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| U.S. and Israeli Coronavirus Tax Updates from Deutsch & Associates

anglomedia    
Friday, 24 April 6:21 PM


02-999-2104, 03-527-3254, 09-746-0623
Cellular: 052-274-9999   Fax: 077-318-2343   Email: info@ardcpa.com   Website: www.ardcpa.com

U.S. and Israeli Coronavirus Tax Updates
from Deutsch & Associates

FOR DISCUSSION PURPOSES ONLY

These materials are subject to change based upon new interpretations and new information being released.


U.S. Coronavirus Tax Updates

1. Stimulus Payment

In an effort to assist individuals, businesses, and the general US economy, the US government will be distributing stimulus payments to those who hold a US Social Security number (including most US citizens living abroad).

An individual will be eligible to receive $1,200. A married couple will be eligible to receive $2,400. Families will be eligible to receive an additional $500 for each child until the age of 16.

The payment will begin to phase out for individuals who's AGI (adjusted gross income) is more than $75,000 (or $112,500 for those who filed as head of household), and married couples whose AGI is more than $150,000.

Individuals whose AGI was more than $99,000 and married couples whose AGI was more than $198,000, will not be eligible for the rebate check.

The IRS will determine the AGI based upon the taxpayer's 2019 tax return, or his/her 2018 tax return if the 2019 tax return hasn't yet been filed.

There is indication that US citizens filing with either a spouse or dependents with ITINs, will not be eligible for the stimulus payment, at all. 

This payment is not taxable and will not be required to appear on your 2020 tax return.

Those who received a refund via direct deposit in 2018 or 2019 will have the refund directly deposited into their US bank. Otherwise, the refund will be sent in the form of a check to the address listed on the return.


Taxpayers can update their US bank information at the  IRS’s Get My Payment app. Please note that there have been many reported glitches with this app, especially for those entering a non-US address. Please be patient as the IRS addresses the issue.

If your address has changed since filing your 2018 or 2019 tax return and you expect to receive the refund as a check, please arrange with your local post office for your mail to be forwarded to your new address.

Those who did not have a US tax filing obligation in the 2018-2019 tax years (including dependents not listed on their parents' return), may be eligible to receive the US stimulus payment. The IRS can be updated with the non-filer's information at this link. Please be in touch with our office to check if this applies to you or your family member.

Please note that there are many reported stimulus payment scams. 

The IRS will never call or email you for information. The IRS communicates with taxpayers via mail only.

2. Federal 2019 Due Date Extended

The due date for 2019 federal tax returns has been extended until July 15, 2020. The due date of state tax returns are determined by each state. Please see this link for the various state tax return due dates: .

 

3. Interest & Penalties Due on 2019 Taxes Due Postponed

Interest and penalties on 2019 taxes due will start accruing from July 16, 2020 and on, instead of from April 16, 2020. Please note that this measure does not apply to 2018 and prior years' tax returns.

 

4. First Quarter Estimated Payment Postponed

The first quarter estimated tax payment is now due July 15, 2020 instead of April 15, 2020. Please note that the current due date for second quarter estimated tax payments has not changed and is still due June 15, 2020.


5. US SBA Loans/Grants

Small businesses with an Employer Identification Number (EIN), which are located in the US, are eligible to apply for a loan/grant. See this article from the AICPA for more details. 


Please be in touch with Alan directly at alan@ardcpa.com if you have any further questions on this topic.


Israeli Coronavirus Tax Updates

Below is a general summary regarding the tax updates and financial relief, which are most important to employees and business owners in Israel in light of the corona crisis.

Please note that the government authorities are continuing to release updates regarding the matters below. As such, in order to stay updated, we recommend tuning in to the latest news broadcasts.

 

State Guaranteed Loans: As a result of the coronavirus outbreak, Israel decided to offer guaranteed loans in order to assist businesses that are experiencing cashflow difficulties due to the effects of the virus. The loan amount is up to half a million NIS or up to 8% of the last annual turnover, whichever is higher. Repayment of up to five years with the possibility of deferring the principal payments for up to six months. The submission process is simple and convenient. We are happy to assist. Please contact us for more details.

 

Reducing Bituach Leumi and Income Tax Advance Tax Payments: If you feel that the current pre-payment is too high, please contact us to apply for a lower pre-payment. It should be taken into account that the decreased payment should be based on real expectations of a decrease in annual taxable income; and that if the final tax / Bituach Leumi payment for the year is higher than the amount of the pre-payment paid, then the difference will be charged at 4% interest + linkage.

