Seminar Recording: Unpacking the Latest COVID-19 Relief Package

We held a virtual seminar on January 12, 2021 to unpack the pertinent elements of the latest COVID-19 Relief package: “Paycheck Protection Program 2 and the Consolidated Appropriations Act, 2021.” Presented by Steve Moyer, CPA PFS CGMA CSEP and Brent Thompson, CPA CMA CGMA, highlights included a review of:
  • Business Provisions
    • Loan Forgiveness and Forgiveness Applications for PPP1
    • New Second Round of PPP Funding (PPP2)
    • Changes in Employer Credit for Paid Family and Medical Leave
    • Changes to the Deferred Payroll Tax Rules
    • Changes to and Expansion of the Employer Retention Credit
    • Changes to Meal Deductions
  • Individual Provisions
    • Second Round of Economic Impact Payments
    • Changes to Child Tax Credit and Earned Income Credit Rules
    • Changes to Certain Contribution Rules
    • Temporary Changes for Health and Dependent Care Flexible Spending Accounts (FSA)
  • Numerous Disaster Relief Provisions, Energy-Related Provisions, Pension and Health Provisions and more.
Here is a summary of the legislation from AICPA. Watch the recording of the seminar and access a PDF file of the presentation. If you have any questions, please contact us via phone at 215-723-4881 or via email.

Zoom Meeting on January 12, 2021 to Unpack the Latest COVID-19 Relief Law

On December 27th, President Trump signed into law the second-longest piece of legislation in U.S. history. Needless to say, there are countless provisions in this law that affect businesses and individuals alike – including the second round of PPP funding.

Please join Steve Moyer, CPA PFS CGMA CSEP and Brent Thompson, CPA CMA CGMA on Tuesday January 12, 2021, for a Zoom session from 10:30 a.m. – 12:00 p.m. They will start to unpack the 5,593 pages of legislation and discuss the topics that have the largest and most immediate impact on you and your business. There will be an opportunity to ask questions via the Zoom chat feature.

Highlights of the law include the following:

Business Provisions

  • Loan Forgiveness and Forgiveness Applications for PPP1
  • New Second Round of PPP Funding (PPP2)
  • Changes in Employer Credit for Paid Family and Medical Leave
  • Changes to the Deferred Payroll Tax Rules
  • Changes and Expansion of the Employer Retention Credit
  • Changes to Meal Deductions

Individual Provisions

  • Second round of Economic Impact Payments
  • Changes to Child Tax Credit and Earned Income Credit Rules
  • Changes to Certain Contribution Rules
  • Temporary Changes for Health and Dependent Care Flexible Spending Accounts (FSA)

Numerous Disaster Relief Provisions, Energy-Related Provisions, Pension and Health Provisions and More

Register here. Registration is limited to 100 attendees and is available on a first-come, first-served basis. After registering, you will receive a confirmation email containing information about joining the meeting.

Please feel free to share this invitation with other business owners or managers you may feel would benefit.  You do not need to be a Canon Capital client to attend.

 

A Summary of the COVID-19 Relief Bill Passed by House and Senate Last Night, December 21, 2020

Late in the evening on Monday, December 21, 2020, the House and Senate passed a massive 5,593 page COVID-19 Relief and Government spending Bill. The President is expected to sign it into law today. The bill is a combination giant year-end government spending bill and a COVID-19 relief package combining $900 billion in COVID-19 relief aid with $1.4 trillion in regular government funding and a bevy of tax breaks for businesses. This pandemic relief bill is the second largest bill in history, only to be surpassed by the virus relief package signed into law just nine months ago.

The following is a brief summary of some of the major provisions of the new pandemic relief bill. A more detailed summary can be found here.

  • The legislation would provide direct payments of $600 to most Americans and their children. This would be for those individuals making up to $75,000 and $1,200 for married couples earning up to $150,000 as well as $600 per child. There will be a phase out for those individuals and families earning more than those amounts. The payments will go out as soon as next week, Treasury Secretary Steven Mnuchin said Monday.
  • For the unemployed, a $300-per-week in enhanced unemployment benefits will be put in effect through March. Unemployment insurance programs for gig workers and the long-term unemployed also would be extended.  Pandemic Emergency Unemployment Compensation, which provided up to 13 additional weeks of jobless benefits to those who had exhausted their regular state benefits, was extended as well.
  • Businesses who previously received PPP loans, will be able to deduct expenses related to these loan proceeds.
  • A second round of PPP loans (for now called PPP 2) will be available to businesses beginning in early January 2021.  These loans will be available to businesses who didn’t receive them under the first round or for businesses who received first round loans, but had a reduction of revenue in 2020 related to the Covid pandemic.
  • Simplified loan forgiveness for PPP loans under $150,000.
  • The measure contains $25 billion for emergency rental assistance, and it extends the Cares Act’s eviction moratorium until Jan. 31.
  •  It also has $82 billion for education funding, as well as $10 billion to support childcare providers, $15 billion for entertainment venues and $13 billion for nutrition assistance.
  • Additional measures include certain tax breaks and tax extenders for expiring tax provisions.

