Employers note – Kansas Governor Laura Kelley Issues Executive Order for Withholding on Telecommuters
States have been struggling with how to deal with telecommuters as a result of the COVID-19 pandemic. This is especially interesting for employers in one state when the employee works from home in a different state. For 2020, Kansas had a temporary rule that applied from March 13, 2020 through December 31, 2020 that allowed employers to continue to withhold based on the state of the employee’s primary work location. For Kansas withholding purposes under the temporary rule, it didn’t [...]
PPP Round 2
The second round of Paycheck Protection Program (PPP) funding is ready to be released. The Consolidated Appropriations Act of 2021 allocated $284 billion to the PPP program allowing second draws for hardest hit businesses. It is expected the SBA will begin taking application next week (January 11-15). Qualifications for a second draw include borrowers that: Have 300 or fewer employees or meet an SBA alternative size standard (restaurants, hotels, etc. with 300 or fewer employees per location) Used or expected [...]
It’s Year-End Tax Planning Time!
The economic situation due to the coronavirus (COVID-19) pandemic, as well as the magnitude of the tax law changes in the stimulus packages known as the CARES Act (The Coronavirus Aid, Relief, and Economic Security Act) and the FFCRA (The Families First Coronavirus Response Act), emphasizes the need for tax planning. Moves you make now can have a significant impact on your tax situation. The goal of tax planning is to minimize your tax liability without sacrificing your other personal [...]
Congress passes Consolidated Appropriations Act of 2021 – including PPP Modifications and COVID-Related Tax Relief
Happy Holidays! 2020 has been an extremely challenging year for many, but overnight (Monday night, December 21st) Congress passed legislation designed as one more stimulus to help those in need as a result of the COVID-19 pandemic. The Consolidated Appropriations Act, which includes the Paycheck Protection Program (PPP) timeframe modification and extensions and other COVID-related tax relief, now awaits President Trump’s signature. In addition to addressing the tax issues related to forgiven PPP loans, the $900 billion COVID stimulus package [...]
BEWARE – COVID-related text message scam
If you receive a text letting you know you “received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further action is required to accept this payment… Continue here to accept this payment …” – BEWARE - a fraudster is attempting to get your bank account information. Do no click on the link, and do not provide your personal and financial account information. The IRS does not send unsolicited texts or emails. If you receive such a message, the IRS [...]
IRS Disallows 2020 Expenses for PPP Loans Forgiven in 2021
As with much of what has been issued regarding PPP loans and ever-changing guidance, the following analysis of deductibility is subject to legislative change. At the end of April, the IRS issued guidance precluding deductions for expenses paid with PPP funds. The Small Business Expense Protection Act would reverse that and allow the expenses to be deducted, however, while still under consideration, this bill has not yet passed Congress. A frequent question by borrowers is how to project 2020 [...]
Pandemic Economic Decision Making
In March, I wrote an article posted on the MWB blog and in our previous newsletter, titled “Business Response in Times of Crisis.” COVID had just recently been officially labeled a ‘global pandemic’ and we were all learning phrases and acronyms such as ‘flatten the curve’ and PPE” (personal protective equipment) – not to be confused with PPP (Paycheck Protection Program) which wouldn’t enter lexicon for another two whole months. The article’s main focus was planning for and dealing with [...]
UPDATE on Employee payroll tax deferrals
President Trump issued an executive order on August 8, 2020 providing that employers could defer (but not forgive) the employee’s portion of Social Security taxes for certain employees for wages paid between September 1, 2020 and December 31, 2020. The Social Security tax is the 6.2% portion of the employment taxes taken out of employees’ paychecks. Also, President Trump tasked the Treasury Department with providing guidance to implement the order and also to explore ways to eliminate the obligation to [...]
Should Employers wait for Treasury guidance before making employee payroll tax deferrals?
President Trump issued an executive order on August 8, 2020 providing that employers could defer (but not forgive) the employee’s portion of Social Security taxes for certain employees for wages paid between September 1, 2020 and December 31, 2020. The Social Security tax is the 6.2% portion of the employment taxes taken out of employees’ paychecks. Also, President Trump tasked the Treasury Department with providing guidance to implement the order and also to explore ways to eliminate the obligation to [...]
SBA issues 23 FAQs on PPP Loan Forgiveness
In anticipation of PPP borrowers beginning to file applications for PPP loan forgiveness, the SBA issued 23 new FAQs. While they do not cover all needed guidance, answers were provided in the following categories: General Payroll costs Nonpayroll costs Wage and headcount reductions Meanwhile, legislation has been introduced to expand and extend the PPP loans. Some key provisions still under debate would: extend the PPP application deadline for small businesses from August 8 to December 31; allow some small businesses [...]
PPP Loan Application Deadline Extended Until August 8, 2020
Congress extended the Paycheck Protection Program (PPP) loan application deadline from June 30, 2020 until August 8, 2020. PPP loans are potentially forgivable loans designed to provide businesses with funds primarily to cover payroll costs during the 24 weeks following the loan (originally 8 weeks, but the program has been revised numerous times since its inception in March). Based on data from the SBA, as of June 30 there was over $130 billion left of unused funds for the PPP [...]
SBA issues REVISED PPP Loan Forgiveness Application
On June 16th, the SBA issued the REVISED Paycheck Protection Program (PPP) Loan Forgiveness Application and a new EZ Forgiveness Application. Generally, a borrower can apply to have PPP Loan amounts forgiven related to certain payroll and non-payroll costs paid during the “covered” period (generally either 24 weeks, or, if the loan was made before June 5, 2020, an 8-week period can be elected). The borrower must make certain certifications, some of which are: The funds were used for eligible [...]