May 13, 2020

COVID-19 Government Relations Summary

The following Daily Summary includes updates on IDES accepting on-line PUA applications and other state updates and IRS information and details on additional COVID-19 Congressional Legislation. Additionally, the legislative leaders announced that the Illinois House and Illinois Senate will return to Springfield and resume the Spring Legislative Session on May 20th through May 22d.  The House will meet in the Springfield Convention Center and the Senate will meet in their chamber at the Capitol.  The Legislative Leaders announced that social distancing protocols will be followed in addition to guidance issued by the Illinois Department of Public Health.  


Illinois Department of Employment Security
IDES Accepting Applications for Pandemic Unemployment Assistance
The Illinois Department of Employment Security (IDES) is accepting applications for PUA. The PUA program is for 1099 Workers who have been impacted by COVID-19.  IDES has expanded its online application bandwidth to accommodate the 1099 population of those impacted. IDES instructions.

Background--Reposting from our May 6th Update
1099 Workers Encouraged to Apply for Regular Unemployment Benefits Before PUA Goes Live
The Illinois Department of Employment Security (IDES) released new instructions for 1099 workers who have lost work due to COVID-19.  Workers who believe they may be eligible for new federal benefits under the Pandemic Unemployment Assistance Program (PUA) must first apply for regular unemployment insurance before applying for benefits under PUA when a new application portal open on May 11, 2020 via the IDES website. 

Illinois Department of Revenue
Informational Bulletins

The Illinois Department of Revenue (IDOR) issued Informational Bulletin FY 2020-22 addressing taxpayers registered for Illinois Withholding Income Tax can electronically file using Form IL-941-X.  Additionally, IDOR issued Information outlining changes to sales and excise tax rates effective July 1st.

Illinois Secretary of State
Business-Related Documents-Paper Filing

The Illinois Secretary of State’s Business Services Division adopted emergency amendments amending previously file emergency rules effective 3/20/20 providing that paper document filings that ordinarily must be approved or disapproved by SOS within 10 days will instead be processed on a first-in, first out basis.  Small Businesses and on-profit organizations required to file documents with SOS are affected by these emergency rules.    Business Corporation Act (14 IAC 150; 44 Ill Reg 7944), General Not For Profit Corporations (14 IAC 160; 44 Ill Reg 7951), Uniform Partnership Act (14 IAC 166; 44 Ill Reg 7956), Uniform Limited Partnership Act (14 IAC 171; 44 Ill Reg 7961), Limited Liability Company Act (14 IAC 178; 44 Ill Reg 7966). Illinois Register.

Scrivener’s Note:  The ICPAS April 29th Gov’t Relations Daily Summary also addressed SOS deadline extensions for business-related documents.


Congress (HEROES ACT)
COVID-19 Related Legislation Introduced in House

The United States House of Representatives introduced additional COVID-19 legislation entitled, the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act-H.R. 6800).  This $3 trillion pandemic relief legislation includes a number of tax proposals impacting business and individuals. 

• Limitation on excess business losses of non-corporate taxpayers permanent, effective retroactively to tax years beginning after 2017.
• Limitation on corporations from carrying back 2019 and 2020 NOLs to years beginning after 2018.
• Expansion and modifications would be made to the employee retention credit that was enacted as a part of the CARES Act
• New payroll tax credit would be made available with regard to certain expenses of employers subject to COVID-19 related closures

• Additional cash payments to individuals

See House Democratic Leadership one page summary.  See also section-by-section summary prepared by the Ways and Means Committee Staff.  Entire legislative text
Internal Revenue Service
PPP-Employee Retention Credit
The IRS updated a list of FAQs concerning the employee retention credit, enacted as a part of the CARES Act.  FAQ #79 clarifies that employers that received a loan under the PPP but opt to repay the loan by the May 14th deadline may claim the employee retention credit after repaying the PPP loan. 

Scrivener’s Note:  FAQ #79 clarifies an uncertainty as outlined in ICPAS COVID-19 Daily Summary (12) dated May 7th  whether the IRS would follow Treasury and SBA’s extension of repayment of the PPP loan for “Good Faith Certification” to May 14th versus the original May 7th Date.

Health Plan Expenses
The IRS revised it previously announced position and, according to new FAQs will not generally treat qualified health plan expenses paid during the furloughed period as qualified wages for purposes of the employee retention credit.  See FAQ’s #64 and #65 and Treasury’s letter to the Senate Finance Committee that guidance would be updated to clarify the treatment of allocatable health plan expenses.
Erroneous Economic Impact Payments
The IRS updated a list of FAQs including instructions for returning Economic Impact Payments. FAQ #41 includes instructions for returning paper check as well as cashed checks or if payment was made via direct deposit.

Expanded Relief for Health-Related Cafeteria Plans
The IRS released advance versions of Notice 2020-29 and Notice 2020-33 as guidance allowing temporary changes to sect. 125 cafeteria health plans.  Generally, these notices extend the claims period for health flexible spending arrangements and dependent care assistance programs and, allow taxpayers to make mid-year changes.