for and receive loans up to $2 million, based on 2.5 months of average monthly payroll costs, except for certain hospitality industry businesses, who may receive loans equal to the lesser of $2 million or 3.5 months of average monthly payroll costs.
• Grants for Shuttered Venue OperatorsCertain live venue operators or promoters, theatrical producers, live performing arts organization operators, museum operators, motion picture theatre operators, and talent representatives that meet certain requirements including a 25% reduction in revenue in a calendar quarter in 2020 as compared to the same quarter in 2019 may be eligible for grants. These grants are intended to be used for the payment of payroll costs, limited independent contractor payments, rent, utilities, mortgage interest, debt interest, certain worker protection expenses, and other maintenance, administrative, state and local tax, insurance, advertising or other costs.

HBK CPAs & Consultants is committed to keeping you up to date on the quickly changing status of this stimulus bill. After the President signs the legislation, it is expected that subsequent guidance may be issued to further clarify the implementation of the provisions, changes, and extensions allowed for in this bill. To discuss your individual or business situation concerning the COVID-19 pandemic, or for any questions related to this stimulus package, please contact your HBK Advisor.  

On Saturday, August 8, President Donald Trump signed four separate executive orders after congressional Democrats and Republicans were unable to come to an agreement over stimulus legislation. The executive orders have left many questions over what relief they will provide, and whether they can withstand legal scrutiny. Payroll Tax Deferral President Trump has directed Treasury Secretary Steven Mnuchin to defer the withholding, deposit, and payment of employee payroll taxes for some employees for the period of September 1, 2020 through December 31, 2020. The direction for a deferral only applies to employees who make less than $4,000 on a pre-tax basis during a bi-weekly pay period. The deferral would prevent the imposition of interest and penalties, and further directs Secretary Mnuchin to explore methods, including legislation, to eliminate the obligation altogether. To accomplish this deferral, President Trump calls on Secretary Mnuchin to use the same qualified disaster authority he used to extend the income tax filing deadline from April 15th to July 15th this year. Political and legal commentators are questioning the legality of the order, and criticizing the potential long terms effects it may have on Social Security. The order may do little to provide actual relief, since many employers may hesitate to stop withholding payroll taxes that are not forgiven but simply deferred. Student Loan Payment Deferral President Trump has directed the Secretary of Education to extend the deferral of student loan payments through December 31, 2020. Previously at the beginning of the pandemic, President Trump had requested a 60-day deferral, which was later extended through September 30, 2020 by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Individuals that wish to continue making payments may still do so. Expanded Unemployment President Trump has redirected disaster relief funds in order to support lost wage payments and has called on the states to use the funds to create a new program – the “lost wages assistance program” – to provide for an additional $400 per week in unemployment payments. The additional payments would extend through December 27, 2020. To obtain Federal funds for the increased unemployment payments, state governors must agree to a cash-sharing requirement, whereby Federal funds would cover $300 and state funds would cover the remaining $100. The executive order encourages states to identify other funds to continue the payments if and when the Disaster Relief Fund is reduced to $25 billion. State governors are already criticizing the executive order, indicating that additional funds to pay the required contribution of $100 may not be available. Renter and Homeowner Assistance President Trump has indicated that his administration will minimize, to the greatest extent possible, evictions and foreclosures during the COVID-19 pandemic. To do this, President Trump has directed the Secretary of Health and Human Services and the Director of the Centers for Disease Control and Prevention to consider temporary measures to halt residential evictions which may be necessary to prevent the further spread of COVID-19. The executive order directs them to identify Federal funds that could provide financial assistance for those who are struggling to pay their monthly rent or mortgage. The effects of this executive order are still unclear since it does not outright ban evictions, but instead instructs agency leaders to review whether a ban is necessary and identify funds that may be used. We will continue to keep you informed as additional information becomes available and relief package negotiations continue. Please consult with your HBK advisor to determine whether and how you may be impacted by the recent executive orders.

Preparing for the tax deadline is normally a process of gathering documentation together, scheduling a meeting with your accountant, and going to their office to discuss how the past year has gone. However, with the unprecedented times that we are dealing with due to COVID-19, this tax deadline is proving to be a much different story than in past years. There are many additional considerations for tax year 2019 and planning and preparing well are some of the best ways to ensure a smooth filing during this rough time.

Tax Documents

Many taxpayers have gotten accustomed to the shoebox filled with receipts and documents to drop off to their accountant every year. In a more virtual, online world this tradition has been slowly fading away, and in a COVID-19 world, it is quickly becoming a thing of the past. Many offices all around the country, and even the world have been closed and the workforce has shifted to a telecommuting rat race. When it comes to handing in your tax documents, this has shifted to a more electronic process of scanning in documents and emailing them rather than physically dropping them off to the office.

Tax Deadline

The biggest change this tax season has been the extension of the tax deadline from 4/15 to 7/15. The IRS announced this extension to offer relief to taxpayers by granting additional time in order to file and pay their taxes. There was discussion about pushing the deadline back even further, however, the IRS announced on June 30th that they will not be extending the deadline beyond July 15th. Taxpayers who still need more time can file an extension as in previous years, which would extend the filing deadline to October 15th, 2020. As always, this extension extends the time to file, but not to pay. All taxes due must be paid by July 15th. For those taxpayers suffering from liquidity issues as a result of the current environment, the IRS offers payment plans that may help mitigate interest and penalties due to late payments.

Estimated Tax Payments

The deadline extension has not only affected tax filings, but estimated tax payments as well. The 1st and 2nd quarter estimated payments were both pushed back from April 15th and June 15th, to July 15th. This means that for taxpayers filing their tax returns and making estimated quarterly payments, they will need to make all of these on July 15th.

