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Days after a judge in Texas ruled that a nationwide preliminary injunction barring FinCEN from enforcing the Corporate Transparency Act (CTA) would stand, the U.S. Court of Appeals for the Fifth Circuit has declared the opposite. In a December 23, 2024 ruling, a unanimous Fifth Circuit bench granted the government’s emergency motion for a stay pending the appeal.

The reversal means that the businesses that are required to file BOI reports must now do so during the appeal process.

In response to the Court decision, the Financial Crimes Enforcement Network (FinCEN) has granted a short extension.

Extended Deadlines for Existing Companies
Companies created or registered before January 1, 2024, must file their initial BOI reports by January 13, 2025 (extended from January 1, 2025).

Extensions for Recently Registered Companies
Companies registered between September 4, 2024, and December 23, 2024, now have until January 13, 2025, to file their BOI reports.

Companies registered between December 3, 2024, and December 23, 2024, receive an additional 21 days from their original filing deadline.

Disaster Relief Extensions
Depending on their circumstances, companies qualifying for disaster relief may have filing deadlines beyond January 13, 2025.

New Companies Starting in 2025
Companies registered on or after January 1, 2025, must file their BOI reports within 30 days of their creation or registration becoming effective.

You can find information and file your BOI reports at www.boiefiling.fincen.gov.

Here’s what’s new for businesses as we approach 2025: a delay in the Department of Labor’s overtime rule and the launch of Delaware’s new Paid Leave Program.

Overtime Rule Delay: What’s Next?

A recent federal court ruling has temporarily delayed the implementation of the U.S. Department of Labor’s (DOL) proposed changes to the overtime rule. These changes would have raised the salary threshold for employees to qualify for overtime pay, impacting many businesses nationwide. The court vacated the rule, citing concerns over the methodology used in determining the new salary thresholds.

For now, the overtime rule remains in limbo. While the DOL may revise or reinstate the rule in the future, we recommend that employers keep an eye on further developments. In the meantime, it’s crucial for business owners and HR professionals to continue monitoring their exempt employees’ compensation to ensure compliance with existing regulations.

Delaware’s Paid Leave Program

Starting January 1, 2025, Delaware will join the ranks of states offering paid family and medical leave for workers with its own state-run Paid Leave Program. This new legislation mandates that businesses with 10 or more employees provide employees with paid leave benefits. This includes paid parental leave, as well as time off for medical reasons, family caregiving, and addressing the impact of a family member’s overseas military deployment.

Some key points about the Delaware Paid Leave Program:

• Employers with 10 or more employees must provide paid parental leave benefits, and employers with 25 or more employees must provide full coverage for parental, medical, and family caregiving leaves.
• The program pays eligible employees 80% of their weekly earnings, up to $900 per week.
• Employers can choose to self-insure or use private plans, as long as the benefits meet or exceed the state program.

As businesses prepare to comply with this new mandate, they should be aware of the potential penalties for non-compliance. Registering with the state’s administrative system, Delaware LaborFirst, will be required, and contributions will be due starting January 1, 2025. For more information on the program and to get started, visit the Delaware Department of Labor website.

Count on Canon Capital Payroll

As your trusted payroll partner, we’re here to help you navigate these changes and ensure compliance. We will continue to monitor both the federal overtime rule and Delaware Paid Leave to provide you with the latest updates and guidance.

The final quarter of the year is often a busy time, but it’s also an opportunity to prepare your business for a successful start to the new year. Whether you’re navigating evolving cybersecurity threats, preparing for regulatory changes, or getting ready for payroll updates, here’s a quick rundown of what to know as we wind down the final quarter of the year.

Cybersecurity: Stay Vigilant Against Holiday Scams

It’s the height of the holiday season, and with it comes an increased risk of cyberattacks targeting small businesses. According to recent data, one in three small businesses was targeted by a cyberattack last year. As you shop online for holiday deals, be especially cautious of scams. Common threats include fake holiday sale emails containing malicious links that can compromise your business’s systems.

Here are a few tips to stay protected:

• Buy from reputable websites or brick-and-mortar stores.
• Be cautious when connecting new smart devices to your business network. Ensure they have the latest security patches and configurations before use.
• Educate your team on the importance of verifying email sources and avoiding suspicious links.

Corporate Transparency Act BOI Reporting on Hold

A recent ruling by a Texas Federal Court has temporarily halted the Corporate Transparency Act’s Beneficial Ownership Information (BOI) reporting requirements. The court raised constitutional concerns, providing relief to the millions of businesses preparing their filings. For now, those who have already filed need not take further action, and those who haven’t are not required to file at this time. As the issue moves through the courts, changes to the reporting requirements may occur in 2025. We will keep you updated.

