News and Analysis
Late last week, the IRS and U.S. Department of Labor announced that employers subject to the Families First Coronavirus Response Act (FFCRA) will be eligible for two new refundable payroll tax credits that will “immediately and fully reimburse them” for complying with its paid leave mandate. Analysis by HR Dive says the credits are designed to grant 100% reimbursement for paid leave pursuant to the FFCRA, and that health insurance costs are included in the credit. Read the article. 3/25/2020
The U.S. Treasury Department has pushed back the April 15, 2020 tax payment deadline by 90 days. Specifically, individuals can defer tax payments of up to $1 million for 90 days, while corporations can defer up to $10 million of tax payments for 90 days. However, there is no extension for the April 15 filing deadline. See this summary from OMA Connections Partner GBQ Partners, as well as this guidance from CliftonLarsonAllen.
Also, the IRS has published this site for coronavirus-related tax guidance. 3/19/2020
On Thursday, Lt. Gov. Jon Husted announced that the U.S. Small Business Administration (SBA) has qualified Ohio for the Economic Injury Disaster Loan program. As a result, Ohio businesses that have been economically impacted by the COVID-19 outbreak may now apply for a low-interest loan of up to $2 million to help pay for fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact.
Businesses can apply for the loan online, which is recommended, or by calling (800) 659-2955 to have an application mailed. To expedite the application process, applicants should have copies of their most recent federal income tax return and a completed and signed IRS Form 4506T, which authorizes the release of tax information. Also have handy a schedule of liabilities, personal financial statement, monthly sales figures, a current year-to-date profit-and-loss statement, and a year-end profit-and-loss statement and balance sheet for that tax year — if the most recent federal income tax return has not been filed.
Here’s guidance from OMA Connections Partner Roetzel. 3/19/2020
OMA Connections Partner Huntington National Bank has announced it will offer payment deferrals of up to 90 days for consumers and small businesses facing pandemic-related financial problems. Such deferrals will not lead to any negative credit report impacts. The bank is also working directly with governors’ offices to facilitate a disaster declaration from the SBA for businesses to be eligible for federal Economic Injury Disaster Program loans. 3/18/2020
Ohio’s combined state and local income tax collections per capita are 16th highest in the nation, according to a revised report from the Tax Foundation. As of FY 2017 (the latest year available), state and local income taxes in Ohio were $1,207 per person, not much more than the U.S. average of $1,198. However, collections varied widely from state to state, ranging from $2,877 per person in New York to zero or nearly zero in nine states. 3/10/2020
Ohio does not fare well in WalletHub’s new comparison of state and local tax rates. The financial website compared the tax rates of the 50 states and D.C. — and their impact on the U.S. median household — and found Ohio was the 44th most expensive. According to the study, Ohio’s effective state and local tax rates on the U.S. median household is 13.14% — or $7,962 — roughly 22% more than the U.S. average. 3/11/2020
On Thursday, Ohio’s Office of Budget and Management released preliminary February 2020 revenue data, showing the state’s total General Revenue Fund tax receipts finished the month $111 million (7.2%) above estimates. Fiscal-year-to-date tax receipts through February exceeded estimates by $249 million (1.6%) and were more than $475 million (3.1%) over total tax receipts through the same period last fiscal year. 3/5/2020
The latest “Manufacturing Minute” — published by OMA Connections Partner GBQ — contains an update on state and local income tax nexus as affected by the U.S. Supreme Court’s ruling on South Dakota v. Wayfair. The publication also contains information regarding ESOPs, new lease accounting guidance, and accounting for indirect job costs. 3/2/2020
Ohio’s Unemployment Insurance (UI) Trust Fund — funded by employers — has the fifth worst solvency rate in the nation, according to a newly revised report from the U.S. Department of Labor. It’s estimated the fund could pay for just four months of benefits during a recession. Even without a recession, the fund could be broke by 2025.
While Ohio’s UI system is paying out more than it takes in, a temporary freeze on benefits was allowed to expire on Jan. 1. 3/2/2020
Earlier this month, Sens. Michael Rulli (R-Salem) and Sean O’Brien (D-Bazetta) introduced Senate Bill 257, designed to make Ohio — and particularly the Mahoning Valley — the nation’s leader in the electric vehicle revolution. The bill would create two different tax credits:
- A sales tax credit for the purchase of an electric vehicle; and
- An income tax and commercial activity tax credit for the purchase and installation of a charging station for an electronic vehicle.