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COVID-19 Statement

Last Updated April 2, 2020

We remain operational and available for our existing clients, visitors, and our communities during the COVID-19 pandemic and through the measures implemented to combat it. Review the resources available on this page. If you know of or would like to see a resource not yet listed, please email us. If we can help you in any manner, please contact us. In the interim, sign up for our COVID-19 updates or attend one of our webinars. Please exercise caution, be safe, and remain healthy.

COVID-19 RELATED NEWS

1 April 2020 - Nick Vogel authored an article on business interruptions and insurance policies

31 March 2020 - Utah Governor's Office of Economic Development opens its Small Business Bridge Loan.

The COVID-19 Economic Injury Disaster Loan Application is live. For more information, please view our CARES Act segment on this page.

27 March 2020 - CARES Act is signed into law. We will digest and update.

25 March 2020 - For employers, you should post and distribute this notice under the Families First Coronavirus Response Act.

24 March 2020 - Our firm will be working to provide continued resources for businesses affected by COVID-19. Stay tuned . . .

23 March 2020 - Although our firm will operate "remote only" for the near future, we remain completely accessible for our existing and prospective clients.

20 March 2020 - On Thursday, March 26, 2020, our principal attorney, Charles Lee Mudd Jr., will join Claire Bernier and Anette Beebe in co-hosting a webinar on resources and strategies for small firms in the COVID-19 environment.




We recognize the anxiety and stress that many will experience during the COVID-19 pandemic and the effects it will have on our lives in the near future. We also want all of our clients, prospects, colleagues, and friends to be safe. For these and other reasons, Mudd Law has implemented policies to ensure uninterrrupted availability and service while respecting the recommendations from health organizations. We also created a COVID-19 Response Team to address specific items.

Mudd Law remains fully operational. Our attorneys, staff, and their families remain healthy. Our communication systems and means of contacting firm members by phone, email, and websites remain active and functional.

Effective immediately, however, we have suspended in-person meetings with clients, prospects, colleagues, and other outside parties. At the same time, we shall utilize virtual meeting services to fill any void. Specifically, we can neet with clients virtually through the Zoom platform. We will continue to conduct interviews for our open positions through the Spark Hire video interviwing platform, provided by one of our clients.

For any parties seeking legal counsel, we remain available to discuss your situation through email and phone. To do so, you can still contact us through the our regular contact channels and request to schedule an appointment.

Additional details will be made available on this page in relevant sections. Please be safe, act smart, and remain healthy.

We will continue to add information about CARES Act as we work our way through the text.





Charitable Contributions
I want to contribute to organizations to help in thia COVID-19 Pandemic. Are there any changes to charitable contributions?

Yes. For those who do not itemize their deductions, the CARES Act provides for an above-the-line deduction for qualifying deductions in an amount not to excedd $300.00.

Additionally, individuals who itemize deductions may deduct qualifying cash contributions (under 26 U.S.C. § 170) so long as the total of such qualifying cash contributions does not exceed the excess of the individual's adjusted gross income over the amount of all other charitable contributions allowed. Previously, one would need to use 50% of the individual's gross income in calculating the excess.

For a corporation, the limit on charitable contributions has been increased to the excess of 25% (from 10%) of the corporation's taxable income over all othe charitable contributions.

To exercise any of the foregoing options, the charitable contribution must be in cash and the taxpayer must elect to exercise the application of the section (CARES Act § 2205).

Can I contribute food?

Taxpayers in the trade or business of food may contribute food product as a charitable contribution. For 2020, the limit has been raised from using 15% of aggregate net or taxable income (depending on the legal status of the business) to 25%. CARES Act § 2205(b); 26 U.S.C. § 170(e)(3)(C).

Educational Assistance
The CARES Act amends Section 127 of the Internal Revenue Code (26 U.S.C. § 127) to include payments of student loan interest or principal by an employer on behalf of an employee. The payments can be made directly to the employee or to a lander. Under § 127, the employee does not need to include the payments or benefits received in calculating gross income. However, under § 127, the payments must be part of a written employer educational assistance program. Section 127 also imposes limitations on the amount of contributions for the benefit of any single employee and the total amount that can be paid for a shareholder or owner of the employer. CARES Act § 2206; 26 U.S.C. § 127.
Loan Applications - SBA Short Form
Is there a short form application for a loan through the U.S. Small Business Administration?

Yes. Although it states you may need more than two (2) hours to complete, it should not take you that long if you come prepared.

You can see the questions asked on page one, page two, page three, page four, and page five of the application.

As the SBA indicates, a credit pull on the business and individuals may occur. Additionally, you provide authorization for the SBA to obtain verification from any applicable sources. Finally, you likely will be requested to supplement the information with documentation.
Loan Applications - Utah GOED Bridge Loan
What is the Utah Governor's Office of Economic Development Small Business Bridge Loan Program and where do you find the application?