 

Foreclosures and Payment Arrangements during the Crisis Involving Bituach Leumi: The Bituach Leumi stated that no new foreclosures will be imposed during this period and that there will be no proactive enforcement action. It is also expected that Bituach Leumi payments in April 2020 (for March) will be postponed.

 

Extension for the 2018 Income Tax Return and Capital Asset Reports (Hatzharot Hon): The extension is currently until April 30, 2020, and only applies to anyone who previously had an extension until March 31, 2020.

 

VAT on Expenses: A copy of a receipt (as opposed to an original) can be used to deduct VAT for transactions executed from March 1, 2020 to May 31, 2020

 

Municipal Taxes: Some municipalities and local authorities have declared the municipal property tax delays for March - April. We recommend checking with your local authority in place of your business.

 

Extension for the Bi-monthly VAT Reporting and Payment: Bi-monthly VAT reports for January and February 2020 may be reported and paid until May 18, 2020.

 

Shortening the qualifying period for unemployment benefits after going on unpaid leave to six months instead of twelve months. In general, entitlement to unemployment benefits is achieved after accumulating 12 working months out of the 18 months preceding the unemployment period. The new relief enables accruing 6 months of work instead of 12 months of work. The months do not have to be continuous and can be from a number of employers.

In general, most self-employed are not eligible for unemployment benefits, but in some cases are eligible for a special income allowance. See below for more details.

 

Extension for Tax Withholding Certificates (Ishur Nikui Mas Bamakor): Approvals that were expected to expire on March 30 have been extended until April 30.

 

Extension for "Teum Mas": Certificates which expired at the end of 2019 are extended until the date of salary payment for May 2020 and no later than June 23, 2020.

 

Continuity of Pension Coverage during an Unpaid Vacation Period: Many of the salaried employees who went on unpaid leave were concerned about the potential damage to their insurance coverage during this period. Please note that the pension fund policy stipulates a five-month automatic insurance extension from the date on which deposits were terminated. After that, if necessary, the insurance period can be extended for an additional period of up to two years from the time the deposits were stopped.

 

Update Regarding the Unemployment Benefit Claim Pocess in Light of the Corona Crisis: The procedure can be done in two simple steps: First, you need to register with the Employment Service (Shreut Hata’asukah) website and file an unemployment benefit claim online. Second, is to make sure the employer has submitted Bituach Leumi Form 100.

 

Rehabilitation grant for independent business owners affected by the corona crisis of approximately 6,000 NIS. 

The government authorities are close to approving a second installment of the grant which will also include eligibility for incorporated business owners.

 

Tuition: Parents do not have to pay for kindergarten / school / after hour activities during the period in which the institution is closed.

In accordance with the ruling, in the absence of service - there is no payment. This means that parents do not have to pay for frameworks for which a closing order has been issued.

 

Emergency Regulations Regarding the Extension of Validity and Deferral of Regulatory Approval Deadlines:
Among the approved regulations:

  • Licenses for running a business in all local authorities will be automatically extended.

  • Licenses for running a business giving services to government offices will be automatically extended (firefighting permits, Ministry of Health, environmental protection and more).

  • Import certificates will be renewed automatically.

Please be in touch with Elie at elie@ardcpa.com if you have any further questions on this topic.

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Alan (Avraham) Deutsch is a CPA from New York. He has a BS in accounting from New York University, a MS in Finance from New York University, and a Post-Masters in Taxation from Pace University. Alan totals more than 35 years’ experience working for the largest U.S. and Israeli CPA firms and established his own tax practice 25 years ago.  Together with his staff and associates of U.S. and Israeli CPAs, Alan specializes in U.S. and Israeli income tax planning and compliance as well as investment consulting. He is a member of the New York State Society of Certified Public Accountants, the American Certified Public Accountants, and the Society of Trust & Estate Planners. He and his family made Aliyah in 1993.  He lectures frequently in the U.S. and Israel, and his articles appear in various publications. Alan has four office locations and can be reached at 02-999-2104, 03-527-3254, 09-746-0623 or 052-274-9999, or you can e-mail him at alan@ardcpa.com. Please visit his website at www.ardcpa.com for more information.


         
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