covid-19 guidance and resources

Recently signed Consolidated Appropriations Act. 2021,  incorporated enhancements to the CARES Act, and extending numerous expiring tax provisions for both individuals and businesses. The previously passed CARES ACT (The Coronavirus Aid, Relief, and Economic Security Act) provided relief to individual Americans, healthcare workers, small business and certain industries hit by the pandemic.   

For Businesses, another round of Paycheck Protection Program (PPP) is loans  available, deductions for expenses paid with PPP loan proceeds, and additional time is provided for paying previously deferred payroll taxes. 

For Individuals, payments of $600 to individuals with adjusted gross income (AGI) of $75,000 or less (or $112,500 AGI for heads of households), payments of $1,200 to joint filer with AGI of $150,000 or less, and an additional $600 payment for each qualifying child. 

HERE ARE TWO LOAN PROGRAMS SHOWN BELOW TO HELP GET YOU FINANCIAL AID -  

(1) PPP & (2) EIDL  

THIS LOAN PROGRAM WAS RECENTLY MADE AVAILABLE FOR APPLICATIONS UNTIL MARCH 31, 2021.  

THIS LOAN IS AVAILABLE FOR FIRST-TIME BORROWERS AND TO PREVIOUS PPP RECIPIENTS.  

APPLICATIONS ARE MADE THROUGH YOUR BANK OR LOCAL SBA OFFICE 

- Please call if you need assistance.

PPP Second Draw Eligible Entities:

1. Have 300 or less employees.
2. Have used or will use the full amount of your first PPP loan.
3. Demonstrate a 25% reduction in gross receipts during any quarter in 2020 as compared to the same quarter in 2019.
4. Same 
5. They also have allowed additional borrowers to apply.  Call for details.

Seasonal Employers have an option of selecting any 12 week period between 2/15/2019 & 2/15/2020, for computing average total monthly payroll

Loan amounts are based off of 2.5 times the average monthly payroll costs in the year prior to the loan or the calendar year.  Food Service and Accommodation entities loan amounts are based off 3.5 times the average monthly payroll costs. 

You can choose your covered period, employees are kept on payroll for eight weeks or twenty four weeks, from the date PPP proceeds are received, SBA will potentially forgive the portion of the loans used for payroll, rent, covered mortgage interest, or utilities.  The borrower must maintain a 60/40 payroll to non-payroll expenditure ratio to receive full forgiveness.

Second Draw Loans adds additional expenditures allowed to be used towards potential loan forgiveness; Covered worker protection and facility modification expenses, Covered Operations Expenditures, Covered Property Damage Costs, Covered Supplier Costs.

The new bill specifies PPP loan proceeds will not be included in taxable income and business expenses paid with forgiven PPP loan funds are tax deductible.  

The Paycheck Protection Program is designed to provide a direct incentive for small businesses to keep their workers on payroll by providing each small business a loan up to $2 million for payroll and certain other expenses.  

 To apply for a COVID-19 Economic Injury Disaster Loan

The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. The loan advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. 

• Use of Proceeds - working capital & normal operating expenses
• Not Forgivable
• 3.75% for businesses (fixed)
• 30 years
• No pre-payment penalty or fees
• Payments deferred 1 year; interest accrues
• SBA uses general security agreement (UCC) designating business assets as collateral, e.g. machinery and equipment, furniture and fixtures, etc.

The Small Business Administration (SBA) issued the Paycheck Protection Program loan forgiveness application.  There are three different applications that can be completed based on your facts and circumstances regarding the loan, employees paid or unable to pay.  The forgiveness application is filed through your lender who issued the PPP loan funds to your business.  

The forgiveness form includes step by step instructions on how to complete the application.  If you are in need of assistance in filing the application or in gathering the documents to file the forgiveness application please contact us.  We are here to help! 

The deadline to file for forgiveness is 10 months from the last day of the covered period, then PPP loan payments are no longer deferred and borrowers will begin making loan payments to their PPP lender.

