Tax Tips Logo ImageISSUE

There is a lot going “viral” these days that we’ve not seen before.  From a tax standpoint, what measures and/or announcements are out there regarding COVID-19?

 

SITUATION

Idaho Theological Seminary (ITS) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(i).  They are required not to file Form 990 annually.

The Accounting Team at ITS called us to ask about coronavirus legislation, rulings, announcements, etc.

ITS: “There is so much going on, how do we keep up?”

TAX TIPS: “Well, from a tax standpoint, the IRS has setup a special webpage that you need to be aware of.  It is at https://www.irs.gov/coronavirus and is being kept up to date regularly.”

ITS: “What are they telling us?”

TAX TIPS: “They note that Notice 2020-15 has been released.  This three-page notice clarifies that High-deductible health plans can cover coronavirus costs.  Also, the page has links to Centers for Disease Control and Prevention (CDC) and Treasury Department resources on the virus.”

ITS: “Are we hearing anything from the Department of Education?”

TAX TIPS: “As a matter of fact, they also have a dedicated COVID-19 webpage.  It is at: https://www.ed.gov/coronavirus and they address five potential student and campus scenarios that may prompt an institution to have questions about how to comply with Title IV, HEA requirements if the coronavirus impacts a student or a campus.”

 

RULES

From IRS Webpage : https://www.irs.gov/coronavirus:

The IRS has established a special section focused on steps to help taxpayers, businesses and others affected by the coronavirus. This page will be updated as new information is available.

The Department of Treasury also has information available at https://home.treasury.gov/coronavirus

From IRS Notice 2020-15:

To facilitate the nation’s response to the 2019 Novel Coronavirus (COVID-19), this notice provides that, until further guidance is issued, a health plan that otherwise satisfies the requirements to be a high deductible health plan (HDHP) under section 223(c)(2)(A) of the Internal Revenue Code (Code) will not fail to be an HDHP under section 223(c)(2)(A) merely because the health plan provides health benefits associated with testing for and treatment of COVID-19 without a deductible, or with a deductible below the minimum deductible (self only or family) for an HDHP. Therefore, an individual covered by the HDHP will not be disqualified from being an eligible individual under section 223(c)(1) who may make tax-favored contributions to a health savings account (HSA).

 

BOTTOM LINE

  • The Coronavirus (COVID-19) is causing disruption for all of us.
  • The IRS and Treasury Department webpages dedicated to the coronavirus provide updated information.
  • The Department of Education is also in on the act with great guidance on their virus page.
  • Your Accounting Team should check these sites regularly for up-to-date announcements.

 

Specific questions? Email Dave Moja

The information provided herein presents general information and should not be relied on as accounting, tax, or legal advice when analyzing and resolving a specific tax issue. If you have specific questions regarding a particular fact situation, please consult with competent accounting, tax, and/or legal counsel about the facts and laws that apply.

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