We will keep you up to date as additional information becomes available. We will look to offer some Zoom webinars in early to mid-January, 2021,  so be on the look-out for additional information.  If you have specific questions related to your own situation, please feel free to reach out to us via email or phone at 215-723-4881

Seminar Recording: Year-end Planning for a Biden Administration and the SECURE Act

2020 saw a lot of tax law changes due to COVID-19. We expect the same in 2021 with the continuing pandemic and a probable change in Administrations. Are you prepared?

On Friday, December 18, 2020, Chuck Porter, Jr., AIF, CFMFO and Brent Thompson, CPA CMA CGMA presented a virtual seminar to help in your planning. Topics included:

  • Review of the potential Biden tax plan
  • Review of the SECURE Act and other recent tax law changes
  • Planning points to evaluate prior to the end of the year
  • A brief update on PPP loan forgiveness and related recent and pending legislation

Watch the recording of the seminar and access a PDF file of the presentation.

If you have any questions, please contact us online or via phone at 215-723-4881. We will continue to issues these updates as information becomes available.

Year-end Planning for a Biden Administration and the SECURE Act: Zoom Seminar December 18, 2020

2020 saw a lot of tax law changes due to COVID-19. We expect the same in 2021 with the continuing pandemic and a probable change in Administrations.  Are you prepared?

Join Chuck Porter, Jr., AIF, CFMFO and Brent Thompson, CPA CMA CGMA on Friday, December 18, 2020, for a Zoom session from 10:00 a.m. – 11:30 a.m. They will provide you with valuable information as well as the opportunity to ask questions via the Zoom chat feature. This virtual seminar is ideal for business owners and high net worth individuals alike.

Topics will include:

  • Review of the potential Biden tax plan
  • Review of the SECURE Act and other recent tax law changes
  • Planning points to evaluate prior to the end of the year
  • Brief update on PPP loan forgiveness and related recent and pending legislation

Registration is limited to 100 attendees and is available on a first-come, first-served basis. After registering, you will receive a confirmation email containing information about joining the meeting. Please feel free to share with friends and colleagues you feel will benefit from this information.

Register here.

Operating Procedures under the Latest COVID-19 Guidance

Under the latest Pennsylvania COVID-19 guidance issued on Monday, November 23, 2020, the majority of our staff will be working remotely until further notice. As always, we can be reached by phone (215-723-4881) or email.

Reception will be open from Noon – 2 p.m. each day for client pick-ups. Outside of that timeframe, pick-ups will be by appointment only. Our drop box is available at all times for delivering information to us.

Thank you for continuing to work with us as we all hope for better things in the new year.

PPP Update: Latest News from the IRS

As we all have learned, very little is certain when it comes to PPP loans and the laws and rules that govern them. In the law itself, it expressly states that the forgiveness of the loan is not taxable. This clearly was Congress’ intent with the program.

In May, the IRS issued a notice that informed: “no deduction is allowed for an eligible expense that is otherwise deductible if the payment of the eligible expense results in forgiveness of the covered loan.” This notice was issued because there was existing law on the books that said ordinarily deductible expenses would not be deductible if they were paid with certain non-taxable income.  Unfortunately, the forgiveness of the PPP loan falls into the certain non-taxable income category. As a result, the non-deductibility of the applicable expenses will raise taxable income to the amount of the loan forgiveness.  Again, this was clearly not Congress’ intent. To change existing law on the books, it will take an act of Congress to do so.

Since PPP loans are indeed loans in every sense, the conventional wisdom leads us to believe income was not triggered until the loan was actually forgiven. This is why approximately 95% of borrowers have not applied for forgiveness to date.  If the loan wasn’t forgiven until 2021, then that would give Congress time to issue a corrective bill to be signed into law.  Borrowers could then file their returns for 2020 and not be affected by the additional income and pay additional taxes.