The Consolidated Appropriations Act simplified loan forgiveness applications for loans under $150,000.

Link to PPP loan forgiveness - frequently asked questions:

https://www.sba.gov/document/support-frequently-asked-questions-ppp-loan-forgiveness

For business taxpayers -

1. Business meals deduction temporarily increased allowance to deduct business meals when provided by a restaurant, allowing 100% for tax years 2021 and 2022.
2. Repealed the deduction for the EIDL advance from PPP forgiveness amount. 
3. Extended and improved the employee retention credit.  The refundable payroll tax credit increased to 70% of qualified wages each quarter; increased the limit on per-employee creditable wages from $10,000 per year to $10,000 per quarter; the credit now includes wages paid or incurred from March 13, 2020 through June 30, 2021; Employers are now allowed to use prior-quarter gross receipts to determine eligibility; reduced the required reduction in gross receipts from 50% to 20% of the same calendar quarter in the prior year; number of employees increased to 500 when determining qualified wage base; new employers are now eligible to claim the credit. 
4. Deferred payment paying employer share of Social Security (6.2%)  from date of enactment was extended to April 30, 2021.  The deferred taxes must be paid back over the following two years.
5. Tax credit increase for small employer pension plan startup costs and a new tax credit for small employers that include automatic enrollment for an for an existing or new Section 401(k) plans and SIMPLE IRA plans.
6. Special expensing rules allowed for film, TV or theatrical productions.
7. Excise tax provisions on alcohol production was made permanent.
8. Credit for energy efficient homes is extended and applies to contractors who construct or manufacture qualifying energy efficient homes in the year such homes are sold or leased for use as a residence.
9. Permanent deduction for energy improvements to commercial buildings.
10. Foreign personal holding company income look-through rule extended through tax year 2025.
11. Automatic 60-day extension for businesses affected by federally declared disasters.
12. Work Opportunity Credit extended through 2020.
13. Employer Credit for paid family and medical leave was extended through 2020.
14. Employee Retention credit for employers affected by qualified disasters.
15. Qualified Cash or Deferred Arrangements must allow part-time employees to participate. The act requires a Section 401K plan to allow an employee to make elective deferrals if the employee has worked at least 500 hour per year with the employer for at least three consecutive years and has met the age requirement by the end of the three consecutive year period.
16.  The bill also established extensions through tax year 2021 for several other credits.  Call for more information. 

For business taxpayers, the CARES Act -

1. SBA is providing low-interest working capital loans see below for more details.
2. The CARES Act provides an employee retention credit against applicable employment taxes of 50% of wages for employers subject to closure due to COVID-19.  See PDF below for more details.
3. Extends the time for paying employer share of Social Security (6.2%)  from date of enactment to December 31, 2020.  The deferred taxes must be paid one-half by 12/31/21 with the remainder paid by 12/31/22.
4. Temporarily repeals the taxable income limitation for Net Operating Losses and allows a five-year carry-back for losses generated in 2018 through 2020.  
5. Eliminates the limitation on excess farm losses for years after 2017 and before 2026.
6. Modifies the credit for prior year minimum tax liability of corporations by reducing the limitation on the amount of the credit that is refundable.
7. Modifies the limitation on deductions for business interest by increasing the amount of taxable income which limits the deduction from 30% to 50%.
8. Fixes the technical glitch in the Tax Cuts and Jobs Act which prevented qualified improvement property to be treated as 15 year property (from 39 year property) depreciation property and now is eligible for 100% bonus depreciation.
9. For Corporations, the 10% limitation is increased to 25% of taxable income on charitable contributions.  The provision also increases limitation on deductions for contributions of food inventory from 15% to 25%
10. The CARES Act retroactively suspends the excess business loss provision which disallowed business losses in excess of $250,000 for single taxpayer and $500,000 for married filing joint taxpayers.

