States Offer Programs to Assist with COVID-19 Pandemic; A Closer Look at Wisconsin’s Efforts– May 08, 2020 by Karen Raghanti

As states continue to offer tax return filing, payment deferrals and other assistance measures in light of the COVID-19 pandemic, we take a closer look at Wisconsin.

>> Learn more about relief efforts identified in other states in which our firm is located in our easy-to-use spreadsheet tracker

State of Wisconsin 2019 Act 185

Relief: The State of Wisconsin 2019 Act 185 issued April 15, 2020, offers relief to a broad range of entities and industries impacted by the COVID-19 outbreak. The Act also requires the Wisconsin Economic Development Corporation (WEDC) to submit a report to the legislature and the Governor by June 30, 2020, that includes a plan for providing support to the major industries in Wisconsin that have been adversely affected by COVID-19.

Who this Impacts: All businesses and individuals filing Wisconsin tax returns.

The Act makes a number of changes to conform Wisconsin’s tax law to federal CARES tax changes. Specifically, the Act:

  • Exempts retirement distributions from penalties during 2020,
  • Creates additional charitable contribution deductions,
  • Treats Paycheck Protection Program (PPP) loan forgiveness as tax free,
  • Provides for an income exclusion for certain student loan payments made by an employer on behalf of employee and
  • Allows a 15-year recovery period for Qualified Improvement Property (QIP)

The Act also waives the one week waiting period for unemployment. Now individuals applying for employment assistance after March 12, 2020, and before February 7, 2021, do not need to wait one week between application for and receipt of unemployment benefits.

Work-Share Program Layoff Aversion Assistance

Relief: The Work-Share Program is an alternative to layoffs for employers. It allows workers to remain employed and employers to retain trained staff during times of reduced business activity. Under the plan, employers reduce employee hours to avert a layoff. The employee works the reduced hours and receives unemployment benefits that are pro-rated for the partial work reduction.

Who this Impacts: Employers with at least two employees that are considering employee layoffs.

Assembly Act 185 also suspends the following requirements for work-share plans until December 31, 2020:

  • The limitation that the plan cover a particular work unit of the employer. Now a work-share plan can cover any employees.
  • The employee working hour reduction must be at least 10% but not more than 50% of normal hours per week. Now the Act increases the permissible reduction in working hours under a work-share program to be not more than 60% of normal hours per week, or the highest permissible reduction allowed under federal law, whichever is greater.
  • The requirement that at least 10% of the employees in a work unit be included in a work-share plan, and that the employer provide for initial coverage under the plan of at least 20 positions that are filled on the effective date of the program. Now the Act only requires the plan to cover at least two positions that are filled on the effective date of the program.
  • The requirement that reduced working hours are apportioned equitably among employees in the program. Now full and part-time employees employed for more than three months may be eligible. Employers may include company sponsored training to enhance job skills, as well as participate in the federal Workforce Innovation and Opportunity Act without impacting eligibility.

In addition, the employer’s unemployment insurance account is charged for the payments to each employee for the week, similar to unemployed workers who receive benefits. Employees are not required to search for work during the plan.

Wisconsin 2019 IRA, HSA and Archer MSA Contribution Deferral

Relief: Wisconsin will postpone the requirement for 2019 contributions to eligible plans until July 15, 2020, which is the postponed 2019 income tax return deadline.

Note that Wisconsin is not providing an extension past April 15 for a 2019 income deduction for contributions to a Wisconsin 529 college savings plan.

Who this Impacts: All Wisconsin residents.

Wisconsin 2019/2020 State Tax Filing and Payments Deferred

Relief: The Wisconsin Department of Revenue deferred the income tax deadline to July 15, 2020, in conformity with the federal tax filing and payment extension of approximately 90 days for 2019 income and franchise tax returns with an original deadline of April 15, 2020.

As with the IRS extension, Wisconsin will also waive interest and penalties on tax due payments made during the extension. Additionally, all taxpayers making non-income tax filings and payments may request a one month filing extension prior to the original deadline of various non-income tax returns, including Withholding Deposit Returns (WT-6), sales and use tax returns and excise tax returns (which include motor fuel, alcohol and tobacco). Note that the one month extension only applies to filing the non-income tax return. Wisconsin is not   providing an extension to pay the taxes, and the Department will impose interest on late payments.

Who this Impacts: All businesses and individuals filing Wisconsin tax returns.

Wisconsin Economic Development Corporation (WEDC) COVID-19 Grants and Loans

Relief: The Brew City Match Small Business Emergency Loan Fund provides loans from $5,000 to $10,000 to cover rent, payroll and other fixed expenses at a 0% interest rate. The application fee has been waived due to support from sponsors.

Additionally, the Brew City Match Small Business Grant provides awards up to $1,200 to be used for commercial rental assistance or to meet payroll for current employees.

Who these Impact: Retail, restaurant or service businesses located within specified historic commercial corridors (Historic King Drive, North Avenue Marketplace BID, Near West Side, Cesar Chavez Drive and surrounding neighborhoods).

Brew City Match applications will be reviewed on a rolling basis, and businesses will be notified within five business days on the status of their application.

Small Business 20/20 Grant Program

Relief: The Small Business 20/20 Grant Program provides funds to approved community development financial institutions (CDFIs). Approved CDFIs will award grants of up to $20,000 to their existing loan clients to assist with cash flow challenges resulting from COVID-19.

Who this Impacts: Existing, for-profit CDFI loan clients with 20 or fewer employees and less than $2 million in annual revenue.

Contact Karen Raghanti at kraghanti@cohencpa.com or a member of your service team to discuss this topic further.


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Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.