However, on November 18, the IRS issued both a Revenue Ruling (the IRS’ position on a topic) and a Revenue Procedure (how to implement the position) on the topic of forgiveness. The Revenue Ruling contained the statement “no deduction is allowed for an eligible expense that is otherwise deductible if the payment of the eligible expense results in the forgiveness of the covered loan”. The Revenue Ruling also states that even if a borrower has “a reasonable expectation of reimbursement,” the deduction is inappropriate. So in other words, as of this moment, even if forgiveness hasn’t been applied for or granted, borrowers can’t deduct eligible expenses in 2020 if they reasonably expect the loan to be forgiven in a future tax year.  The Revenue Ruling goes on to give examples of a taxpayer, who borrowed under the program, used the funds accordingly, and at the end of 2020 had a reasonable expectation that the loan would be forgiven when the taxpayer applied for forgiveness in 2021.  This taxpayer could not deduct the applicable expenses in 2020.  This marks a major shift from how advisors were advising their clients.

The Revenue Procedure gave a limited safe harbor which allows borrowers to claim a deduction in 2020 if the eligible expenses are paid or incurred in 2020, the taxpayer received a PPP loan in 2020, and in the subsequent year, the forgiveness is denied or not applied for.

As with everything else related to the PPP, this guidance raises more questions. So there is more guidance coming. Regardless of when the guidance or new law comes, it will certainly be retroactive if need be. But for now, we are left with the choice of filing the return while picking up income and potentially paying additional tax, or extending the return in anticipation of the additional law and guidance.

There continues to be strong bipartisan support to make the eligible expenses deductible. However, it seems that this issue will have to be addressed in further stimulus relief packages. With the appearance of a new administration and Congress in January, this may take time.

We continue to urge you to talk to your advisors about your individual situation.  As always, if you have any questions, you may also reach out to Steve Moyer or Brent Thompson.

PPP Update: New Interim Final Rule and Simplified Forgiveness Application for Borrowers of $50,000 and Less

In the time since last week’s seminar, “Your PPP Covered Period is About to End: Now What? – What We Know as of October 8, 2020”, the Treasury and SBA have released a new Interim Final Rule (IFR) and a simplified application for the forgiveness of PPP Loans.

This new application form — PPP Loan Forgiveness Application Form 3508S — can be used by borrowers with loan balances of under $50,000.  These borrowers are also now exempt from any reductions in forgiveness based on reductions of full-time equivalent employees (FTEs) and reductions in employee salary or wages.  The IFR streamlines the forgiveness process for borrowers of under $50,000 because they will not be required to perform potentially complicated FTE or salary reduction calculations.  Borrowers will still need to submit documents to the lender to support the eligibility of forgiveness.  The documents needed to be submitted with the application will vary based on individual lenders.  The IFR also included further guidance on lender responsibilities. Here are the instructions for completing Form 3508S.

Treasury Secretary Steven Mnuchin has stated the Treasury continues to be in favor of further legislation to simplify the forgiveness process.

As a reminder, the SBA opened its forgiveness application portal with lenders on August 10th. This new streamlined process was introduced two months after and there is still strong support for further legislation. Since the application and forgiveness process remains unclear at best, most borrowers have hesitated in filing their applications. Most banks have restricted their acceptance of the application in some manner as well.

With this new streamlined process, we suspect you may see lenders open their application process to loans under $50,000.  Keep in mind, as we stated in our Zoom Presentation on October 8th, the expenses paid with PPP loans at this point remain non-deductible. Thus, the loan is essentially taxable if forgiven. There continues to be support to make the expenses paid as deductible, so borrowers may still want to consider waiting to file their forgiveness applications – even with this new streamlined process.  However, there may be reasons to file as soon as possible as well. Each borrower will have to work with their advisor individually to determine what is best.

As always, if you have any questions, please do not hesitate to contact us.

Pennsylvania Construction Employers Must Now Comply with E-verification of Employee Social Security Numbers

As of October 7, 2020 employers in the construction industry must comply with Act 75: Pennsylvania’s Construction Industry Employee Verification Act, which prohibits the employment of unauthorized employees. Under this Act employers must now verify their employees’ Social Security numbers using the United States’ E-Verify system, which confirms a person’s eligibility to work in the U.S. Non-compliant employers will incur penalties.

If you have questions about Act 75, or another payroll concern, please call us at 215-723-4881 or contact us online.