Newsletters

INCREASED FLEXIBILITY FOR SECTION 125 CAFETERIA PLANS

The Internal Revenue Service (IRS) released guidance on May 12, 2020, to allow temporary changes to Section 125 cafeteria plans. The guidance addresses unanticipated changes in expenses because of the COVID-19 pandemic. IRS Notice 2020-29 provides greater flexibility for taxpayers by: extending claims periods for taxpayers to apply unused amounts remaining in a health FSA or dependent care assistance program for expenses incurred for those same qualified benefits through December 31, 2020 expanding the ability of taxpayers to make mid-year elections for health coverage, health FSAs, and dependent care assistance…

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STATE TAX DUE DATES VARY

The IRS extended the filing and payment deadline to July 15, 2020, for 2019 taxes due between April 1 and July 15, including 2020 1st and 2nd quarter estimated tax payments. Unfortunately, states did not consistently follow this direction. The AICPA has provided a chart with up-to-date state tax filing guidance (click here). All states with a personal income tax have extended the April 15, 2020, due date. 40 states have a July 15 deadline and 7 states have other dates. Some states have also updated their nexus guidance to…

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PPP Loan Under $2 Million Deemed to be Good Faith

On May 13, 2020, the SBA updated their Frequently Asked Questions (FAQ) document (click here) to include FAQ 46 in response to Paycheck Protection Program (PPP) loan applicants concerns about the requirements for good-faith certification concerning the necessity of their PPP loan request. SBA, in consultation with the Department of the Treasury, has determined that the following safe harbor will apply to SBA’s review of PPP loans with respect to this issue: “Any borrower that, together with its affiliates, received PPP loans with an original principal amount of less than…

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New 2020 RMD Withdrawal and Redeposit Rules

In March, the Corona Aid, Relief, and Economic Security (CARES) Act was passed to provide relief to individuals, small businesses, medical organizations and government entities. Although the CARES Act is best known for the stimulus check provision and Paycheck Protection Program (PPP) loans, it also included a provision to waive the required minimum distribution (RMD) requirement for 2020. What plans are covered? The waiver of the RMD applies to a broad range of retirement accounts, including IRA accounts; SEP and SIMPLE IRAs; defined contribution plan accounts under 401(a), 401(k), 403(a),…

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NEW PPP GUIDANCE – CERTIFICATIONS AND REVIEWS

Paycheck Protection Program (PPP) loan applicants certified that “Current economic uncertainty makes this loan request necessary to support the ongoing operation of the applicant.” Early in the process, this was understood to mean the pandemic had caused, or was expected to cause, economic hardship, including reduced revenue or operations. The CARES Act specifically stated that the general SBA “access to capital” rule was waived and all small businesses were deemed to be affected by economic injury. The SBA has since added more responses to their Frequently Asked Questions (FAQ) document…

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PPP EXPENSE DEDUCTIBILITY QUESTION

Many companies who received a loan under the Paycheck Protection Program (PPP) are now working to determine and document the expenses that qualify for loan forgiveness. The SBA has provided some interim rules, but final rules and clarity are not yet available. Per the SBA, the amount eventually forgiven will be non-taxable income to the business. The IRS issued an unexpected ruling on April 30, 2020, stating that expenses funded with forgiven PPP loans are NOT deductible. This will greatly impact the taxable income of companies who received a forgivable…

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Tax Filing Reminders

July 15th due date The following tax returns and payments with original or extended due dates on or after April 1, 2020, and prior to July 15, 2020 have been automatically extended to July 15, 2020. 2019 individual income tax returns 2019 gift tax returns Corporation income tax returns Partnership income tax returns Fiduciary income tax returns Exempt organization Forms 990, 990-EZ, 990-N and 990-T Private Foundation Form 990-PF 2019 Forms 990-T for retirement plans and IRAs Form 5500 series First installment of 2020 estimated tax Second installment of 2020…

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