Payroll Update: Overtime Rule Changes

A recent federal ruling has delayed the implementation of the Department of Labor’s new overtime rule, which was set to raise the salary threshold for exempt employees. The court vacated the rule, citing concerns over the methodology used to determine the thresholds. As a result, we will monitor further developments and issue updates since the new rule may still be modified or reinstated in the future.

If you need assistance navigating these changes, please contact us for expert advice tailored to your business needs.

We’re proud to announce that Moriah Randolph has earned her certification from the National Association of Certified Public Bookkeepers (NACPB).

This certification reflects Moriah’s commitment to excellence in bookkeeping and her dedication to providing our clients with precise, dependable financial management.

Congratulations, Moriah, on this well-deserved achievement!

We recently wrapped up our second annual Pack-a-Shoebox Party for Operation Christmas Child, an organization dedicated to bringing hope, joy, and the message of love to children around the world through simple gifts.

Thanks to the enthusiastic efforts of our team, we packed an incredible 53 shoeboxes filled with toys, hygiene items, and school supplies. These boxes are on their way and will soon brighten the lives of children in need, reminding them that they are cared for and not forgotten.

A huge thanks to everyone on our Canon Capital team who participated and contributed to this heartwarming cause. Here’s to making an impact—one shoebox at a time.

UPDATE

On December 3, 2024, a Texas Federal Court granted a nationwide preliminary injunction against the Corporate Transparency Act. The court cited potential constitutional issues with the CTA BOI reporting and felt there was enough injury to warrant this preliminary injunction.

This injunction brings welcome relief to many of the approximately 32.6 million companies working through the filing. The preliminary injunction alleviates the immediate reporting requirements until the constitutionality issue can be settled in courts—most likely the Supreme Court.

Given the commencement of a new administration in 2025, the reporting regulations may be withdrawn or modified next year, or they could be found unconstitutional.

Businesses and individuals that have already filed do not need to take any further action. Those who have not filed are no longer obligated to do so at this time.

As always, we will keep you updated in 2025 when more information becomes available.

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If you’re a small business owner, you may not be aware of a new reporting requirement that could impact your company: the Beneficial Ownership Information (BOI) filing under the Corporate Transparency Act. Overseen by the U.S. Treasury, this obligation applies to most small businesses registered with a secretary of state or similar office.

Here’s what you need to know to stay compliant and avoid potential penalties:

What Is the BOI Reporting Requirement? 

Unlike tax filings submitted to the IRS or state authorities, BOI reporting is required by the Financial Crimes Enforcement Network (FinCEN) under the U.S. Treasury. The goal is to enhance corporate transparency and combat illicit activities, such as money laundering.

Deadlines to File 

• New Businesses: If your business was created or registered in 2024, you have 90 days from the date of creation to file your BOI report.
• Existing Businesses: If your business was in existence as of December 31, 2023, you have until December 31, 2024, to comply.

Legal Challenges and Potential Delays 

Currently, there is ongoing confusion surrounding BOI filing requirements, driven by court cases and proposed legislation. While some lawmakers are pushing to delay the filing deadline, there’s no certainty that such measures will pass during the post-election “lame duck” session. Given the substantial fines for non-compliance, we recommend filing sooner rather than later.

How to File 

The online filing process is straightforward:

1. Visit FinCEN’s BOI E-Filing website.
2. Click on the File BOIR tab or select the Get Started button.

Need Assistance? 

The team at Canon Capital CPAs is here to answer any questions you may have about the BOI reporting requirement.

To better understand the details of this requirement, you can review FinCEN’s Small Entity Compliance Guide.

With the holiday season approaching, many businesses are considering how to show appreciation to their employees. While thoughtful gestures like gift cards, holiday parties, or personalized presents can boost morale, it’s essential to understand their tax implications. Depending on what you give, the IRS may classify your gift as taxable income to your employees.

Gift cards are always considered taxable income, regardless of the amount, because the IRS views them as equivalent to cash. Gift items like a company-branded mug or a holiday fruit basket may qualify as non-taxable as they are given occasionally and are relatively low in value.

Bonuses—while appreciated—are always considered taxable income, so it’s essential to plan for withholding when issuing them.

A popular option to reward your team and boost morale is to host a holiday party. Expenses for this type of event are generally non-taxable to employees since the event is infrequent and primarily for the benefit of the team.

Our tax and accounting professionals are here to help businesses navigate these IRS guidelines as they seek to show gratitude to their hard-working employees at the holidays and throughout the year.