On February 22, 2021, the Biden administration announced several reforms to the Paycheck Protection Program (PPP) to direct more funding towards the smallest and neediest businesses and promote equitable access to relief. The five major changes announced may make a significant difference if you are a small business owner working on your own or with less than 20 employees, have student debt or are a Green Card holder.
The Affordable Care Act and How to Stay Compliant
In 2010, the Affordable Care Act (ACA) was passed and signed into law, requiring employers with 50 or more full-time employees to offer minimum essential coverage to at least 95 percent of their full-time employees. If coverage isn’t offered or if the coverage offered isn’t affordable, the employer can face an IRS assessment known as an Employer Shared Responsibility Payment (ESRP).
Stephen Klein & Tim Oberst Share Insight on Second Round of Paycheck Protection Program Loans
While the first round of the Paycheck Protection Program (PPP) provided a much-needed economic boost for businesses hit hard by the COVID-19 pandemic, many companies that received a loan have continued to struggle to stay afloat. At last, however, some of the hardest-hit industries now have a chance at survival due to the many improvements Congress built into the second round of PPP loans, which are now underway.
2021 Consolidated Appropriations Act: Tax Provisions and Impact
After several days of negotiation, the Consolidated Appropriations Act, 2021 (the “CAA”) was passed by Congress on December 21, 2020 and signed by the president on December 27. The legislation includes numerous provisions intended to provide additional relief in response to the ongoing COVID-19 crisis.
Tax Planning for California’s Temporary NOL Deduction Suspension and Business Tax Credit Limitation
Amidst the commercial shutdowns brought on by COVID-19, state revenue collections have plummeted nationwide resulting in significant budget shortfalls. In response, many states are taking action. In an effort to overcome an estimated budget deficit of over $50 billion, California Governor Gavin Newsom signed Assembly Bill 85 (“A.B. 85”) on June 29, 2020. The bill contains several tax measures to provide much-needed tax revenue.
COVID Relief Package Expands the Employee Retention Credit, Permits Full Expensing of Business Meals and Extends Charitable Giving Incentives
The $900 billion COVID Relief Package, passed by Congress on December 21, 2020 and headed to President Trump’s desk for signature, contains a number of tax provisions to assist individuals and businesses, in addition to authorizing funding for second rounds of individual stimulus payments and PPP loans.
COVID Relief Package: Summary of Key Provisions Related to the Paycheck Protection Program
The long-awaited $900 billion COVID Relief Package was passed by the House of Representatives and approved by the Senate late on December 21, 2020. The legislation, headed to President Trump’s desk for his signature, includes important updates to the Paycheck Protection Program (PPP).
Remote Employee Nexus Relief
Despite states relaxing shelter-in-place and work-from-home mandates, most employers continue to allow employees to work remotely. Employees have since transitioned to exclusively working from their home offices, vacation homes or other remote locations.
Uncertainty Complicates 2020 Year-End Tax Planning
As 2020 comes to a close, individuals and businesses are looking to carry out their year-end tax planning in a potentially changing political landscape. Although Vice President Joe Biden is expected to be sworn in as president on January 20, 2021 and Democrats have maintained control of the House of Representatives, the Senate remains undecided because of two run-off races in Georgia scheduled for January 5, 2021.
SBA Explains Loan Necessity Questionnaires in Updated PPP FAQs
On December 9, 2020, the Small Business Administration (SBA) updated a set of “frequently asked questions” (FAQs) concerning the Paycheck Protection Program (PPP). The SBA released FAQ #53 to explain why recipients of PPP loans of $2 million or more are receiving Loan Necessity Questionnaires.
IRS Guidance Sanctions SALT Cap Workarounds Using Entity-Level Taxes on Passthroughs
On November 9, 2020, the IRS issued Notice 2020-75 announcing that Treasury and the IRS plan to issue proposed regulations to clarify that state and local income taxes imposed on and paid by partnerships and S corporations are not subject to the $10,000 SALT cap for their partners or shareholders.
IRS Doubles Down on Non-Deductibility of Expenses Paid with Forgiven PPP Loan Proceeds
Since the IRS issued Notice 2020-32, PPP borrowers and their advisors have questioned whether they can deduct forgivable expenses paid with PPP loan proceeds on their 2020 tax returns if the loan will not be forgiven until 2021. On November 18, 2020, the IRS released Revenue Ruling 2020-27 and Revenue Procedure 2020-51 resolving the timing issues related to PPP loan forgiveness and the deductibility of related PPP expenses.
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