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The Employee Retention Credit, as originally enacted on March 27, 2020 by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), is a refundable tax credit against certain employment taxes equal to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 ...
A United States District Judge in Washington ordered the SBA to release the names and other information of all Paycheck Protection Loan borrowers. In WP Company LLC d/b/a The Washington Post, et al., v. U.S. Small Business Administration, Civil Action No. 20-1240 (JEB) and a related case, Center for Public Integrity v. U.S. Small Business Administration, Civil Action No. 20-1614 (JEB), United States District Judge James E. Boesberg issued a November 5, 2020 order requiring the SBA to release the names and other information for all PPP loan borrowers by November 19, 2020.
The SBA ...
On October 31, 2020, the SBA released new forms and related instructions requiring borrowers with PPP loans of $2 million or more to provide additional information related to their PPP loans. Titled “Loan Necessity Questionnaire”, the SBA released separate forms and instructions applicable to both for-profit and non-profit borrowers. The SBA explains that “the purpose of this form is to facilitate the collection of supplemental information that will be used by SBA loan reviewers to evaluate the good-faith certification that you made on your PPP Borrower Application.”
PPP loans under the CARES Act are being audited by the SBA. All PPP loans over $2 million will be audited, and many more under $2 million will be audited as well. Applying for forgiveness of a PPP loan increases the likelihood of an audit.
An audit or “review” by SBA of a borrower and its PPP loan can result in an SBA determination that the borrower (1) was ineligible for a PPP loan; (2) was ineligible for the PPP loan amount received or used the PPP loan proceeds for unauthorized uses; (3) is ineligible for PPP loan forgiveness in the amount determined by the lender in its full or partial ...
In March, Congress passed the Coronavirus, Aid, Relief and Economic Security Act (“CARES Act”) to aid businesses and individuals. One CARES Act relief provision offered the deferral of certain payroll taxes. In particular, Section 2302 provides that employers may defer the deposit and payment of the employer’s portion of the Social Security taxes arising between March 27, 2020, and December 31, 2020 (the “Employer Deferral”). Any deferred taxes are repaid over the following 2-year period. The CARES Act failed to offer similar deferrals for the employee portion of ...
The SBA and the United States Treasury have now released a list of over 600,000 PPP loan borrowers who received PPP loans of $150,000 or more. This list includes the name of the borrowers, the general loan range of the PPP loans received, the state in which the borrower is located, and other information.
The list released by SBA/Treasury contains expected information about borrowers in many industries, including restaurants, construction, and other industries hard-hit by the COVID-19 pandemic, and certainly in need of financial help to get through the economic uncertainly and ...
The Paycheck Protection Program under the CARES Act ended June 30, 2020, and with over $520 billion loaned to nearly 4.9 million self-employed individuals and businesses. The PPP was hastily passed by Congress and inconsistently-interpreted by government agencies. Over $125 billion remained available under the PPP, but because of the often complex and uncertain conditions for receiving loans under the program no one was interested in receiving these remaining funds - even where they could have been forgiven.
With the US economy still struggling, Congress has now rushed to pass an ...
Banks have loaned over $500 billion in PPP loans under the CARES Act, and to over 4.6 million businesses and self-employed individuals. These PPP loans are critical for these businesses and individuals – and their employees – to survive the economic devastation wrought by the COVID-10 pandemic.
PPP loans are administered by the U.S. Small Business Administration (SBA), and the SBA has issued a steady stream of administrative guidance concerning its interpretation of the Payroll Protection Program. Some of this SBA guidance is based on the agency’s interpretation of the ...
1. Do I have to take my required minimum distributions (RMD) in 2020?
No. Required minimum distribution rules do not apply for 2020 for IRAs, Roth IRAs, qualified defined contribution plans, 403(b) plans and government-employer type 457 plans.
2. Does that mean my RMD in 2021 will be doubled? Is 2020 just postponed?
No. Your 2021 RMD will be calculated the exact same way as if you had taken your 2020 RMD.
Added bonus: If you turned 70 1/2 in 2019 and did not yet take your 2019 RMD, you do not have to take your 2019 or your 2020 RMD.
3. What if I already took my RMD for 2020?
If you are within the 60 ...
Many South Carolinians who have been furloughed or laid-off from work have received unemployment benefits from the South Carolina Department of Workforce. These benefits have been increased under the federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act), and where an individual can be paid up to $926/week for 33 weeks.
The CARES Act significantly expanded unemployment benefits for workers impacted by the Coronavirus (COVID-19) outbreak. For unemployed workers, the CARES Act funds the following additional benefits under South Carolina’s unemployment ...
