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Steps for PPP Loan Forgiveness

If you received a PPP loan, here is what you need to know - track and document everything. Keep detailed records of your expenses! Supporting documentation is necessary for potential loan forgiveness, and for a possible audit by the SBA in the future. The SBA has already issued interim guidance for loan forgiveness as discussed below, and we expect final guidelines any day. The loan might be forgiven if at least 75% of the funds were used for payroll costs. The remaining funds can be used for eligible interest on mortgage loans, rent, and utilities (those in effect prior to February 15, 2020). The amount of forgiveness of a PPP loan depends on the borrower’s payroll costs over an eight-week

COVID-19 Relief for Student Loan Borrowers

The recently issued Coronavirus Aid, Relief, and Economic Security (CARES) Act provides relief for most student borrowers (Section 3513 of the Act). Effective March 13, 2020 and through September 30, 2020, all interest on qualified student loans is waived and payments are suspended for six months. 1. Eligible Loans: Most federal loans are eligible for relief. These covered loans include Subsidized and Unsubsidized Direct Stafford loans Direct Plus loans for parents and students Perkins loans Federal Family Education loans owned by the U.S. Department of Education. Private loans and loans issued by state lending authorities do not qualify. 2. Interest Reduction: The interest rate on qualified

COVID-19 Provisions Related to Self-Employed Individuals

The recently issued Families First Coronavirus Response Act (Act) provides relief to employees impacted by COVID-19 in the form of paid leave, and to the small and midsize businesses who can claim payroll tax credits in order to recover the cost of this paid leave. The Act also includes protection for Eligible Self-Employed Individuals. 1. Eligible Self-Employed Individuals An eligible self-employed individual is defined as an individual: Who regularly carries on any trade or business and Who would be entitled to receive the benefits, if the individual were an employee of a traditional employer. 2. Tax Credit for Sick Leave An eligible self-employed individual can claim a sick leave tax cre

COVID-19 Charitable Contributions

The recently issued Coronavirus Aid, Relief, and Economic Security (CARES) Act modifies certain allowances and limits on charitable contributions. 1. Allowance of partial above the line deductions for charitable contributions (Section 2204 of the Act) This section allows the individuals, who elect not to itemize deductions, to claim an above-the-line deduction for cash donations up to $300 to qualified charitable organizations. In order to be deductible, the contribution must be made to a charitable organization described in Internal Revenue Code section 170(b)(1)(A) which includes churches, schools, hospitals, university endowment foundations, publicly supported organizations, and governmen

Critical Tax Deadlines and Dates

The IRS extended 2019 income tax filing and payment deadlines until July 15, 2020 for all taxpayers who were supposed to file and pay their Federal income taxes on April 15, 2020. This applies to all individual returns, trusts, and corporations. This is an automatic extension, so taxpayers do not need to file any additional forms. We do encourage everyone to provide their tax information, and not to put it off. The IRS will continue processing the returns - and refunds, if applicable! Below is a summary of Federal Tax Filing deadlines: Individual income tax returns: July 15, 2020. Estimated tax payments for the 2020 tax year (IRS Form 1040-ES): 1st Quarter 2020 Estimated tax payment is due o

Paycheck Protection Program – What You Need To Know!

The Paycheck Protection Program (“PPP”) authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. Who qualifies? Small businesses with fewer than 500 employees that were in operation on or before February 15, 2020. These include S Corporations, C Corporations, LLCs, sole proprietorships, independent contractors, certain nonprofits, and veteran organizations. When obtaining the PPP loan, borrowers must certify that COVID-19 has affected their business. If your business does not qualify for PPP loan, then consider the SBA Economic Injury Disaster Loans (EIDL), which will be a topic for a future article. When can you apply? April 3,

Relief for Homeowners and Renters

In our continuing effort to keep our clients and business community informed about the recent developments resulting from the COVID-19 pandemic, here is a more in-depth discussion of some of the recent relief provided to individuals and businesses by the U.S. government. Mortgage Relief for Homeowners Servicers of federally backed mortgages are required to postpone mortgage payments if requested by the borrower, provided the borrower affirms financial hardship due to COVID-19. The postponement must be granted for up to 180 days and extended for an additional period of up to 180 days if requested by the borrower. During the mortgage forbearance period, interest will still accrue, but additio

Retirement Plan Provisions of the CARE Act and Other Considerations

We have summarized below recent legislation impacting retirement plans and how you can take advantage of these benefits: The CARES Act creates a new emergency retirement plan distribution option dubbed the “coronavirus related distribution,” or “CRD” for short. A CRD can be drawn from an employer sponsored retirement plan such as a 401(k) or from individual retirement accounts (IRAs), in any amount up to $100,000 from January 1, 2020 to December 31, 2020. Under the terms of the CARES Act, the normal 10% penalty tax levied on early plan distributions by the Internal Revenue Service (IRS) is waived. Furthermore, if you take a CRD the reported income can be spread over three years for tax purpo

Tax Credit for Emergency Sick Leave and Family Leave Paid by Employers Under the Families First Coro

The IRS has announced a plan to implement Coronavirus-related paid leave for workers and tax credits for small and midsize businesses. Eligible employers can claim these credits based on qualifying leave they provide between April 1, 2020 and December 31, 2020. Small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or child-care is unavailable in cases where the

COVID-19 – How It Is Changing Our World

While all but those individuals deemed “essential workers” are under stay at home orders, Congress has been busy trying to ease the devastating impact this pandemic is having on businesses and individuals in our country. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed by President Trump on March 27. The CARES Act, along with other related legislation, provides relief for individuals and businesses. Here is a summary of the most significant provisions: 1. Paycheck Protection Program Starting April 3, 2020, small businesses and sole proprietorships can apply for the SBA’s “Paycheck Protection Program”. Starting April 10, 2020, independent contractors and self-emplo

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