Executive Orders Signed by President Trump on August 8, 2020
Aug 11,2020
After Congress reached an impasse on the next round of stimulus related to the ongoing pandemic, President Trump signed Executive Orders on August 8, 2020 to provide some relief to taxpayers. The Executive Orders are described briefly below. It is important to note, however, that these orders are not in effect and have been challenged from a Constitutional and legal standpoint. Until such time as their standing is confirmed, the descriptions below are informational only. Disaster Relief This directs the Department of Homeland Security to use its Disaster Relief Fund and directs states to use their Coronavirus Relief Fund allocations to provide financial relief to the unemployed affected by COVID-19. Of note, it provides an up-to-$400/week supplemental unemployment compensation benefit. This is a decrease from the $600 provided until the original relief ended July 31, 2020. It also makes changes to eligibility for this unemployment relief, specifically: An individual must...
SBA and Treasury Publish Interim Final Rule on PPP
Jun 30,2020
Today, June 30, 2020, is the last day a business can apply for a PPP (Paycheck Protection Program) loan. Businesses will now need to focus on applying for loan forgiveness, if they have not already done so. On June 25 and 26, the Small Business Administration (SBA), in consultation with the Department of Treasury, provided additional guidance for businesses applying for PPP loans. There was also a Federal Register notice published on June 26 to finalize Interim Rules about PPP loan forgiveness and loan review procedures. Among the items covered by the Interim Final Rules: Early loan forgiveness Businesses may apply for loan forgiveness early, if they have spent all of the loan amount, but the interim final rule published on June 26 warns that those businesses may face some reductions in loan forgiveness. These two examples from the interim final rule illustrate how: 24-week covered period example: A borrower...
IRS Publishes Guidance on Rollover Relief for RMDs
Jun 26,2020
On Tuesday, June 23, the Internal Revenue Service (IRS) announced that taxpayers who have already taken their required minimum distribution (RMD) in 2020 from certain retirement accounts will now be able to roll those funds back into eligible retirement accounts. This is the result of a waiver for RMDs in the Coronavirus Aid, Relief and Economic Security (CARES) Act, benefiting those who do not need the money as they will not have to pay the taxes that would have been due on those distributions. Taxpayers who were supposed to take the required RMD in 2020 included anyone who turned 70½ in 2019 and would have had to take the first RMD by April 1, 2020. However, the CARES Act waives that requirement for the calendar year 2020. Rollover period According to the IRS guidance, the 60-day rollover period has been extended to August 31, 2020. Furthermore, an IRA owner or...
Net Operating Loss Deadline for 2018 Approaches
Jun 26,2020
The Coronavirus Aid, Relief and Economic Security (CARES) Act contains numerous provisions, including a change in net operating losses (NOLs), bringing some financial relief to taxpayers affected by the COVID-19 pandemic. This change allowed taxpayers who had NOLs to go back five years and offset those losses. This is an important reminder that NOL carrybacks for 2018, which can go from 2017 to as far back as 2013, are due June 30, 2020. What To Do Taxpayers need to determine if they had a loss in 2018 and income in any prior year to see if they are eligible for an NOL carryback. Eligible taxpayers may file an application for a tentative carryback adjustment of the tax liability for a prior taxable year that is affected by a NOL carryback. The tentative carryback adjustment procedure allows a taxpayer to obtain a tentative tax refund based on an NOL carryback. Taxpayers...
SBA and Treasury Update PPP Loan Forgiveness Application Form
Jun 19,2020
The Paycheck Protection Program (PPP) was very popular when it was introduced, particularly because of the prospect of the loan being fully forgiven if all criteria were met. However, the application forms were long and complicated. On June 16, the Small Business Administration (SBA), in consultation with the Department of Treasury, published a simplified version of the PPP loan forgiveness application form, implementing the modifications made by the PPP Flexibility Act of 2020. The SBA also published a new, EZ version for certain employers. The new application forms were published alongside revised interim rules on how to calculate employee and owner compensation for loan forgiveness as a result of the Flexibility Act. Revised Application Form The revised form incorporates the changes made by the Flexibility Act and include: eligible and non-eligible costs: S corporation owners cannot include their health insurance costs when calculating payroll, but their retirement costs are eligible....
