GEORGE JOHNSON & COMPANY
Dear Clients and Friends,
- GJC’s Response to COVID-19 – Office Update
- CARES Act and Employee Benefit Plans
- Coronavirus Strikes Nonprofits
- COVID-19 Federal Aid Package
Employers are scrambling to find ways to help their employees who are impacted by the novel coronavirus (COVID-19). Help is available. Now that the COVID-19 has been declared a national emergency, Internal Revenue Code Section 139 can be used to allow employers to make tax-free payments or reimbursements to employees as “qualified disaster payments.” Below are some frequently asked questions about how employers can use Section 139 immediately to help employees cope with COVID-19.
Q1: What is a “qualified disaster payment”?
A1: Qualified disaster payments are payments that are not otherwise reimbursed by insurance made by an employer to an employee that are reasonably expected by the employer to:
The SECURE Act became law in December 2019 as part of a broader $1.4 trillion spending bill. The SECURE Act, which is the first significant retirement legislation since the 2006 Pension Protection Act, contains many wide-ranging provisions that amend the Internal Revenue Code (IRC) and Employee Retirement Income Security Act (ERISA). BDO’s National Tax Office issued an alert detailing the actions that plan sponsors need to take immediately to comply with the SECURE Act.
- 403(b) remedial amendment period extended to June 30, 2020: The law extends the initial remedial amendment period for 403(b) plans from March 31, 2020 to June 30, 2020. This gives plan sponsors three additional months to update or restate their pre-approved and individually designed 403(b) plan documents. Original instructions for the program, which give plan sponsors the opportunity to fix mistakes in their plan document retroactive to Jan. 1, 2010, can be found here. In keeping with the original provision, the new law doesn’t extend to operational failures.
When employees hear that their company offers a Health Savings Account (HSA), many fail to make the connection to how these tax-advantaged accounts for qualified medical expenses can help them prepare for a successful retirement. But with healthcare being one of the biggest expenses people face in retirement, HSAs can play an important role in creating a healthy retirement plan.A couple retiring in 2019 is expected to spend $285,000 in health and medical expenses throughout retirement, according to Fidelity Investments. For most Americans, it will take years of planning and investing to reach that savings goal. Fortunately, HSAs can significantly accelerate those efforts by offering myriad tax advantages.
On April 9, 2020, the IRS issued Notice 2020-23, which contains expanded relief for those tax forms and other filings that are postponed as was originally announced last month. See the IRS Coronavirus website for more details.
First, the payments and returns eligible for relief are expanded. Any tax return or payment due on or after April 1, 2020, and before July 15, 2020, is now automatically postponed to July 15, 2020-no extension forms, letters, or other forms of documentation or communication are required to make use of this relief. This will now cover, for example, calendar-year 2020 second quarter estimated tax payments, among other things.
Congratulations to Peter Walkuski for passing the CPA exam!
Tiera Taylor was hired under our HBCU (Historically Black Colleges and Universities) Legacy Internship Program. She graduated from Florida Agricultural & Mechanical University (FAMU) with a Bachelor of Science in Business Administration. Tiera anticipates graduating in May 2020.
GJC is an Independent Member of the BDO Alliance USA