CPA NEWS
Email News - 6/4/20 Changes in PPP Loan Forgiveness

Both the House and the Senate passed a bill to change the terms of PPP loan forgiveness last night, which is expected to sign it by Donald Trump.  The following summarized the changes:

 

  • Current PPP borrowers can choose to extend the eight-week period to 24 weeks, or they can keep the original eight-week period. New PPP borrowers will have a 24-week covered period, but the covered period can’t extend beyond Dec. 31, 2020. This flexibility is designed to make it easier for more borrowers to reach full, or almost full, forgiveness.

  • Under the language in the House bill, the payroll expenditure requirement drops to 60% from 75% but is now a cliff, meaning that borrowers must spend at least 60% on payroll or none of the loan will be forgiven. Currently, a borrower is required to reduce the amount eligible for forgiveness if less than 75% of eligible funds are used for payroll costs, but forgiveness isn’t eliminated if the 75% threshold isn’t met.  Rep. Chip Roy (Texas), who co-sponsored the bill in the House, said in a House speech that the bill intended the sliding scale to remain in effect at 60%. Senators Marco Rubio and Susan Collins indicated that technical tweaks could be made to the bill to restore the sliding scale.

  • Borrowers can use the 24-week period to restore their workforce levels and wages to the pre-pandemic levels required for full forgiveness. This must be done by Dec. 31, a change from the previous deadline of June 30.

  • The legislation includes two new exceptions allowing borrowers to achieve full PPP loan forgiveness even if they don’t fully restore their workforce. Previous guidance already allowed borrowers to exclude from those calculations employees who turned down good-faith offers to be rehired at the same hours and wages as before the pandemic. The new bill allows borrowers to adjust because they could not find qualified employees or were unable to restore business operations to Feb. 15, 2020, levels due to COVID-19 related operating restrictions.

  • New borrowers now have five years to repay the loan instead of two. Existing PPP loans can be extended up to 5 years if the lender and borrower agree. The interest rate remains at 1%.

  • The bill allows businesses that took a PPP loan to also delay payment of their payroll taxes, which was prohibited under the CARES Act.

Email News - 5/7/20 PPP 8 Weeks Starting Period & No Return Employees

8 Weeks Starting Period

 

Many people asked us when the eight (8) week forgiveness period starts.  It actually starts when you receive the PPP loan money.  You need to start using this loan money no later than ten calendar days from the date of loan approval.

 

More information: 

https://www.sba.com/funding-a-business/government-small-business-loans/ppp/faq/eight-week-forgiveness-period/

 

Employees Who Refuse to Return

 

Businesses that received PPP loans can exclude laid-off employees from loan forgiveness reduction calculations if the employees turn down a written offer to be rehired (get a written document).

 

More information: 

https://www.journalofaccountancy.com/news/2020/may/sba-ppp-guidance-on-laid-off-employees-refuse-to-be-rehired.html?utm_source=mnl:cpald&utm_medium=email&utm_campaign=05May2020

Email News - 5/4/20 PPP Forgiveness Guide

Congratulations to those of you who got the PPP loans.  For those who are still waiting for the loans, we wish you to get them ASAP.

 

Now, we are receiving questions as to how the process of loan forgiveness works.  You will get an application for loan forgiveness that will be processed by your bank. They will provide you with instructions. 

 

After you submit your application for forgiveness, your bank is required to provide you with a response within 60 days.  You will need to provide the required documents again to prove the forgivable expenditures.

 

Besides your bank's instructions, the following site summarized in detail how to determine the forgivable amounts:

 

https://bench.co/blog/operations/ppp-loan-forgiveness/ 

Email News - 4/21/20 Senate Approves $370B in Additional Funding

The Senate on Tuesday approved $370 billion in additional funding for small businesses through programs administered by the U.S. Small Business Administration (SBA) as part of a new COVID-19 pandemic relief bill.

The relief bill passed in the Senate by unanimous consent and moves to the House, which will convene to consider the package, with a vote expected Thursday. President Donald Trump said in a tweet that he would sign the legislation.

