Walter & Shuffain - Certified Public Accountants & Business Advisors

Don’t overlook the Employee Retention Credit

The Employee Retention Credit (ERC) was introduced in 2020 to help businesses that have been affected by the COVID-19 pandemic. Since its release, it has been expanded and modified to help more businesses. Despite all of this, many businesses that are eligible for the credit haven’t filed for it. Did the pandemic impact your business? Don’t assume your business is ineligible. Keep reading to learn more.

IRS releases website to manage child tax credit deposits

The IRS recently released information on how to check eligibility, opt-in for non-filers, and opt-out of the advance child tax credit payments as part of the ARP. 

IRS provides guidance on tax credits for employers providing paid vaccine leave

The IRS and Treasury Department provided new information regarding the tax credits available through the American Rescue Plan (ARP). The ARP was created to help small businesses through the pandemic. This new guidance provides information on how eligible businesses can claim the credit for providing paid time off to employees receiving or recovering from the vaccine. Below, we’ve outlined which employers are eligible for the credits and when and how the credits can be taken.

PPP extension passes House and Senate

A measure to extend the Paycheck Protection Program (PPP) application deadline from March 31, 2021, to May 31, 2021, has passed the U.S. House of Representatives and the Senate. It now heads to President Biden’s desk for signature which he is expected to do promptly.

Key tax provisions in the American Rescue Plan Act

The American Rescue Plan Act (ARPA) has been signed into law by President Biden and makes significant updates to several tax provisions to alleviate some of the pandemic's financial burdens for individual taxpayers and businesses. Updates include expansions and extensions of various tax credits such as the employee retention credit (ERC), COBRA continuation coverage, Affordable Care Act (ACA) subsidies, and more. The bill also includes $1.46 billion for the IRS to manage the additional responsibilities on top of the annual tax filing season. Here are the critical tax updates.

American Rescue Plan Act signed into law

The American Rescue Plan Act (ARPA) of 2021 passed Congress and President Biden signed the bill into law on March 12, 2021. The ARPA approves $1.9 trillion in spending for individuals, businesses, governments, and certain industries impacted by the COVID-19 pandemic. The third Act in a year, the ARPA approves additional economic impact payments for individuals; the extension of federal unemployment benefits; additional funds for Paycheck Protection Program (PPP) Loans, and Economic Injury Disaster Loans (EIDL) for hard-hit small businesses; and grants for food and beverage establishments. Here are the key individual and business provisions in the bill.

IRS clarifies employee retention credit eligibility for PPP loans and 2020 claims

The IRS has released additional guidance in Notice 2021-20 on the Employee Retention Tax Credit (ERC) with clarifications on the retroactive changes for expanded eligibility applicable to 2020. Employers who received a Paycheck Protection Program (PPP) loan have been waiting on guidance on claiming the credit in combination with forgiveness of their loan. The provisions outlined here apply to retroactive claims for 2020 as well as providing a plan for those yet to seek forgiveness.

New PPP calculation released for Form 1040, Schedule C filers

Form 1040, Schedule C taxpayers received an updated interim final rule (IFR) on the Paycheck Protection Program (PPP) from the Small Business Association (SBA). The IFR clarifies guidance released on Feb. 22 that made changes to how self-employed and sole proprietors could calculate their maximum loan amount to help expand the program for these groups. Approximately 2.6 million sole proprietors have applied for PPP loans, and it is estimated there are about 25 million sole proprietors across the country.

Smallest businesses get PPP updates, special filing period

The nation’s smallest businesses are getting revamped Paycheck Protection Program (PPP) rules and a special filing period announced in recent changes from the Biden-Harris administration. Small businesses with fewer than 20 employees make up 98% of the small businesses in the U.S. but have not received much assistance from the PPP so far and have accounted for a significant portion of business closures during the pandemic. These new rules seek to remedy that. Here’s what you should know.

