On March 11, 2021, President Biden signed into law the American Rescue Plan Act (“ARPA”). The ARPA mandated several important changes for both employers and employees. One of these is potentially significant for both: full subsidies for employer-paid COBRA premiums. The ARPA requires employers to provide temporary, fully subsidized COBRA continuation coverage premiums for certain individuals for up to six months. Employers will be able to recover the subsidized premiums by claiming a tax credit.
The benefits provided to employers and employees are available to COBRA ...
President Biden has signed the PPP Extension Act of 2021. The new law extends the Paycheck Protection Program (PPP) application filing deadline from March 31, 2021 to May 31, 2021. The new law gives qualifying businesses and individuals more time to apply for a PPP loan.
While this new law does not increase the amount of funding available for PPP loans, Congress did authorize $7.25 billion in additional PPP funding under the recent American Rescue Plan Act.
On March 11, 2021, President Biden signed into the law the American Rescue Plan Act (“ARPA”) containing $1.9 trillion in financial stimulus. Though not highly publicized, the ARPA provides important relief related to plan funding for both single employer and multiemployer pension plans. This article will focus solely on the single employer pension plan provisions of the ARPA.
Pension plans are required to maintain certain funding levels. Funding levels are determined by a series of complex calculations usually performed by actuaries hired by plan sponsors. These ...
Prior to the passage of The American Rescue Plan Act of 2021 on March 11, 2021 (the “Rescue Act”) the employee retention credit, as amended by the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (the “Relief Act”), was set to expire for wages paid after June 30, 2021. The Rescue Act extends the employee retention credit to qualifying wages paid through December 31, 2021. Consequently, qualifying employers may be eligible to claim an additional $14,000 of credits per employee in 2021.
A summary of the employee retention credit as amended by the Relief Act is available here.
The second PPP loan program is due to expire March 31, 2021. Many eligible businesses have still not applied. President Biden announced changes to the program on February 22, 2021 making it easier to qualify for a PPP loan now, and particularly for sole proprietors, independent contractors, and self-employed individuals.
The PPP loan program still has funds available. Congress could also extend the March 31, 2021 termination date for loan applications. However, Congressional extension is not certain, and qualifying individuals and businesses should consider applying for a PPP ...
The Tax Cuts and Jobs Act of 2017 (TCJA) imposed a $10,000 cap on the federal deduction for state and local taxes for tax years 2018-2025. While corporations are not subject to the cap, business owners who pay state and local income tax on pass-through income are subject to the cap.
On November 9, 2019 the IRS released Notice 2020-75 indicating it would issue regulations to clarify that state and local taxes paid by a partnership or corporation would be deductible by the partnership or S corporation when they compute their pass-through income. This guidance paves the way for states to enact ...
The Employee Retention Credit, as originally enacted on March 27, 2020 by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), is a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees after March 12, 2020, and before January 1, 2021. The Taxpayer Certainty and Disaster Tax Relief Act (Relief Act), enacted on December 27, 2020 amended and extended the Employee Retention Credit. On March 1, 2021, the IRS released Notice 2021-20 to provide guidance on the original Employee Retention Credit, as ...
The US Department of Justice announced the first civil settlement involving allegations of fraud against a PPP borrower.
SlideBelts Inc. received a PPP loan under the CARES Act. SlideBelts is an internet retail company and debtor in bankruptcy. SlideBelts and its president/CEO agreed to resolve the allegations in connection with the PPP loan by paying the government damages and penalties of $100,000. SlideBelts had already repaid the $350,000 PPP loan it had received.
The announced civil settlement resolves claims that the conduct of SlideBelts and its president/CEO violated ...
While there are many new tax policy implementations that may be imminent with the new Biden administration, there are two changes in particular that estate planning attorneys are watching closely. These include (1) a reduction in the estate tax exemption and (2) an elimination of the basis step-up for inherited property. Unfortunately, there is still no way to predict exactly what will happen or when those changes will take effect, but the current climate does provide individuals with a unique opportunity to take advantage of some wealth transfer planning strategies, such as ...
PPP loans received by individuals and businesses under the CARES Act will be audited (“reviewed”) by the SBA. The new Economic Aid Act also requires the SBA to submit a forgiveness audit plan within 45 days after enactment and report updates every 30 days thereafter. Additionally, the Economic Aid Act now allocates $50 million for PPP audits and fraud mitigation efforts. PPP loans of $2 million or more will automatically be audited by the SBA. Many PPP loans of less than $2 million will be audited as well.
PPP loan audits are being handled by the SBA. Borrowers will often receive ...