IRA/HSA Contributions

The deadline extension has also extended the time to make an IRA or HSA contribution for 2019. This means that taxpayers who plan on contributing to an individual retirement account or a health savings account will now have until July 15th, 2020 to do so.

As always, HBK is here to help with any of your tax compliance needs. If you have any questions regarding the tax deadline, please contact your HBK tax advisor.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed in March 2020, eliminated the Required Minimum Distribution (RMD) from defined contribution plans and IRAs for 2020. The waiver of RMDs for 2020 does not apply to defined benefit plans. For taxpayers who had already taken their RMD for 2020, the law provided a 60-day rollover period during which the funds could be put back into an eligible retirement account without triggering tax consequences. On Tuesday, June 23, 2020, the IRS issued Notice 2020-51 which extends the period that RMD recipients have to rollover the RMD taken this year until August 31, 2020. Thus, regardless of when the RMDs were taken in 2020, a recipient has until the end of August to roll the funds into an eligible retirement plan.

In addition to the rollover opportunity, the notice provides that an IRA owner or beneficiary who has already received an RMD for 2020 may repay the funds to the distributing IRA by August 31, 2020. The repayment will not be treated as a rollover for purposes of the one rollover per 12-month period limitation or the restriction on rollovers for inherited IRAs under §408.

Finally, the notice provides two sample amendments that employers may use to give plan participants and beneficiaries whose RMDs are waived a choice of whether to receive the waived distribution, as well as 12 Q&As which provide further guidance regarding other issues related to the relief. Importantly, Q&A-3 modifies Notice 2007-7 by specifying that if an employee died in 2019, a non-spouse designated beneficiary has until the end of 2021 (rather than 2020) to make a direct rollover and use the life expectancy rule.

With these changes to RMDs for 2020, an opportunity exists to either skip the RMD or repay the distribution already taken by the deadline in order to reduce taxes. Also, equity values are still slightly negative year-to-date in 2020, so by not taking a distribution you can avoid selling when values are decreased. However, this decision should be reviewed with your trusted advisor taking into consideration your cash needs and alternative sources of funds.

COVID-19 has been affecting all of our lives this year. While lockdowns and restrictions are currently being lifted, IRS operations are still significantly slowed down. This is impacting many of the services that the IRS offers, and causing significant delays.

IRS Offices Slowly Reopening
On June 1st, the IRS began to bring more people back onto its campuses and offices to perform work that cannot be performed remotely. The first phase included employees with non-portable work in Kentucky, Texas, and Utah.

The IRS plans to reopen additional operations in:

• Georgia and Tennessee beginning June 15th
• Missouri and Michigan beginning June 15th
• Indiana and Ohio beginning June 29th and
• California, Puerto Rico, Oregon beginning June 29th

Tax Identification Numbers
The IRS EIN-Unit that issues employer identification numbers for new businesses appears to only be issuing new EINs online. The office accepting EIN applications by fax is currently closed, which means that many new businesses that cannot use the online option are currently unable to obtain an EIN. Businesses that are organized outside the United States cannot use the online service, but may still be able to receive an EIN over the phone by calling 267-941-1099 between the hours of 6:00 am and 11:00 pm Eastern Time.

Individual taxpayers that need an individual taxpayer identification number (ITIN) can also expect significant delays. Typically, a new ITIN gets issued within six weeks, however, the current processing time for new ITINs appears to be over three months. Furthermore, the IRS office processing ITINs is currently not taking phone calls.

Status of Taxpayer Issues
Calling the IRS to check on taxpayer issues was not an option during the COVID-19 peak. Fortunately, the IRS has now opened the practitioner line to allow practitioners to call the IRS about many taxpayers’ issues. This has allowed HBK to follow up on the status of many client issues, but has to lead to other complications since most IRS agents are working from home, and not every IRS agent has access to a fax machine or other resources.

Stalled or Delayed Processing
Most IRS offices are still closed, and tax returns and tax payments mailed to IRS offices are still waiting to be processed. There have also been reports of mail being returned because the IRS office is unable to accept it. If a tax payment needs to be mailed to the IRS, we recommend that taxpayers use certified mail and keep adequate documentation to prove that the payment was mailed on time. If at all possible, electronic payments should be made via the IRS website.

On June 9, the Department of Health and Human Services (HHS) announced the distribution of an additional $15 billion from the Provider Relief Fund to Medicaid and Children’s Health Insurance Program (CHIP) providers. The distribution is intended to make supply relief available to the 38 percent of Medicaid and CHIP providers who did not receive payments in the initial General Distribution of Provider Relief Fund Payments in April and May.

Eligible providers include, but are not limited to, assisted living facilities, pediatricians, obstetrician-gynecologists, dentists, opioid treatment providers, and behavioral health clinicians. These monies, like the General Distribution, are extended as a grant that requires recipients to meet HHS compliance criterion.

To be eligible, providers must have:

• Not received payments from the $50 billion Provider Relief Fund General Distribution, and
• Directly billed their state Medicaid/CHIP program or Medicaid managed care plans for healthcare-related services between January 1, 2018 to May 31, 2020

Eligible providers who submit an application will receive a payment equal to at least 2 percent of their reported gross revenue from patient care. The application deadline is July 20, 2020.

The provider should have the following available for the application:

• “Gross Receipts or Sales” or “Program Service Revenue” as submitted on its federal income tax return broken out by payer mix
• Estimated revenue losses in March 2020 and April 2020 due to COVID-19
• Copy of the most recently filed federal income tax return
• Listing of the Tax Identification Numbers of subsidiary organizations that do not file separate tax returns
• Copy of IRS Form 941 or 940 for the first quarter of 2020

If you have any questions, HBK’s Healthcare Solutions team is here to help. Feel free to contact us at (330) 758-8613 or email me directly at kcrouthamel@hbkcpa.com.