COVID19 Tax Update

COVID19 Tax Update

While this is usually Turbo Tax’s busiest week of the season, they may have noticed a decrease in submitted taxes this week. This is due to the fact that the Treasury and IRS, have extended the tax deadline by 90 days in response to the novel coronavirus. The new federal tax filing deadline for this year is now July 15th. While the extension may come as a reprieve for many, taxpayers who are ready to file and make their tax payment without straining their bank account are encouraged to file in order to get their refund as soon as possible. Well, here are some answers to some common questions you might have.  

Do I need to file an extension in order to take advantage of the new filing deadline? 

No, you do not have to file any extensions or take any action. The new filing deadline of July 15th automatically applies to all taxpayers. 

Is there also an extension of the tax payment deadline? 

Yes, the new tax payment deadline is also July 15th. You do not need to take any action for this either. This deferment of tax payments is interest fee and penalty free, simply pay by July 15th. 

Does this mean I have more time to contribute to my IRA? 

Yes, a bonus to the extended due date of taxes is also that you now have until July 15th to contribute to your IRA for 2019. 

Will this affect when I get my refund?

No, the Treasury Department will continue processing refunds as soon as your taxes are filed. You should receive your refund within the normal time frame (9 out of 10 refunds are received within 21 days when filed electronically). 

What do I do if I already filed my taxes and scheduled my payment for the April 15th deadline? 

If you’ve already filed and scheduled your payment, but want to take advantage of the new deadline, you’ll have to cancel your payment and reschedule it. In order for this to go into effect, changes to the payment needs to be made no later than 11:59 p.m. ET, two business days before the scheduled payment date. 

What if I need more time then the July 15th deadline to file or pay my taxes? 

If you need additional time to file, you will then need to request an extension using Form 4868. This extension will give you until October 15th to file your taxes. However, tax payments need to be made by July 15th. Payments that are made after the July 15th deadline are subject to interest and penalties. 

Does the deadline also apply to state taxes?

A majority of states in the country have also extended their due date to the federal July 15th tax deadline. However, some states have created different deadlines and guidelines. It’s important to determine what your state has decided so that you do not unintentionally accrue any penalties.

Your PPP Loan: How Do You Apply For Forgiveness?

The PPP loan, for most, has already come and gone — though the second stimulus might very well open it up again. But one of the most appealing aspects of the PPP loan was the fact that it could be forgiven. As long as businesses used a certain amount of the funds towards essential things such as labor costs, they would be able to get the loan paid off by the government. Unfortunately, since the PPP loan packages were passed so quickly, there’s been very little guidance, and even most lenders have been left adrift.

Here’s what you need to know.


Lenders have not yet received comprehensive directions regarding the processing of forgiveness applications. This isn’t a good thing; the original deadline for even applying for forgiveness used to be mid-July. It’s since been extended, but the fact remains: there is a time limit for filing for forgiveness and it has changed before.

Because there’s no set path towards filing forgiveness, borrowers need to connect with their lenders directly. Lenders will give borrowers a list of documents and start preparing their paperwork, but it’s possible the lenders won’t be able to actually file this paperwork until the government gives them additional guidance.


The rules of forgiveness for the PPP loan have changed. But luckily, they’ve changed to be more forgiving, rather than less. First payroll costs can be forgiven up to $15,835 per individual over an eight week period, or up to $46,154 per individual if a 24 week maximum period is chosen instead. But it should also be noted forgiveness does differ depending on the type of entity. Sole proprietors have different requirements from LLCs.

It’s likely that organizations are going to need to show how their funds have been spent if they’re going to apply for forgiveness. While the exact ins and outs of applying for forgiveness may be questionable, organizations should already start getting their documents together and sending them in to their lender. Only then will their lender be able to start processing documents on their end.


So, because of the way that everything has panned out, organizations can fill out their forgiveness forms — but will need to wait until their lender is ready to process them. Because every lender is different, every lender is also going to have a different way of processing these documents. In addition to the documents themselves, organizations should get together:
  • Their monthly account statements.
  • Their monthly accounting reports.
  • Their monthly payroll stubs or payroll reports.
These should be enough for an organization to produce a forgiveness document, but there’s no guarantee that this document will be accepted. However, it should be noted that lenders have a vested interest in getting the loans forgiven as well, as this means they get paid back with certainty.

The PPP loan has been a little questionable from the start, because there has been so little guidance for lenders. Many lenders started processing the PPP loans themselves even before they were certain what the requirements would be. Unfortunately, those who have already acquired a PPP loan may be left somewhat adrift until lenders come forward with their forgiveness requirements. Organizations that are waiting to get their loans forgiven should inquire with their lenders as soon as possible.