Massachusetts and PPP Loan Forgiveness

When Federal Laws change, in Mass. there is an automatic mandate that Corporations will follow current Federal rules.   However, for individuals whose business income comes from a Schedule C or a pass through entity, Massachusetts generally follows the Code as amended and in effect on January 1, 2005.  Therefore, for a borrower subject to Massachusetts personal income tax, any amount forgiven under Section 1106 of the Act is includable in gross income and subject to tax, and there is no disallowance of deductions attributable to the payment of expenses resulting in the forgiveness of the loan.  

Everything you need to know about the expanded ERTC

The employee retention tax credit (ERTC) is intended to provide liquidity to employers during the pandemic and was greatly expanded in the Consolidated Appropriations Act of 2021 thanks to Sections 206 and 207 of the Taxpayer Certainty and Disaster Relief Act portion, opening the doors to more businesses to be able to qualify for and receive this credit who are facing significant hardship as a result of the coronavirus pandemic. Many changes from the original credit were enacted including an expansion in the amount of credit and business eligibility, and how it plays with the Paycheck Protection Program (PPP).  

Summary of the Employee Retention Tax Credit Provision of the CARES Act

This credit is geared towards employers subject to partial or full COVID-19 related closures. This credit impacts compensation, furlough, and layoff strategies. If you are considering making workforce reductions, it is important to understand your options under the CARES Act.

Treasury issues interim final rules on updated PPP guidance

Two new interim final rules for the Paycheck Protection Program (PPP) have been released from the Small Business Administration (SBA) and Treasury in response to the changes and second round of funding enacted by the relief portion of the Consolidated Appropriations Act signed at the end of December. 

Congress passes second Coronavirus relief bill, includes new funding and updates to PPP

The U.S. House of Representatives and U.S. Senate have passed the Coronavirus Response & Relief Supplemental Appropriations Act, and President Trump has signed the bill. The agreement comes after weeks of negotiations and two funding extensions to keep Congress open until a bill was passed with a $1.4 trillion government-wide funding plan. The $900 billion coronavirus relief portion includes another round of Paycheck Protection Program (PPP) funding, extended unemployment benefits, and direct payments to taxpayers. Here’s an overview of the key provisions in the bill.

Work-from-home tax implications: What employers and employees need to know

The pandemic created by the novel coronavirus has drastically changed the way we live and work. As more businesses are forced to send their employees home, work-from-home life has become a mainstay especially in knowledge-based jobs (jobs that do not require physical labor), and many of these industries are not going back to the workplace anytime soon. This can create wrinkles for both employers and employees when it comes to their tax situations. Here’s what employers and employees need to know about remote work and the impact it can have on taxes.  

Guidance issued on deductibility of expenses with a PPP loan

On Nov. 18, the IRS and Treasury issued Revenue Ruling 2020-27 which provides long-awaited guidance on the tax treatment of expenses related to Paycheck Protection Program (PPP) loans. The guidance states that the expenses listed in section 1106(b) of the CARES Act that would otherwise be deductible will not be allowed in the taxable year that the expenses were paid or incurred and covered under a PPP loan that is forgiven or expected to be forgiven. 

Understanding the 3 PPP forgiveness applications: Which one to use

The Paycheck Protection Program (PPP) from the Small Business Administration (SBA) and Treasury has had many updates over the past few months including changes to timelines and forgiveness applications. Among these changes was the introduction of three different types of forgiveness applications: 

PPP loans of $50,000 or less get simplified rules from the SBA

The Small Business Administration (SBA) and Treasury announced on October 8 that a simplified application (Form 3508S) for Paycheck Protection Program (PPP) loan forgiveness is now available for borrowers whose loans fall in the $50,000 or less threshold. As more and more businesses begin filing for PPP loan forgiveness, this change outlined in a new interim final rule greatly simplifies the process for borrowers with smaller loans. However, it is important to note that this simplified form is not equal to automatic forgiveness.   