Read more details: https://www.journalofaccountancy.com/news/2020/apr/senate-approves-more-small-business-funding-ppp-loans-coronavirus-relief-.html?utm_source=mnl:alerts&utm_medium=email&utm_campaign=21Apr2020&utm_content=headline

Email News - 4/20/20 $5,000 Grant from U.S. Chamber of Commerce Foundation

One of our clients informed us of the following program offered by the U.S. Chamber of Commerce Foundation.

 

The US Chamber of Commerce Foundation has opened Small Business Grants of $5,000. Funded by corporate and philanthropic partners, the Save Small Business Fund is a collective effort which provides $5,000 grants to as many small business employers as possible. The hope is that these supplemental funds will help you get through the next days and weeks as we battle this unprecedented time.

To Qualify, a Small Business Must:

  • Employ between 3-20 people

  • Be located in an economically vulnerable community

  • Have been harmed financially by the COVID-19 pandemic

  • Enter Zip Code of business location to see if you are eligible: https://savesmallbusiness.com/

How to Apply:

  • Short app to go live on April 20, 2020 at 12:00 pm PT on this site (option to receive email notification): https://savesmallbusiness.com/

  • Application will be short (approx. 10 minutes to complete)

  • All you need is your business’s W-9 form  https://www.irs.gov/pub/irs-pdf/fw9.pdf

  • Grants awarded on a rolling/weekly basis, only need to apply one time to be eligible for funding.

  • Once grantee is notified and has submitted payment information, it will take 3-5 days to process payment.

  • Number of grants awarded will be scaled in proportion to demand and available funds.

Use of Funds:

  • Must be used toward business expenses.

Email News - 4/16/20 $1,200, PPP & NOL

$1,200 Payments – Find Out the Status

The IRS announced Wednesday the launch of its “Get My Payment” website, which permits taxpayers to check on the date they can expect to receive their economic impact payment and update their direct deposit information.

No More Money for PPP

The U.S. Small Business Administration stopped accepting applications for the Paycheck Protection Program after exhausting the initial $349 billion in funding provided by Congress to fund forgivable loans to small businesses impacted by the COVID-19 pandemic. 

 

The SBA, which is administrating the program with Treasury, posted a statement on its website saying that it is currently unable to accept new PPP applications based on available appropriations funding. The SBA also said it is unable to enroll new PPP lenders at this time. 

People are urging Congress to swiftly approve additional funding for the program. 

The Small Business Administration (SBA) warned Wednesday night that it soon will no longer be able to extend loans to small businesses as negotiations between Treasury Secretary Steven Mnuchin and Senate Democratic Leader Charles Schumer (N.Y.) failed to produce a deal.  

Company Losses Can Be Carried Back 5 Years for Refund

The CARES Act, which was signed by President Trump on March 27, 2020, amends the net operating loss (NOL) provisions to allow for the carryback of losses arising in taxable years ending after December 31, 2017, and before January 1, 2021, to each of the five taxable years preceding the taxable year of such loss. 

Email News - 4/10/20 IRS Free File

The IRS has set up a website to register for Economic Impact

Payments (up to $1,200 for individuals or $2,400 for married couples and 

$500 for each qualifying child).  If you filed your tax return 2018 or 

2019, receiving the Social Security monthly payment or provided 

your bank information via your tax returns, you do not have to do

anything.  You will receive the payment through your bank or a 

check automatically.  The payments will start next week.

 

For those of you who do not normally file a tax return or receive 

the monthly Social Security payment, the IRS has set up a website 

to register for the payment.  Visit the following site to register:

 

https://www.freefilefillableforms.com/#/fd/EconomicImpactPayment  

Email News - 4/7/20 Foreign Owned Companies
 

With respect to the SBA loan programs (including the PPP), there is the affiliation rule that requires a company to include employees of both its domestic and foreign affiliates to count 500 or fewer employees.  You can read it from the following link:

 

https://www.sba.gov/sites/default/files/2018-09/2018-07-13%20AFFILIATION%20GUIDE_Updated%20%281%29.pdf 

 

However, The National Law Review provided the following information:

Applicants in the Small Business Administration’s (SBA) Business Loan Programs (which include the Paycheck Protection Program (PPP)) are generally subject to the affiliation rule in 13 CFR Section 121.301, subject to certain statutory waivers.  These rules provide that in determining a concern’s size, the SBA counts the employees of both the concern whose size is at issue and all of its domestic and foreign affiliates, regardless of whether the affiliates are organized for profit.  Based on this language, an employer would be required to count all employees (including those of foreign affiliates) in determining whether an entity has 500 or fewer employees for the PPP.

