Your Friends that Count

During the COVID-19 Pandemic, the federal government has initiated several programs that have altered the qualifications for federal unemployment as well as the range of benefits. The three most significant changes can be categorized as the Federal Pandemic Unemployment Compensation (FPUC) program, the Pandemic Emergency Unemployment Compensation (PEUC) program, and the Pandemic Unemployment Assistance (PUA) program. Please see the following information regarding FPUC’s and PEUC’s expansion of benefits, as well as PUA’s special eligibility guidelines.

As we previously noted in our Coronavirus Aid, Relief, and Economic Security (CARES) article, the Act provides for a temporary emergency increase in unemployment compensation benefits, referred to as the FPUC program. FPUC provides an additional $600 per week payable to all individuals who are eligible for unemployment benefits for weeks beginning March 29, 2020 and ending July 31, 2020. Eligible individuals receive FPUC payments at the same time as their unemployment payments. (FPUC payments are disregarded when determining the amount of income under Medicaid or SCHIP.) IDES will include FPUC when preparing the 1099G tax documents and must withhold taxes from the weekly benefit amount and from the $600 FPUC if an individual elects to have taxes withheld.

Individuals who have received their entire 26 weeks of unemployment benefits may be eligible for more weeks under the CARES Act. PEUC provides up to 13 additional weeks of federally funded unemployment benefits for individuals who have exhausted their regular benefits.

For individuals who are unemployed for reasons attributable to COVID-19 and not covered by the state’s regular unemployment insurance program, the PUA program provides 100% federally funded unemployment. To establish eligibility under PUA, the claimant will have to demonstrate he/she is not eligible under the regular program. Applying for and being denied benefits under the regular program can help establish eligibility under the new temporary program. PUA benefits do provide coverage for self-employed sole proprietors and independent contractors. IDES is contracting with Deloitte to implement and maintain a web-based solution for PUA fully implemented by the week of May 11.

Special Notes

Based upon the additional $600 provided through the CARES Act employees making $50 thousand per year or less should have no financial impact being laid off. As always, claimants must certify every two weeks that they are able and available to work, and if they refuse to go back to work, they are no longer eligible for unemployment benefits, including the FPUC enhancement. Additionally, any businesses hiring new employees are required to report.

Now is a good time to consult a tax professional to best determine how the law affects your unique situation. John Kasperek Co., Inc. is a leading expert accounting firm in the Chicago Southland region and can be reached at (708) 862-2262 or email This email address is being protected from spambots. You need JavaScript enabled to view it..

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Last week, Your Friends that Count reviewed our Frequently Asked Questions related to the federal government’s passing of the CARES Act stimulus legislation. As a follow up to our numerous inquiries from individuals and employers related to the previously approved Families First Coronavirus Response Act, here is a deeper dive into what FFCRA means for our clients.

FFCRA requires certain (most) employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. The Department of Labor’s Wage and Hour Division (WHD) administers and enforces the new law’s paid leave requirements. These provisions were signed into law March 18, 2020, and will apply through December 31, 2020.

Generally, the FFCRA provides that employees of covered employers are eligible for:

• Two weeks (up to 80 hours) of paid sick leave at the employee's regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; OR
• Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee's regular rate of pay because the employee is unable to work to care for an individual subject to quarantine (pursuant to Federal, State, or local government order or advice of a health care provider), or to care for a child (under 18 years of age) whose school or childcare provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified DOL and IRS; AND
• Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee's regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or childcare provider is closed or unavailable for reasons related to COVID-19.

Are there employer exemptions and credits?

The paid sick leave and expanded family and medical leave provisions of the FFCRA apply to certain public employers, and private employers with fewer than 500 employees. Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or childcare unavailability if the leave requirements would jeopardize the viability of the business as a going concern.

Eligible employers may receive a refundable sick leave credit or childcare credit based on the paid leave calculations. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

Eligible employers who pay qualifying sick or childcare leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and childcare leave that they paid, rather than deposit them with the IRS. The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees. If there are not sufficient payroll taxes to cover the cost of qualified sick and childcare leave paid, employers will be able file a request for an accelerated payment from the IRS. The IRS says it will process these requests for refunds in two weeks or less.

Who are the eligible employees?

All employees of covered employers are eligible based on the aforementioned criteria for quarantine, diagnosis, family care and childcare (with alternate benefits). Employees employed for at least 30 days are eligible for up to an additional 10 weeks of paid family leave to care for a child under certain circumstances related to COVID-19. A full-time employee is eligible for full 80 hours of leave, and a part-time employee is eligible for the number of hours of leave that the employee works on average over a two-week period. For employees caring for a child whose school or childcare provider is closed or unavailable for reasons related to COVID-19, a full-time employee is eligible for up to 12 weeks of leave (two weeks of paid sick leave followed by up to 10 weeks of paid expanded family and medical leave) at 40 hours a week, and a part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period. Remember, there is an exemption for this requirement if the employer has fewer than 50 employees.

What is the calculation of pay?