Business Forecasting Amidst a Pandemic
Jun 16,2020
Planning and forecasting helps businesses plan for future growth while preparing for possible hurdles and changes in the economy. Developing a forecasting model can be difficult because even the most careful planning and calculations can be thrown off by unexpected events. The COVID-19 pandemic is a dramatic example. With the rate of economic recovery still very much up in the air, forecasting the next month, let alone the remaining half of 2020 or the next few years, is going to be far more challenging. Businesses must adapt and take advantage of available technology so that their forecasting becomes a more malleable tool that allows them to quickly update plans as new data points fly in from around the globe. Assessing Your Forecasting Tools One of the first action items to take when evaluating your approach to business forecasting is to assess your forecasting tools. Here are some questions to consider...
Guidance from the AICPA on Accounting for Forgivable PPP Loans
Jun 15,2020
Businesses, including nonprofits, that qualified for a forgivable loan from the Small Business Administration through the Paycheck Protection Program (PPP) have been given accounting guidance by the American Institute of Certified Public Accountants (AICPA). The guidance addresses how a borrower under the program should account for the loan. The guidance states that the legal form of the PPP loan is debt and may be accounted for in accordance with existing financial liability guidance. A business should: record the loan as a financial liability and accrue interest; not assign additional interest at the market rate; continue recording proceeds from the loan as a liability until the loan is either partly/fully forgiven or has been paid off; reduce the PPP liability by the amount of the loan that was forgiven and record a gain on the extinguishment when legally released from repayment of the PPP loan. If a commercial business entity expects...
SBA and Treasury Announce PPP Loan Modifications, Based on PPP Flexibility Act
Jun 09,2020
The Small Business Administration (SBA) and Treasury announced on June 8 that they will be issuing guidance and additional rules for the Paycheck Protection Program Flexibility Act passed by Congress on June 3, 2020. Of particular note, the announcement clarified that partial loan forgiveness will be allowed if the 60% payroll costs threshold is not met. The pending guidance will be accompanied by modified application forms for borrowing and for loan forgiveness. The changes to the PPP rules and modifications to the forms that will be addressed based on the Flexibility Act include: Extended covered period Loan forgiveness is extended from the original eight weeks after the date of loan disbursement to 24 weeks. Borrowers who have already received PPP loans may still opt for the eight-week covered period.  Partial Loan Forgiveness Borrowers may now use 60% of their PPP loan on payroll costs instead of the previous 75% during...
Security Measures to Consider While Working From Home During the Pandemic
Jun 08,2020
When the COVID-19 pandemic broke out and businesses moved their operations to a work from home (WFH) basis, many had to do so in a rush. While many people around the country have been able to work from home at least occasionally in the last decade, very few businesses are set up for complete WFH operations. Although the country is slowly beginning to open and workers are preparing to return to offices in phases, many businesses may continue to WFH for weeks or even months. Some businesses have even announced moving a portion or all of their employees to a permanent WFH status. With this long-term WFH environment in mind, there are some things that CEOs need to consider. Evaluate current IT security and protection When it comes to creating a successful and secure WFH environment, a top priority for businesses should be making sure that their business operations are...
Congress Passes PPP Flexibility Act 2020
Jun 04,2020
On Wednesday, June 3, 2020, Congress passed the Paycheck Protection Program Flexibility Act of 2020, which President Trump is expected to sign into law. The legislation gives businesses more flexibility in how they spend PPP loans and when they can apply for loan forgiveness. Here is what you need to know. Changes to PPP loan terms Under the Flexibility Act: Businesses now only have to spend 60% of the loan on payroll costs. Previously, 75% had to be spent on payroll, leaving only 25% for other qualifying non-payroll costs such as mortgage interest, rent and utilities, including electricity, gas, water, telephone or internet access. Now, up to 40% of the loan can be used on qualifying non-payroll costs. The amount of time given to businesses to use the loan has been extended from eight weeks to 24 weeks from the date of the loan’s origination or until December 31, 2020,...

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