Yet in an Interim Final Rule, the SBA has indicated that an entity generally is eligible for the PPP if it, combined with its affiliates, has 500 or fewer employees whose principal place of residence is in the United States.  This language in the Interim Final Rule directly conflicts with the way employees are counted under the affiliation rules in 13 CFR Section 121.301.

We are hoping that the SBA will provide clarifying guidance, but it appears (at least for now) that domestic entities with a foreign affiliate(s) who previously thought they did not qualify for the PPP because of being required to count foreign employees may indeed be eligible for loans under the PPP.

https://www.natlawreview.com/article/do-employers-count-employees-foreign-affiliates-when-determining-eligibility-under

 

Last night (Monday, 4/6/20), the SBA published Frequently Asked Questions on the PPP and had the following related information:

 

  5. Question: Are borrowers required to apply SBA’s affiliation rules under 13 C.F.R. 121.301(f)? 

 

      Answer: Yes. Borrowers must apply the affiliation rules set forth in SBA’s Interim Final Rule on Affiliation. A borrower must certify on the Borrower Application Form that the borrower is eligible to receive a PPP loan, and that certification means that the borrower is a small business concern as defined in section 3 of the Small Business Act (15 U.S.C. 632), meets the applicable SBA employee-based or revenue-based size standard, or meets the tests in SBA’s alternative size standard, after applying the affiliation rules, if applicable. SBA’s existing affiliation exclusions apply to the PPP, including, for example the exclusions under 13 CFR 121.103(b)(2).  

 

This information still not clear for the PPP affiliation rule because The National Law Review had already interpreted the SBA's Interim Final Rule on Affiliation that a company has 500 or fewer employees whose principal place of residence is in the United States is eligible.  Thus, hopefully the lenders, particularly banks, get a clear interpretation from the SBA so they can process the PPP for foreign-owned companies.

Email News - 4/6/20 Various States' Grants, Loans, Tax Reliefs. Etc.

ow, various states and cities are coming out with their own small grants, loans, tax reliefs, etc. for small businesses.  Thus, you should review their assistances.

 

NJ Economic Assistance for Businesses

https://faq.business.nj.gov/en/collections/2198378-information-for-nj-businesses-on-the-coronavirus-outbreak 

 

NYC Assistance & Guidance for Businesses

https://www1.nyc.gov/site/sbs/businesses/covid19-business-outreach.page  

 

MA Resources & Guidance for Businesses

https://www.mass.gov/info-details/covid-19-resources-and-guidance-for-businesses 

 

CA Financial and Technical Assistance for Small Business

https://business.ca.gov/coronavirus-2019/ 

 

For other states and cities, you should search online for the information.

Email News - 4/6/20 PPP & Foreign Owned Companies

It is a real mess at the moment for processing the PPP and EIDL loans by the SBA, banks and the government as they are not really ready. 

 

It appears nobody got the $10,000 grant under the EIDL program even though they said they will send out a check within 3 days after applying and the program started more than 2 weeks ago.  Interpretations and interim regulations keep coming out but nothing has been finalized as of yet.

 

At any rate, another mess area is that the PPP loans related to foreign-owned companies.  As I have been paying attention to this subject from our last CPA News, I was able to locate this information published by The National Law Review today.  Here is what it says:

 

The Small Business Administration (“SBA”) in its implementation of the CARES Act just released an updated loan application form for borrowers who want to avail themselves of Title I – Paycheck Protection Program (“PPP”) loans. This form may be found here.

In this updated form, the SBA removed the indication which was included in the previous form that if the borrower has any 20%or more owner that is not the U.S., the loan will be denied.

 

As a result, all US businesses, whether or not they are owned by foreign companies should be able to avail of the Title I – PPP loan program so long as the size eligibility requirements (no more than 500 employees (inclusive of affiliates) or “small business issuer” per the NAICS classification) and other eligibility requirements are met.