The Utah Governor's Office of Economic Development has made between $5,000 and $20,000 (not to exceed three months of operating expenses) available to small businesses in good standing who were (a) established and licensed before January 1, 2020 and (b) paid W-2 wages. The business must provide evidence of losses. The loan will be at 0% interest for 60 months with payments deferred for 12 months. Additional documentation will be required. More information is available
Retirement
For all of these questions, you should seek specific advice from your employer, manager of the retirement account, financial advisor, accountant, or legal counsel on your specific circumstances.

Can I withdraw funds from my retirement as a distribution without a penalty?

Only certain "qualified individuals" may withdraw "coronavirus related distributions" in an amount of no more than $100,000 from qualifying retirement plans between January 1, 2020 and December 31, 2020. Specifically, individuals (a) diagnosed with SARS-CoV-2 or coronavirus disease 2019 (COVID-19) by a CDC approved test; (b) whose spouse is so diagnosed; or, (c) who suffer specific adverse financial circumstances related to such diseases (e.g. arising from being quarantined, furloughed or laid off; having work hours reduced; being unable to work due to lack of child care caused by the disease; or, closing or reducing hours of a business owned or operated by the individual; or other means identified by the Department of the Treasury).

Do I need to report coronavirus related distributions as income?

You can choose to have any amount required to be included as gross income spreadk over three (3) taxable years.

Can I withdraw funds from my retirement account as a loan?

For 180 days following March 27, 2020, the CARES Act increases the maximum amount of funds that can be withdrawn from a qualifying retirement plan without being considered a distribution. At its highest, this amount has been increased to $100,000. However, if the present value of the nonforfeitable accrued benefit falls below $100,000, the maximum amount will be $10,000 or the present value of the nonforfeitable accrued benefit, whichever is higher.

I previously took a loan out from my retirement plan that will be due this year. Will the due date be extended?

For qualifying individuals ONLY, the CARES Act extends the deadline by which to repay a loan from a retirement account by one year. As to being a "qualified individual", individuals will be qualified (a) who have been or become diagnosed with SARS-CoV-2 or coronavirus disease 2019 (COVID-19) by a CDC approved test; (b) whose spouse is so diagnosed; or, (c) who suffer specific adverse financial circumstances related to such diseases (e.g. arising from being quarantined, furloughed or laid off; having work hours reduced; being unable to work due to lack of child care caused by the disease; or, closing or reducing hours of a business owned or operated by the individual; or other means identified by the Department of the Treasury).

Small Businesses
If I request an advance under CARES Act, when do I receive it?

You may request that it be provided within 3 days of your application for such advance. It remains to be seen whether you will receive it within that time frame.

Is there a limit to the advance?

Yes. The limit is $10,000. How will they determine my AGI?

If I reduce my workforce now, will this prevent me from obtaining loan forgiveness on a portion of the SBA loan obtained under CARES related to employee pay?

No. But, you will need to remedy the reduction in the number of employees or reduction in pay on or before June 30, 2020.

Tax Rebates
I heard that I will be getting a check in the mail. Is this true?

The CARES Act provides for a rebate or credit to eligible individuals in the amount of $1200 per person (so, $2400 for a couple filing a joint return). Foremost, the eligibility will be income based. Specifically, the amount of the rebate will be reduced by 5% of the adjusted gross income (AGI) exceeding $75,000 for individuals, $112,500 for heads of households, and $150 for joint returns. Effectivelly, a couple filing a joint return with an AGI of $198,00 or above will not receive the rebate.

However, you should understand that the amount will be treated as a credit to offset your tax liability. So, if you have not yet filed your tax return and previously owed taxes exceeding the amount of the credit, your tax liability will be reduced by the amount of the credit. You will not be receiving a separate check. That being said, if you already filed your tax return and paid your taxes exceeding the amount of your credit, you will receive an overpayment refund.

How will they determine my AGI?

In most circumstances, by looking at your 2019 tax return or, if not filed, your 2018 tax return.

How will the government send me my rebate?

If you are entitled to receive a check, and you previously authorized refunds to be paid to you through direct deposit, it will be sent to you by diret deposit. Otherwise, you will receive a check. But again, this will only occur if you (a) are eligible and (b) you (i) owe less than the credit or (ii) you filed and paud your taxes (and where you paid taxes in an amount less than the credit, your overpayment refund will be less than the total credit because part of it will offset the tax owed).

Unemployment Insurance
If I or my employee had been recently denied for unemployment insurances, has anything changed?
Yes. Depending on your specific circumstances, CARES Act may change your eligibility. For some items, it depends on whether your State entered into an agreement with the federal government. But, CARES Act does allow for unemployment related to COVID-19 even where you may have been denied because you did not have a sufficient work record.
Must I continue to report any income received to the unemployment office?
In applying for and should you receive unemployment compensation, you MUST report any income to the unemployment office. CARES Act provides for penalties to anyone who receives funds to which they are not entitled. It will always be best to be up front and provide full disclosure.
Self-Employed
Does the CARES Act provide for unemployment insurance to self-employed individuals?

Assuming you meet all other requirements, the CARES Act provides for unemployment insurance to self-employed individuals. However, it depends on your state agreement with the federal government. And, you must always report any income received to the unemployment agency.

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