Whew - Tax Season is FINALLY in the rear view mirror (except for some extensions).
I hope everyone is staying healthy but finding ways to enjoy the summer as close to normal as possible.
Now that we are thru the final crunch - I wanted to reconnect and update you on the latest in the COVID-19 tax world:
Unemployment:
For those of you that are still unable to work due to COVID-19 - you have likely heard that the Federal portion of unemployment (the extra $600/week) has run its course and has not yet been extended ... that means that your benefits will roll back to what they would have been under normal circumstances. The entire process of collecting unemployment was absolutely riddled with problems but hopefully they have been worked out by now. If anyone is still experiencing issues please let us know... Big shout out to our local Pa Representative Todd Polinchok - his office has been extremely helpful in helping folks get thru the mess - I've referred a few people over to his office and they have reported success!
PPP Forgiveness:
Many businesses have spent the PPP proceeds and would like to apply for forgiveness however the Banks are not accepting the applications yet. They are waiting for the SBA to be ready as they need to provide the final approval and there are specific time lines that must be followed at their end. Rumor has it August 10th they will be ready - however I am not holding my breath just yet.
If you need help with the application - please let us know - but don't rush in - there is a movement to "automatically" forgive loans under a certain threshold ($100 - $150k has been kicked around). This will be a welcome bit of relief however - "Automatic" will likely require attestations that the funds were spent in accordance with the loan provisions etc so continue to keep your records as they may be needed to back up those statements. At this point - we are advising everyone to sit tight and stay tuned!
Also - if you haven't jumped on the PPP wagon yet - you still have a few days before the extended deadline to apply arrives (Aug 8th).
Payroll tax deferral:
The CARES act provides the ability for employers to defer paying the Company share of the social security taxes. The payments are deferred until Dec 31, 2021 when 50% is required to be paid and then the 50% balance is due on Dec 31, 2022. This was originally not an option for payroll expenses covered by PPP loans so it was off the radar - however the Flexibility Act passed on June 5th changed that and it is now available to all. If you are interested in learning more or taking advantage of this - please reach out to us and/or your payroll provider to set it up.
Self Employed Individuals:
The above deferral also applies to Self-employed individuals. 50% of the self-employment tax can be deferred until 12-31-21 & 12-31-22. This can impact your estimated tax payments going forward if you choose to take advantage of this provision. If you would like to look into this - please let us know.
Families First Coronavirus Relief Act:
On the HR side - the Families First Coronavirus Relief Act provides that employers must pay employees who can't work under certain circumstances related to COVID-19. This includes parents that must stay home to care for kids that are not able to attend school or daycare which could be a problem if schools do not open or stay open in the fall. The good news is that employers can apply for a credit to offset the cost of this via payroll tax filings. We are not HR experts and therefore cannot advise re: the various situations that would require application of this - however we do work closely with a firm that is very knowledgeable in this area (RC Kelly Law Associates, Inc.) If you have a situation that requires a consult - let me know and I can arrange a referral. If you do run into this please be sure to advise us or your payroll provider so that the credit can be applied for. Note this applies to small as well as large employers.
Grants Etc:
Please check out these sites for additional Grants and Loans that are available as COVID-19 impact relief for small businesses:
PA - Grants of Federal funds from the CARES Act
https://dced.pa.gov/programs/covid-19-relief-statewide-small-business-assistance/
SBA - EIDL loan
https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources
Take Care and as always - please let us know if we can be of further assistance!