The newly passed bill extends pandemic unemployment assistance benefits created under the Cares Act through March 14, 2021.  The federal supplement to unemployment insurance benefits for eligible individuals is $300 per week beginning December 26, 2020, and ending March 14, 2021. Benefits are extended from 39 to 50 weeks.  All benefits will expire on April 5, 2021.

  the CARES Act - 

1. The bill extended payments for those individuals who traditionally were not eligible for unemployment benefits, such as self-employed and independent contractors.   
2. The individual has been diagnosed with COVID-19 or is experiencing symptoms of COVID-19 and seeking a medical diagnosis; a member of the individual’s household has been diagnosed with COVID-19; the individual is providing care for a family member or a member of the individual’s household who has been diagnosed with COVID-19; a child or other person in the household for which the individual has primary caregiving responsibility is unable to attend school or another facility that is closed as a direct result of the COVID-19 public health emergency and such school or facility care is required for the individual to work;
3. The individual is unable to reach the place of employment because of a COVID-19 quarantine or self-quarantine advised by a healthcare provider
4. The individual was scheduled to commence employment and does not have a job or is unable to reach the job as a direct result of COVID-19
5. The individual has become the breadwinner or major support for a household because the head of the household has died as a direct result of COVID-19
6. The individual has to quit his or her job as a direct result of COVID-19
7. The individual’s place of employment is closed as a direct result of COVID-19

1. Provides rebate payments of $600 to individuals with adjusted gross income (AGI) of $75,000 or less (or $112,500 AGI for heads of households), payments of $1,200 to joint filer with AGI of $150,000 or less, and an additional $600 payment for each qualifying child.   The rebate checks issued in the upcoming weeks as an "advance" credit you will reconcile on your 2020 tax return.  The credit is not considered taxable income.   If you were entitled to a smaller payment than you actually received you will not have to pay it back.  If you received a smaller stimulus payment than you were entitled to the difference will be shown on on your 2020 tax return.  There is nothing you need to do to receive this payment. It is automatic and based on what you reported on your 2019 income tax return.  If you have not filed your 2019 return yet, the IRS will base your payment on your 2018 return.  If you have no income, or your income comes entirely from non-taxable, means-tested benefit programs such as SSI, you also qualify for the advance payment. If no returns were filed in 2018 or 2019, information from your 2019 Form 1099-SSA and Form 1099-RRB will be used.  The stimulus payment will not be considered taxable income.
2. Expands coverage of unemployment insurance to those unemployed, underemployed or unable to work due to COVID-19 pandemic,  See details under PDF section below.   Temporary Unemployment Assistance was added for self-employed, independent contractors unable to work due to COVID-19 pandemic.  Apply on NYS Department of Labor website.
3. PPE and other supplies used for the prevention of the spread of COVID-19 are treated as eligible expenses for purposes of the educator expense deduction.
4. Penalty free withdrawals from retirement plans for individuals in case of birth of child or adoption of an eligible child.
5. Medical expense deduction floor for 2019 and 2020 have been reduced from 10 percent to 7.5 percent of adjusted gross income.  No adjustment  for medical expense deduction when computing the alternative minimum tax for 2019 and 2020.
6. Repealed the maximum age for Traditional IRA contributions.
7. The Required Minimum Distribution (RMD) beginning date has been increased to 72 years old from 70 1/2 years old, effective after 12/31/2019.
8. Non-Tuition fellowship and stipend payments are treated as compensation for IRA purposes.
9. Exception to penalty for using retirement funds on "qualified disaster distributions" from a  qualified retirement plan.
10. Increased the CARES Act amount for an above the line deduction of up to $300 for charitable contributions made by individuals for those who don't itemize and relaxes the limitations on deductible charitable contributions for taxpayers who itemize from 50% of AGI to 100% deductible in 2020.
11. Modifies the limitations on individual and corporate charitable contributions made during 2020 and increases the limit on contributions of food inventory.
12. Excludes from income certain student loan debt repaid by an individual's employer for repayments made after date of enactment and before 2021.
13. Expanded deduction for Section 529 plan tax free distributions for higher education expenses required for the participation of a designated beneficiary in an apprenticeship program. 
14. Reinstated the Deduction for Qualified Tuition and Related expenses for tax years 2018, 2019 and 2020 for yourself, spouse, or a dependent. Maximum deduction is $4,000 and income limits apply.
15. Reinstated the exclusion from gross income the discharge of indebtedness for tax years 2018, 2019 and 2020, of a taxpayer if the debt discharged is qualified principal residence indebtedness which is discharged before January 1, 2021.
16. Special rule for determining earned income credit and additional child tax credit.  You may elect to calculate the credits using your earned income form the prior tax year.  Qualified individuals (qualified disaster related individuals) are permitted to make the election with respect to an applicable tax year only if their earned income for such tax year is less than their earned income for the preceding tax year.
17. For 2018, 2019 and 2020, you can treat amounts paid for qualified mortgage insurance as qualified residence interest.
18. Elimination of Certain Kiddie Tax Provisions that went into effect in 2018, those rules were repealed and made retroactive back to the date they were adopted. 
19. Federal declared disaster area qualified taxpayers get a mandatory 60-day extension to file and pay taxes.
20. Gross income exclusion of certain benefits provided to volunteer firefighters and emergency medical responders.
21. Minimum age for certain qualified pensions to make distributions to workers who are 59 1/2 or olde3r and are still working.  For certain construction and building trades workers, the age is lowered to 55.
22. The bill extended energy investment tax credit for solar and residential energy-efficient property tax years 2020 and 2021.