 

So far this is what we learned and nobody knows what will be the final regulations.  So, we suggest that you talk to your bank with this information to see if they can accept your application. Visit the website for the above explanations:

 

https://www.natlawreview.com/article/paycheck-protection-program-loan-applications-are-opening-today-eligibility-small-us

 

Newsletter Disclaimer - We are distributing publicly available information on a pro bono basis so you can be abreast of the latest developments in this difficult situation.  The information is not advice and should not be treated as such.  You are responsible to ensure the information is ultimately correct and complete.  Thus, we accept no liability from any action you may take from the information provided.

Email News - 4/3/20 Economy Injury Disaster Loan (EIDL) Program
 

We have informed you about the Economy Injury Disaster Loan (EIDL) Program on 3/23/20 and linked the Small Business Association (SBA) site for more information.  However, we are getting more questions about the EIDL program.  Thus, let us summarize it here so you have a better understanding.

 

SBA provides low-interest (up to 3.75%) loans to small businesses that have been impacted by the coronavirus.  The loans for up to $2 million are for working capital for economic support to small businesses to help the temporary loss of revenue.  The repayment term is up to 30 years. Small (less than $200,000) loans are also available without personal guarantees. 

 

The principal and interest payments can be delayed up to four years. Once you get the loan, you can refinance your EIDL loan into a Paycheck Protection Program (PPP) loan.  When you apply for the EIDL loan, you will get a grant advance of $10,000 that will be provided within 3 days.

 

This grant does not need to be repaid, even if your loan application is subsequently denied, and if spent on "maintaining payroll and other operating expenses." To be eligible for the grant, you must have been in business on 1/31/20.  This grant will be reduced the PPP forgivable loan.

 

There are no upfront fees or early payment penalties charged by SBA.  The replacement term will be determined by your ability to repay the loan.  Generally, loans over $25,000 require collateral but SBA will not decline a loan for lack of collateral. Generally, it takes 18-21 days to get approval and another 5 days to get money.

 

Apply for the loan directly online through SBA's secure page: https://www.sba.gov/page/disaster-loan-applications

 

Once you have completed the information and submitted your application, you will receive a confirmation email with an application number.  If the SBA approves your loan, they may request additional information before closing.

 
Email News - 4/3/20 Latest Rules & Resources of PPP

The following are the latest interpretations, regulations, and resources (attached) of loans under the CARES Act.

 

SBA Issues an Interim Final Rule for PPP

https://www.journalofaccountancy.com/news/2020/apr/paycheck-protection-program-ppp-loans-sba-details-coronavirus.html?utm_source=mnl:alerts&utm_medium=email&utm_campaign=03Apr2020&utm_content=headline

Attached Are the Latest PPP Loan Application, AICPA PPP Loan Worksheets and Loan Snapshots

AICPA prepared its own versions of PPP loan worksheets (calculators), which are attached here, and they have incorporated the latest PPP regulations as of April 2.

Latest PPP loan application

https://d1fecfae-7942-4d07-a676-3c7081231c1c.usrfiles.com/ugd/d1fecf_1b366f19fc6b4275a2d2658bf3779e3a.pdf

AICPA PPP payroll calculators for loan application
The PPP provides three scenarios for calculating maximum loan amounts depending on how long the business has been in operation and whether it’s seasonal. They’re designed so that your client can complete them following the steps outlined in the calculator.

SBA loan snapshot
A resource to help your clients get a basic understanding of SBA loan options

    

PPP Eligibility Under the Affiliates Rules (May Apply to Foreign-Owned Companies)

Applicants under the PPP will be aggregated with their “affiliates” for purposes of determining whether they constitute an eligible small business for purposes of counting employees against the 500-person threshold.

Entities (whether U.S. or foreign) are considered affiliates where one has the power to control the other, or the entities are under the common control of a third party, whether by ownership, common management or contractual relationships. Non-U.S. employees of an affiliate count toward the 500-employee threshold.