The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) provides individuals with a stimulus payment of $1,200 per adult, plus $500 for each qualifying child age 16 and under (subject to phase-outs for higher income individuals). The stimulus payment provided by the CARES Act is structured as a refundable federal income tax credit.
South Carolina does not allow individuals to deduct federal income taxes in arriving at South Carolina taxable income. Consequently, federal tax credits generally have no impact on an individual’s South Carolina income tax ...
The Payroll Protection Program (PPP) under the CARES Act can provide eligible businesses with a forgivable loan from the government to be used to keep and pay employees, and for certain other purposes, and to help businesses, their owners, and their employees get through this difficult COVID-19 pandemic. However, the amount of a PPP loan – and the amount that potentially can be forgiven - may depend on the type of legal entity under which a business operates.
For example, partnerships/limited liability companies and self-employed individuals (including an individual operating ...
Presently, many human resource departments are scrambling to address issues raised by the passage of the Families First Coronavirus Response Act (the “FFCRA”) and the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act” collectively with the FFCRA hereinafter referred to as the “COVID-19 Legislation”). While many of the provisions of the COVID-19 Legislation are straightforward, the COVID-19 Legislation contains provisions that implicate a number of employee benefit requirements that could get overlooked. This article reviews two disclosure ...
Due to the COVID-19 pandemic, many employers have furloughed some or all of their workforce in South Carolina. Furloughed employees may now be entitled to receive unemployment benefits, and enhanced by $600 per week by the federal government through the CARES Act.
In South Carolina, unemployment benefits paid to unemployed workers are funded by the South Carolina Unemployment Insurance Tax (UI Tax). The UI Tax – also known as South Carolina’s version of “SUTA” – is imposed on employers and paid to the South Carolina Department of Employment and Workforce (SCDEW) and which ...
One of the provisions included in the Coronavirus, Aid, Relief and Economic Security Act (CARES Act) allows an employer and self-employed individuals to defer the payment of the employer’s share of social security taxes (not Medicare taxes) or the corresponding portion of self-employment taxes. The option is available for payments that would otherwise be required to be made between March 27, 2020 and December 31, 2020. No special election is required and deferred amounts will be reported on a forthcoming revised Form 941 (future guidance will address how to report deferrals for ...
While the Coronavirus has delayed tax season by a few months, Congress’s response may have created the first ever refund season in the recently passed and much discussed relief package known as the Coronavirus Aid, Relief, and Economic Security Act, or “CARES Act” for short. While the Act employs various relief techniques, Congress’s most effective and tried-and-true relief method – amending the Internal Revenue Code (the “Code”) – may ultimately play the most significant role.
On that note, the CARES Act amends many tax-related provisions, including ...
In the late hours of March 25, 2020, the United States Senate met to vote on a third “Coronavirus” bill to provide relief to the American people. The Senate ultimately passed H.R. 748—the Coronavirus Aid, Relief, and Economic Security Act or “CARES Act.” Two days later, the House followed suit and sent the bill the President for his approval. The Act contains many stimulus provisions, even some that affect recently-amended Internal Revenue Code (“Code”) sections. This post covers an important amendment to Section 172, which governs the use of “net operating ...
On March 27, 2020 the the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act or Act), H.R. 748, became law. The Act provides eligible employers a tax credit against employment taxes equal to 50% of qualified wages. The credit is determined quarterly and effectively capped at $5,000 per eligible employee.
Eligible employers include any employer that was carrying on a trade or business in 2020 whose operations were impacted by the Coronavirus crisis. Two tests are used to determine whether a business was impacted by the Coronavirus. The tests are applied quarterly. The ...
The CARES Act, enacted on March 27, 2020, includes several provisions that change the rules for employee benefit plans, ranging from providing greater access to retirement benefits and HSA funds to offering funding relief to single-employer pension plans.
The CARES Act adds a new tax-favored withdrawal option that applies to the following types of retirement plans: IRAs, qualified plans (e.g., profit sharing and 401(k) plans), 403(a) and (b) plans, and 457(b) governmental plans. The withdrawal is permitted only if it is a Coronavirus-related distribution, which is defined as a ...
The COVID-19 or Coronavirus has disrupted demand in many industries and is wreaking havoc on budgets and cash flow projections. On March 27, 2020 the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act or Act), H.R. 748, became law. The CARES Act seeks to incentivize employers to retain their employees and to provide enhanced unemployment benefits for employees who are not retained. The CARES Act contains a number of tax related provisions to assist employers.
Paycheck Protection Program
The Act establishes a forgivable loan program (the Paycheck Protection Program ...