1. Provides 2020 recovery rebates of up to $1,200 for singles and $2,400 for joint filers which begin phasing out at adjusted gross income of $75,000 and $150,000 respectively. Taxpayers with children will receive an additional $500 per child. Rebates will be issued based on 2019 income tax returns, or 2018 returns for individuals who haven't yet filed in 2019.  The rebate checks issued in the upcoming weeks as an "advance" credit you will reconcile on your 2020 tax return.  The credit is not considered taxable income.   If you were entitled to a smaller payment than you actually received you will not have to pay it back.  If you received a smaller stimulus payment than you were entitled to the difference will be shown on on your 2020 tax return.  There is nothing you need to do to receive this payment. It is automatic and based on what you reported on your 2019 income tax return.  If you have not filed your 2019 return yet, the IRS will base your payment on your 2018 return.  If you have no income, or your income comes entirely from non-taxable, means-tested benefit programs such as SSI, you also qualify for the advance payment. If no returns were filed in 2018 or 2019, information from your 2019 Form 1099-SSA and Form 1099-RRB will be used.
2. Expands coverage of unemployment insurance to those unemployed, underemployed or unable to work due to COVID-19 pandemic,  See details under PDF section below.   Temporary Unemployment Assistance was added for self-employed, independent contractors unable to work due to COVID-19 pandemic.  Apply on NYS Department of Labor website.
3. 10% early withdrawal penalty waived for Coronavirus-related distributions from retirement plans and provides the option of re-contributing the funds for up to three years after such distributions are made.
4. Loans from Qualified plans made within 180 days beginning on day of enactment, will not be treated as a distribution if the amount distributed does not exceed $100,000.  Taxpayers who currently have a outstanding plan loan with a payment requirement on the date of enactment and ending on 12/31/20 will be granted an automatic 1-year delay for making that repayment.  
5. Temporarily waives the Required Minimum Distribution (RMD) rules for 2020 for defined contribution plans, including an eligible deferred compensation plan, and individual retirement plans.
6. Beginning in 2020 the CARES Act allows an above the line deduction of up to $300 for charitable contributions made by individuals for those who don't itemize and relaxes the limitations on deductible charitable contributions for taxpayers who itemize from 50% of AGI to 100% deductible in 2020.
7. Modifies the limitations on individual and corporate charitable contributions made during 2020 and increases the limit on contributions of food inventory.
8. Excludes from income certain student loan debt repaid by an individual's employer for repayments made after date of enactment and before 2021.