For example, a company with 100 employees fails to meet the 500-employee limit if its sponsor also owns three other portfolio companies with 150 employees each, even if all of the employees of these other companies report to work abroad.

 

Confirm Eligibility and Contact Your Lender Now  

PPP loans under the CARES Act will be disbursed by banks directly to borrowers, not by the SBA itself. Therefore, SBA will need to create and issue final rules before banks will make PPP loans. The SBA's interpretation of the CARES Act language stating "in addition to small business concerns" could be an interesting development as final rules are developed.

  

By a clear reading of the statute, the PPP program should be available to businesses that meet the above employee count criteria "in addition to small business concerns" that qualify under SBA's other regulations (i.e., annual receipts), even though they may exceed 500 employees.

An open question exists about how SBA will implement that language. While banks cannot make these loans until they know the final rules, businesses should not wait until the final implementation of SBA's regulations to contact their lenders.

Economic Injury Disaster Loan Program (EIDL)

BA's regulations at 13 CFR 123.300, et. seq. describe who is eligible for SBA's EIDL loans and confirm that EIDL loans are available only if the organization was a small business or a private non-profit organization at the time the declared disaster commenced. Under SBA's size regulations, it confirms that an applicant must meet the following two criteria to be a small business eligible for EIDL loans:  

 

1.     Size of the applicant alone (without affiliates) must not exceed the size standard designated for the industry in which the applicant is primarily engaged; and
 

2.     Size of the applicant combined with its affiliates must not exceed the size standard designated for either the primary industry of the applicant alone or the primary industry of the applicant and its affiliates, whichever is higher. These size standards are set forth in §121.201.

 

EIDL loans offer up to $2 million in assistance, carry an interest rate of 3.75 percent, and have a maximum term of 30 years. 

Once you got the EIDL loan, you can refinance your PPP loan from your existing EIDL loan.  Thus, some people are applying the EIDL, which is already set up and processing, while PPP loans are still setting up and working out by banks and the SBA at the moment.

 

Newsletter Disclaimer - We are distributing publicly available information on a pro bono basis so you can be abreast of the latest developments in this difficult situation.  The information is not advice and should not be treated as such.  You are responsible to ensure the information is ultimately correct and complete.  Thus, we accept no liability from any action you may take from the information provided.

Email News - 4/1/20 PPP Loan Applications & Latest PPP Information
 

For applications for small-business PPP which to be opened on Friday, 4/3/20, and more latest PPP information, visit:

 

https://www.journalofaccountancy.com/news/2020/mar/paycheck-protection-loan-for-small-businesses-coronavirus-pandemic.html?utm_source=mnl:cpald&utm_medium=email&utm_campaign=01Apr2020 

 
 
Email News - 3/31/20 $1,200 Payment & PPP Worksheet v2.1
 

Attached is the PPP Worksheet v2.1, and the following is about the $1,200 stimulus payment.

(Download the PPP Worksheet v2.1 - Sample)​

https://d1fecfae-7942-4d07-a676-3c7081231c1c.usrfiles.com/ugd/d1fecf_ec3831b66948458f9743064b86a1b993.xlsx

 

Economic impact payments:
What you need to know
Check IRS.gov for the latest information: No action needed by most people at this time

 

IR-2020-61, March 30, 2020

WASHINGTON – The Treasury Department and the Internal Revenue Service today announced that distribution of economic impact payments will begin in the next three weeks and will be distributed automatically, with no action required for most people. However, some seniors and others who typically do not file returns will need to submit a simple tax return to receive the stimulus payment.

Who is eligible for the economic impact payment?
Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible.

Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples. Parents also receive $500 for each qualifying child.

How will the IRS know where to send my payment?
The vast majority of people do not need to take any action. The IRS will calculate and automatically send the economic impact payment to those eligible.

For people who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. The economic impact payment will be deposited directly into the same banking account reflected on the return filed.

The IRS does not have my direct deposit information. What can I do?
In the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail.

I am not typically required to file a tax return. Can I still receive my payment?
Yes. People who typically do not file a tax return will need to file a simple tax return to receive an economic impact payment. Low-income taxpayers, senior citizens, Social Security recipients, some veterans and individuals with disabilities who are otherwise not required to file a tax return will not owe tax.

