Help for Real Estate Agents/Brokers RE: COVID-19
March 30, 2020
To all REBNY Members and the entire Real Estate Agent/Broker Community,
Our firm has dedicated our resources to assisting the Real Estate Agent and Broker community in response to COVID-19 and it’s impacts. We are constantly reviewing federal and local guidance to provide you with the tools to structure your responses in this rapidly changing environment. We want to inform you of the following current developments as they stand today.
Helpful Information for Self-Employed Real Estate Agents
1. Unemployment Benefits – Increased federal benefit of $600 on top of state benefit. Four months of expanded unemployment benefits (increases overall benefit by $600 a week over that period) including those not usually eligible for unemployment insurance, such as the self- employed, independent contractors, gig workers and those with limited work history.
i. Economic Injury Disaster Loan
1. Sole Proprietor – Use form SBA5-C
2. 3 Page application
ii. SBA Express Bridge Loan
1. Up to $25,000
2. Fast Turnaround
3. Will be repaid by the SBA EIDL loan above
i. Small Business Continuity Loan Fund
iii. 25% decrease in revenues need to be demonstrated
3. Social Security Payments Due for Self-Employed Individuals – Self-employed individuals may defer 50% of their Social Security taxes that are incurred beginning March 27, 2020 through December 31, 2020. The payment may be deferred into equal installments due on December 31, 2021 and December 31,2022.
4. Retirement Accounts – Waives the 10 percent early withdrawal penalty on retirement account distributions for taxpayers facing virus-related challenges. Withdrawn amounts are taxable over three years, but taxpayers can recontribute the withdrawn funds into their retirement accounts for three years without affecting retirement account caps.
5. Solo-401K – Loans can be taken up to $100,000 (Increased from $50,000). Prior loans against retirement accounts have been extended an extra year for repayment.
6. Stimulus Payments – Up to $1,200 per person ($2,400 married joint) and $500 per child under 17. Eligibility is based on your 2019 tax filing. (2018 if you have not filed 2019) Key Summary points:
a. Income limits are $75,000 & $150,000, for single and joint returns respectively with a total phaseout at $99,000 & $198,000 (limits increase by $10,000 for each child a taxpayer has). Head of household income limits are $112,500 with a total phaseout at $146,500 with one child.
b. Dependents of another are not entitled to stimulus payments.
c. Payments will be automatically deposited into taxpayer’s bank account that is on file with the Internal Revenue Service in a few weeks.
d.Applies to taxpayers that receive social security, retirement and disability checks, unemployed people and veterans.
e.If a taxpayer does not qualify for a full stimulus payment based on their 2018 or 2019 tax return, they may still be eligible to receive a credit on their 2020 tax return if the taxpayer’s income levels decrease to a level that makes them eligible.
f.In the event the taxpayer’s income increases in 2020 and would result in a lower stimulus calculation, it appears the difference is not required to be paid back by the taxpayer.
g.Children born in 2020 would not be included in the stimulus payment calculation now but would count towards the stimulus credit calculation on the taxpayer’s 2020 tax return.
7. Federal Compliance and Tax Payment Due Dates – 2019 income tax returns and respective payments are due July 15, 2020. There is no cap on the amount of payments that can be postponed. Q1 2020 estimated tax payments are also due July 15, 2020. For now, Q2 2020 estimated tax payments are still due June 15,2020.
8. 2019 IRA & HSA Funding Due Date – The due date is now July 15,2020.
9. Student Loans – Payments are suspended until September 30. Certain employer payments of student loans on behalf of employees are excluded from taxable income. Employers may contribute up to $5,250 annually toward student loans, and the payments would be excluded from an employee’s income.
10. Rent & Mortgage Relief – A temporary, nationwide eviction moratorium is in place. Certain landlords cannot charge any fees or penalties for certain nonpayment of rent for 120 days after bill is passed. Certain federally backed mortgages may not initiate foreclosure for a limited time frame during the current crisis. Certain borrowers may request forbearance from making payments for up to 180 days with the option to request an additional 180 days of relief.
Please feel free to contact me any time. Our firm is devoting significant resources to assist anyone in need of help.