Government’s Response to COVID-19 – March 18, 2020

We continue to monitor news regarding the government’s response to the COVID-19 outbreak and want to keep you updated on what we know now.

    1. The US House of Representatives has passed HR 6201 which, in general terms, includes provisions for Employer credits related to costs of paying employees for sick leave, family medical leave, and related costs of “qualified health plan expenses”. The sick leave credit for each employee would be equal to his/her wage, limited to $511 per day while the employee is receiving paid sick leave to care for themselves or $200 per day if caring for a sick family member or child whose school is closed. Late in the day today, the Senate passed this bill so it can be presented for signature by the President.
    2. Yesterday, March 17, Treasury Secretary Mnuchin, along with President Trump, held a White House briefing in which he stated that if a taxpayer owes a payment to the IRS for 2019 personal income taxes, they are able to defer that payment for 90 days without penalty or interest.

The filing deadline for 2019 personal taxes, however appears not to be extended. Taxpayers are still expected to file by April 15th or file an extension. Also mentioned in the briefing was that taxpayers are able to file an extension, so it is our expectation that the extension still allows for the deferral of the 90 days for payment. Secretary Mnuchin encouraged Americans who can file their taxes, to file them by April 15th in order to take advantage of the refunds that many Americans will receive.

  1. Indiana Department of Revenue continues to monitor the Internal Revenue Service (IRS) regarding possible changes to filing and payment due dates, and appears prepared to follow suit. As of now, there is no word on if every state will follow the IRS in deferring payment. We will keep you updated as we learn more.

Our office continues to be open and operational. We have transitioned most employees to working remotely. We have a small team working at our office to handle drop-offs and pick-ups as needed. We are absolutely able to answer telephone calls and emails. Please do not hesitate to reach out to us.

Our feeling is that given the uncertainty in the business world, there is risk around the banking system. You may know that direct deposits to employees work on a two-day float within a national clearing system. We are recommending paying employees with paper checks because they can be deposited or cashed by employees without being exposed to this system.

In other words, if your money is floating in this national system when a banking liquidity event occurs (cash supply locks up), your employees may not be paid and your money would be locked in the system. So, we are encouraging all clients to use paper checks until things seem more stable. That is what we are doing with our payroll.

We are recommending our clients minimize the amounts they are exposing to the national clearing system.

IF CLIENT SAYS –

“That sounds like BS and you’re just protecting yourselves….”

RESPOND –

“Yes, that is important to us, too. But, we are also going to use paper checks for our employees for the time being.”