This bulletin is provided by Galitzer & Associates, Ben Tsiyon St 28, Jerusalem.
Benefits for Self-Employed
While the Israel Tax Authority continues to say they will pay self-employed individuals 6,000 NIS, as of the writing of this bulletin no guidelines have been issued. When will that be paid? To whom? How frequently? Will it be taxable as ordinary income? …. So far, all that has been done is to (1) allow VAT tax payments for February to be postponed some seven days; (2) postpone the filing due date for 2018 tax returns and Equity statements to April 30th.
The National Insurance Institute, Bituach Leumi (B”L), has agreed that if a self-employed person needs to, he may ask that the B’L advance tax payment be reduced and such request will be honored. Consequently, we suggest that if you wish to reduce your B”L advance tax payments, מקדמות, that you send an email to Ari@GalitzerCPA.com with your request. If we already have a B”L power of attorney authorizing us to represent you before B”L, he will try to give effect to that reduction or cancellation of your B”L מקדמות . Otherwise he will, בע”ה , send you such form to sign and email back to him in order for him to request such reduction for you.
Mortgage Payments Deferral
The Bank of Israel has announced that it has instructed the banks to allow borrowers to extend or defer mortgage payments for up to four months. If you are interested in skipping mortgage payments, contact your bank. Bank Leumi and Mizrachi-Tefachot and Union Bank ask that you go into their website to file the request. Bank HaPoalim and Bank Discount and the Bank of Jerusalem ask that you call them. Bank Ozar HaChayal asks that you go into your account via the internet and initiate a chat.
The Bank of Israel has also announced that during the Corona crisis bank accounts will not be frozen due to too many checks being returned due to insufficient funds in the account.
United States Relief
The US Government/Internal Revenue Service has announced that all tax returns and tax payments for 2019 and estimated tax payments for 2020 otherwise due initially April 15 will not be due before July 15. FBAR filings already have an extended due date of October 15th. We suggest, however, that if you have your data ready, email or fax the data to us. We are trying to continue office services by remote access while working from home. If you send us a fax, please also call or email us to alert us to the fax having been sent.
Congress passed a law effective April 1 regarding employees discharged temporarily on leave without pay, that we refer to as חופשה ללא תשלום – חל”ת but the US approach is very different than the Israeli approach which we discussed in our previous eBulletin. An employer in the US of fewer than 50 employees will be required to continue to pay employees who cannot go to work and cannot “tele-work” due to school closings or childcare center closings and their having to care for their children at home. Such employers, after having paid the salaries of those employees, will recoup their payment of such salaries dollar-for-dollar as a credit to reduce payroll taxes. Think about it!
Effectively, the government is funding 100% of the salaries with the assistance of the employers who are advancing the funds to the employees so that the employees do not have to wait for their salaries, but after reimbursement it winds up that the Federal government will have paid those salaries in full.
Congress is also expected to sign a joint bill, agreed to by both the House and the Senate on March 25, allocating $2 trillion in various avenues to fight the Corona virus crisis. Part of that Act is expected to increase unemployment insurance benefits by $600 a week for a period of 4 months.
It is also reported by US news sources that the bill would give one time direct payments to Americans of $1,200 per adult making up to $75,000 a year, and $2,400 to a married couple making up to $150,00 with $500 payments per child. The amount of the payments are to be based on income reported on 2018 tax returns or 2019 tax returns if already filed. These payments are to decline gradually for individuals or couples having reported income above those amounts and phase out at a rate of $5 per $100 of adjusted gross income above $75,000 for singles and above $112,500 for a head of household, and above $150,000 of adjusted gross income for a couple filing a joint tax return. Payments are to be deposited directly to the bank account reflected on the tax return for direct deposit of a refund or, otherwise, they are to be mailed to the taxpayer. Payments are said to
be scheduled to be remitted in April. חג שמח