KNOXVILLE, Tenn. (WATE) — Since late March, the COVID-19 crisis shut down millions of businesses across the country, forcing millions of people to temporarily lose their jobs. As many know, the federal government has stepped in to assist those out of work and help business owners.
On Tuesday, WATE 6 On Your Side Consumer Reporter Don Dare spoke with a tax expert about the implications of federal relief programs.
The aid programs have several different long names like the $2T CARES Act.
Under the government programs are several aid packages: Stimulus money for individuals, the Paycheck Protection Program for Small Business Owners, and loan programs to businesses.
It takes an expert to figure all this out because as a country, this is all-new financial territory.
Over the last month, income tax specialist Mark Curran has received lots of questions from old and new clients alike about COVID-19 related federal relief programs.
Within the last month, money has been directly deposited into bank accounts of millions of taxpayers and businesses have also received money.
Curran says that the CARES Act is basically the economic stimulus for individuals and the PPP and expanded EIDL for businesses.
“The government’s purpose was to get money in the hands of businesses and employees quickly. They did that. It the fastest I have ever seen our government move to this effect. These are all the PPP applications we have filled out the last few weeks for our clients.
The EIDL (Economic Injury Disaster Loan) is what we call it in the industry, it is basically the second part of the business funding. It is money in addition to the PPP that businesses can use to cover their expenses while business in down, or shut down by the government.”Mark Curran
WATE asked about the stimulus checks taxpayers are getting, that new money will not be taxed, but there will be financial implications.
“The stimulus checks that individuals and married couples and their dependents are getting is an advance of the 2020 tax credits. So, therefore your 2020 return could be reduced by the amount you received in the stimulus package.”Mark Curran
If you are eligible to receive aid under the CARES Act read below:
“The biggest piece of advice I can give is to get in and get in quick. You have to be in the front of the line of this thing or you are going to miss the boat. Get in there early. Contact your bank is where you need to start, and then if you have a tax professional to help you out, they can provide the information to the bank.”Mark Curran
Some other things to consider:
- For those who have individual retirement accounts and are required to take out a minimum distribution or RMD, there is a waiver on that requirement this year. You can keep the money and let it grow.
- Don’t forget the IRS moved up the federal tax payment deadline to July 15. So, if you haven’t done so, you have another three months to file your individual tax return.
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