• Employees taking leave due to quarantine or doctor’s orders are entitled to pay at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a 2-week period).
• Employees taking leave to care for someone under quarantine are entitled to pay at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 in the aggregate (over a 2-week period).
• Employees taking leave due to childcare issues related to closures are entitled to pay at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 in the aggregate (over a 12-week period).

Now is a good time to consult a tax professional to best determine how the law affects your unique situation. John Kasperek Co., Inc. is a leading expert accounting firm in the Chicago Southland region and can be reached at (708) 862-2262 or email This email address is being protected from spambots. You need JavaScript enabled to view it..

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As we navigate our new “normal” during this time of social distancing, both the state and federal government have moved quickly with legislation intended to both battle COVID-19 and to infuse resources into our economy. These new laws impact all of us in one way or another whether we are hospitals, schools, big business, small business, employees, job seekers, or students. After much deliberation over the stimulus package in Washington over the past few weeks, President Trump recently signed into law the Coronavirus Aid, Relief, and Economic Security Act, (CARES Act), a $2 trillion bill to mitigate the economic impact of this pandemic.

Who will receive and payments?

The CARES Act includes stimulus payments of $1,200 for each individual and $500 for each dependent child, defined by the child tax credit rules as under age 17.

• Individuals with adjusted gross income (AGI) up to $75,000 a year are eligible for the full $1,200 payment. The payment is reduced by $5 for every $100 in income above $75,000. The payment amount is entirely phased out at an AGI of $99,000.
• Married filing joint couples with AGIs up to $150,000 a year are eligible for a $2,400 payment. The payment is reduced by $5 for every $100 in income above $150,000. The payment amount is entirely phased out at an AGI of $198,000 (if the taxpayers have no dependent children). Married couples also will receive an additional $500 for every dependent child under 17.
• Head of household filers with AGIs up $112,500 a year are eligible for the full $1,200 payment and an additional payment of $500 for each dependent child under age 17. The payment is reduced by $5 for every $100 in income above $112,500. Head of household taxpayers will also receive an additional $500 per dependent child under age 17. With no eligible children, a head of household filer is phased out at AGI of $137,000. With one eligible dependent child, a head of household filer is entirely phased out of the rebate payment at AGI of $146,400.

When Will the Payments Arrive?

The IRS says that a direct deposit should be in your bank account in about three weeks (if your bank information is on file from your 2018 or 2019 return). Checks should start arriving in six to eight weeks.

How Does the Payout Impact My 2020 Tax Return?

The stimulus rebate is actually a 2020 refundable tax credit. If you have less income in 2020 than in 2019 because of layoffs, reduced hours and closed businesses, and your rebate payment was reduced by the income threshold, you’ll receive a credit for the difference on your 2020 return. If for some reason, you receive too much of an advanced payment, you do not have to pay back the excess.

Now is a good time to consult a tax professional to best determine how the law affects your unique situation. John Kasperek Co., Inc. is a leading expert accounting firm in the Chicago Southland region and can be reached at (708) 862-2262 or email This email address is being protected from spambots. You need JavaScript enabled to view it..

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On October 1, 2018, out-of-state retailers who meet certain minimum sales or transaction thresholds will be required to collect and remit the same 6.25% Use Tax (UT) for which Illinois online retailers are already obligated.

Illinois enacted Public Act 100-587 back in June in advance of the expected ruling of U.S. Supreme Court decision South Dakota v. Wayfair, Inc. in which “The Act covers only sellers that, on an annual basis, deliver more than $100,000 of goods or services into the State or engage in 200 or more separate transactions for the delivery of goods or services into the State.” The Illinois law duplicates this language which is applicable to the retailer’s prior 12-months of sales.

So, what does it mean for Illinois tax collections? First, online consumers will realize the 6.25% UT collection on more purchases. Those additional taxes will be remitted to the state and local governments at a rate of 5% and 1.25% respectively. The local government portion is allocated, based on set statutory percentages, first to Chicago, the Regional Transportation Authority, the Madison County Mass Transit District, and to pay Build Illinois bonds, with the remainder remitted to other municipalities and counties based on their relative population as compared to the statewide population. Illinois could realize a $200 million or more annual UT increase, but local government allocations will be smaller, and again, relative to this local/state population ratio.

The recent decisions do not impact the Retailers Occupation Tax (ROT), or traditional sales tax rate applicable to those "engaged in the business of selling tangible personal property at retail" in Illinois. UT is also nothing new, as purchases from Illinois retailers without a physical presence were always subject to the Use Tax. ROT or UT (when no sales tax has been collected on taxable products or services) are paid directly to the Department of Revenue by the purchaser. There is a line on the Illinois Individual Income Tax Return, Form IL-1040.

John Kasperek Co., Inc. is a leading expert governmental consulting firm in the Chicago Southland region. If you have any questions about Public Act 100-587 and what it means for your municipality, call (708) 862-2262 or email This email address is being protected from spambots. You need JavaScript enabled to view it.. 

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