Latest update to PPP provides guidance on owner-employee compensation, non-payroll costs

On Aug. 24, the Small Business Administration (SBA) and Treasury issued the latest interim final rule update to the Paycheck Protection Program (PPP) that seeks to clarify guidance related to owner-employee compensation and non-payroll costs. This guidance has been long-awaited and clears up several questions borrowers have had about forgiveness. Here are the main points: 

COVID-19 FAQs

Will I receive cash from the government? If so, when?

Single individuals with 2019 (2018, if your 2019 return hasn’t been filed yet) Adjusted Gross Income (AGI) up to $75,000 ($112,500 if you file as “head of household”) will generally receive a $1,200 rebate from the IRS. Joint filers with AGI up to $150,000 will receive a rebate of $2,400. An additional $500 rebate is available for each qualifying child under age 17. If your income is too high, the rebate will be reduced by $5 for each $100 your AGI exceeds the threshold. So, for a typical family of four, the amount is completely phased out once AGI exceeds $218,000.

Latest PPP FAQ Document- An overview of some of the most notable clarified guidance

The Small Business Administration (SBA) and Treasury released an updated Paycheck Protection Program (PPP) FAQ on Aug. 4 in an effort to address PPP loan forgiveness issues that have arisen as borrowers begin to complete their applications. The 23 FAQs address various aspects of PPP forgiveness including general loan forgiveness, payroll costs, non-payroll costs, and loan forgiveness reductions.

House, Senate Approve 5-week PPP Extension

The U.S. Senate and House of Representatives have both unanimously agreed to extend the Paycheck Protection Program (PPP) by five weeks.

PPP Extension Bill Approved by Senate, Signed by President

On June 4, 2020, the president signed into law the Paycheck Protection Program Flexibility Act after it passed the Senate with a unanimous vote.

House passes bill to extend, expand provisions of PPP

On May 28, 2020, in a nearly unanimous vote, the U.S. House of Representatives voted to extend certain provisions of the Paycheck Protection Program (PPP) to provide small businesses with relief in the timeframe and use of their PPP loan funds.

SBA guidance on PPP Loan Forgiveness issued

On May 15, the Small Business Administration (SBA) issued the Loan Forgiveness application and on May 22, the interim final rule guidance on the PPP loan forgiveness was issued. 

Employer Retention Credit- an alternative to PPP

The “CARES Act” provides a tax credit for eligible employers to encourage them to continue paying employees.

PPP Loan Forgiveness- Next Steps

We are going to attempt to at least provide some best practices in the short term until clear guidance is available.  Remember, this is for the 8 week period after the loan is issued. 

What is the Economic Injury Disaster Loan Program (EIDL)?

The EIDL (Economic Injury Disaster Loan) program is a program available to certain small businesses located in areas subject to a presidential disaster declaration that have suffered a substantial economic injury as a result.

What is the Paycheck Protection Program (PPP)?

The PPP provides short-term cash flow assistance to small businesses to help these businesses and their employees deal with the immediate economic impact of the COVID-19 pandemic.

Families First Coronavirus Response Act (FFCRA)

On March 18, 2020, the Families First Coronavirus Response Act (FFCRA) was signed into law, marking the second major legislative initiative to address COVID-19.

CARES Act introduces Paycheck Protection Program, Disaster Assistance from SBA and Other Options

Changes to the existing SBA 7(a) loan programs and also provides information on SBA Disaster Loans and the Facebook Small Business Grant. 

The CARES Act for Individuals and Businesses

Phase 3 of the COVID-19 response plan, The Coronavirus Aid, Relief and Economic Security (CARES) Act

Tax Filing Deadline Extended To July 15

“Moving tax day from April 15 to July 15.  All taxpayers and businesses will have this additional time to file and make payments without interest and penalties”

Tax Payment Deferral

On Tuesday, March 17th, Treasury Secretary Mnuchin announced a 90-day grace period on the payment of individual and corporate taxes normally due April 15th.

A message to our friends and clients regarding the COVID-19 (coronavirus) outbreak

Our top priority has always been to deliver superior service to our clients. To do that in the current environment, we're taking every precaution possible.    Fortunately, we have the technological capability for everyone on our team to work remotely.