How can I file the tax return needed to receive my economic impact payment?
IRS.gov/coronavirus will soon provide information instructing people in these groups on how to file a 2019 tax return with simple, but necessary, information including their filing status, number of dependents and direct deposit bank account information.

I have not filed my tax return for 2018 or 2019. Can I still receive an economic impact payment?
Yes. The IRS urges anyone with a tax filing obligation who has not yet filed a tax return for 2018 or 2019 to file as soon as they can to receive an economic impact payment. Taxpayers should include direct deposit banking information on the return.

I need to file a tax return. How long are the economic impact payments available?
For those concerned about visiting a tax professional or local community organization in person to get help with a tax return, these economic impact payments will be available throughout the rest of 2020.

Where can I get more information?
The IRS will post all key information on IRS.gov/coronavirus as soon as it becomes available.

The IRS has reduced staff in many of its offices but remains committed to helping eligible individuals receive their payments expeditiously. Check for updated information on IRS.gov/coronavirus rather than calling IRS assistors who are helping process 2019 returns.

 
 
Email News - 3/31/20 PPP Sample Worksheet v2

As more interpretations are available, we have updated and attached our PPP Worksheet (Sample) v2 to calculate the potential forgivable loan amount.  Again, this is "free money" the government is willing to give to small businesses during this horrendous situation.  This PPP loan is a new loan program so you need to apply it anew.  However, it will take time for the government to work with the SBA and banks to fully implement the loan applications.

https://d1fecfae-7942-4d07-a676-3c7081231c1c.usrfiles.com/ugd/d1fecf_22a64aef8bf849f083028f3691b2dc5b.xlsx

 

Even though a small NYC bank, Savoy Bank, came up with a website for the PPP loan, they are also saying: "Details and requirements are changing rapidly. The content on this page will be updated regularly as Treasury Secretary and the SBA release more detailed information."  We believe it is better to work with your current bank (most banks offer SBA loans) as they know you already and have some information about your business.

 

The following are more financial aid packages from the CARES Act.

 

Employee Retention Tax Credit

The Act offers tax credits to employers that have seen their operations shuttered or partially shuttered because of COVID-19.

The credits can go as high as 50% of qualified wages paid to an employee between March 13, 2020, and the end of the year. These credits max out at $10,000 per employee. They also apply only to employment taxes, such as FICA, federal unemployment taxes, and Social Security taxes. And they cannot be taken alongside other coronavirus-related benefits, such as credits for paid leave under the FFCRA or Paycheck Protection loans.

To qualify for the credits, the employer must experience (a) a full or partial shutdown because of a government order related to COVID-19, or (b) a decline in revenues of 50% or more from the same period last year. Qualifying employers with 100 employees or fewer can take a credit for all qualifying wages. Larger companies with more than 100 employees can also take a credit, but only for wages paid to employees who are not working because of reasons (a) or (b).

Deferral of Payroll Taxes

The Act allows employers to defer Social Security taxes. Any deferred payment would need to be paid over the next two years, with half due by December 31, 2021, and the rest due by December 31, 2022.

Expanded Unemployment Insurance

The Act pumps $250 billion dollars into the unemployment insurance system. These new benefits are available to nearly every employee displaced by COVID-19—and even to some not considered employees at all.

The Act expands benefits by raising the maximum payment across the board by $600 per week. That expansion alone works out to $15 an hour for a 40-hour week. The Act also extends benefits for 13 weeks beyond what states already allow.

Any employee unable to work because of COVID-19 can apply for the benefits. Some self-employed workers and independent contractors can also apply. Worker cannot apply, however, if they have the ability to telework. Nor can the worker apply while receiving other coronavirus-related benefits, such as paid leave under the FFCRA.

Many questions remain about these provisions. For example, it is not yet clear who decides when an employee can telework. And some have already expressed concerns about the Act’s potential negative incentives. By disconnecting weekly benefits from an employee’s earnings, the Act may make it possible for employees to earn more in unemployment benefits than they earn by working.

 

Immediate Tax Credits for FFCRA Leave

The Act gives employers an immediate way to pay for leave under the FFCRA.

