Each member of the International Wealth and Asset Planning Group at Greenspoon Marder LLP sincerely hopes that you and your loved ones have remained, and will continue to remain, safe and healthy in these unprecedented times.
In this Client Alert, we first briefly discuss how potential litigation may arise during this emotionally-charged period. We then summarize a few of the federal developments that have been initiated over the course of the past few weeks.
I. Potential Litigation During Times of Crisis
During times of crisis, emotions run high. Individuals are concerned with the health and well-being of their families, friends and loved ones. Decisions during stressful times tend to be more impulsive as opposed to giving careful thought before acting. As clients of the International Wealth and Asset Planning Group, you already know that our recommended asset protection strategies are implemented with a view toward the future. That is, we place great value protecting one’s assets at a time when the creditor seas are calm as opposed to waiting until it is too late.
During this highly-charged time, individuals may become more litigious for a litany of reasons (e.g., fear, anger, desperation, etc.) As a result, an increased amount of creditor threats could potentially arise during this period. Should you become subject to a creditor threat, or if one becomes reasonably anticipated, please be sure to let us know as soon as possible so we can review and advise you accordingly. Similarly, if you wish to discuss your current estate planning documents to see if they presently align with your goals, feel free to contact us at your convenience. We are here for you.
II. Government Programs/Incentives Currently Being Offered
A. Small Business Association Loans
On March 11, 2020, President Trump directed the Small Business Administration (SBA) to offer Economic Injury Disaster Loans (EIDLs) to small businesses and private non-profits impacted by COVID-19 under the authority of H.R. 6074 that allows SBA to provide an expected $7 billion in EIDLs. The low-interest loans are designed to provide economic support by aiding small businesses in overcoming temporary losses of revenue due to COVID-19.
The EIDLs offer up to $2 million in assistance and can provide economic support to small businesses to help overcome the temporary loss of revenue that they are experiencing. Such loans may be used to pay fixed debts, payroll, accounts payable and other bills that cannot be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%.
The deadline to apply for an EIDL is December 18, 2020.
B. Internal Revenue Service Related Deadline Extensions
1. Treasury Secretary Steven Mnuchin announced that his department is pushing back the April 15 deadline to pay taxes owed for many individuals and businesses, giving them 90 extra days to send checks to the government. Individuals can defer up to $1 million of tax liability and corporations get an extension on up to $10 million in tax liability. Secretary Mnuchin said the delay will free up $300 billion of liquidity in the economy as individuals and businesses have more time to pay their taxes.
Delaying payment requirements will give businesses and individuals nearly three more months to meet their IRS obligations, potentially lessening cash-flow issues that some businesses are facing as many people stay home and spend less money on dining out, entertainment and transportation.
2. On March 20, 2020, President Donald J. Trump announced that the Internal Revenue Service is extending the deadline to file individual tax returns from April 15, 2020 until July 15, 2020.
3. On March 24, 2020, the Treasury Department confirmed that the filing deadlines for estate tax returns (Form 706) and gift tax returns (Form 709) have not been extended. Therefore, be aware that if you have a gift tax return due during 2020, you still need to file it by April 15, 2020 (unless otherwise extended).
C. Emergency Paid Sick Leave
President Trump has signed the Families First Coronavirus Response Act (the “Act”), which includes provisions for emergency paid sick leave and emergency paid family and medical leave for eligible employees who work for employers with 500 or fewer employees. The Act, which will become effective on April 2, 2020, will remain in effect through December 31, 2020.
The Act’s paid sick leave component provides for up to 80 hours of paid sick leave if the employee:
1. is subject to a federal, state or local quarantine or isolation order;
2. has been advised by a healthcare provider to self-quarantine;
3. is experiencing symptoms of COVID-19 and is seeking a diagnosis;
4. is caring for an individual covered by (1) or (2) above;
5. is caring for a son or daughter whose school or place of care has been closed or whose childcare provider is unavailable due to COVID-19 precautions; or
6. is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
Full-time employees are entitled to 80 hours of paid sick leave paid at their regular rate of pay, capped at $511 per day; part-time employees are also entitled to leave based upon their average hours worked in a two-week period. If employees are taking the leave to care for family members, they are entitled to only two-thirds of their regular rate of pay, capped at $200 per day.
It is important to note that all employees are immediately eligible for this leave, regardless of how long they have been employed. The paid sick leave does not carry over from one year to the next.
Sick leave is in addition to any other paid leave available to employees, and they may choose to use this emergency paid sick leave before using any other types of leave. Employers may require notice of the use of leave after the first workday (or portion thereof) that an employee receives paid sick time under the Act.
The bottom line is that while the “new normal” does not exactly feel “normal” right now, we will get through these trying times together. All of us here at Greenspoon Marder LLP’s International Wealth and Asset Planning Group remain committed to being available to address your legal needs. Stay safe and be well.