The FFCRA created two new paid-leave programs: (1) two weeks’ paid emergency sick leave, and (2) up to 12 weeks’ emergency family and medical leave, the first two weeks of which are unpaid, but as a practical matter, likely to be compensated by way of emergency paid sick leave. This leave is generally paid at the employee’s regular rate (or 2/3 of that rate for family leave), subject to certain dollar-value caps. The Act helps employers pay for those new benefits by providing an advance tax credit immediately, rather than recovering the money after paying.

Beyond that, it is not yet clear how the credits will be implemented. The Act gives the treasury secretary authority to implement the credits by regulation. More guidance is expected in the coming days.

Agencies like the Department of Labor, the Internal Revenue Service, and the Small Business Administration are working to provide guidance and procedures for many of these new programs.  Indeed, the information available about all these programs changes daily, if not hourly. Because the Act raises complex and novel questions about interpretation and compliance, employers should consult with legal counsel. For employers seeking loans under the Act’s various new programs, it is especially important that they understand the programs’ rules and requirements before committing.

Newsletter Disclaimer - We are distributing publicly available information on a pro bono basis so you can be abreast of the latest developments in this difficult situation.  The information is not advice and should not be treated as such.  You are responsible to ensure the information is ultimately correct and complete.  Thus, we accept no liability from any action you may take from the information provided.

Email News - 3/30/20 PPP Sample Worksheet

Since we are getting many inquiries about loan forgiveness

and related forgivable expenses/payments, we have prepared a

worksheet for you to calculate them.

 

Some terms under the CARE Act are not so clear so we see some

conflicting interpretations are coming out right now.  The worksheet

has been prepared based on what we learned so far.

 

Thus, we will fine-tune the terms and the worksheet as more 

interpretations are available.  The government will work with SBA & 

SBA loan administrating banks for loan applications during this week.

 

We also attached the CARES Act Key Points & FAQs.

https://d1fecfae-7942-4d07-a676-3c7081231c1c.usrfiles.com/ugd/d1fecf_f58155555187424b93a2b37ca056a347.pdf

PPP Sample Worksheet:

https://d1fecfae-7942-4d07-a676-3c7081231c1c.usrfiles.com/ugd/d1fecf_2d25709ba44845df885e6a416a25d349.xlsx

Email News - 3/29/20 Loan Forgiveness (Part II)

We have received various inquiries about Loan Forgiveness under the Paycheck Protection Program (PPP) to help small businesses.  Again, you can obtain this loan to pay salaries, health insurance, rent, payroll taxes, utilities, mortgage payments, interest on the debt, etc. for 8 weeks (almost two months).  Small businesses also include sole proprietors, self-employed individuals and independent contractors.

 

Any fees for the loan forgiveness for 8 weeks and interest thereof would be free.  If you rehire any employees who are recently terminated, you are still qualified for loan forgiveness.  The government is trying to help small businesses to retain their employees and continue their business in this difficult time.  

 

Today, the government vows to start this emergency loan during the coming week (by Friday) as SBA administrating banks and agencies are not ready with new PPP loans.  For more information on PPP, review this summary: https://www.nohcpa.com/paycheck-protection-program-overvie The government is doing all they can to help small businesses to continue their operations so the U.S. economy would not face a crash.

Email News - 3/28/20 Loan Forgiveness
 

From our previous CPA News today on Loan Forgiveness, we have received several inquires.  In addition, we are now getting more information.  Visit the link below to learn more about the forgiveness of loans under the Paycheck Protection Program.  

 

The following expenses and payments are qualified for loan forgiveness:

 

o Employee salary or wages, cash tips, or equivalent payments

o Vacation, parental, family, medical, or sick leave payments (exclusive for which a tax credit is allowed under Section 7001 or 7003 of the Families First Coronavirus Response Act)

o Payment required for the provisions of group healthcare benefits, including insurance premiums

o Payment of any retirement benefit

o Payment of state or local tax assessed on the compensation of employees

o Mortgage payments, rent, and utility payments

o Interest on debt obligations previous to Feb. 15, 2020

 

https://www.rubio.senate.gov/public/_cache/files/ac3081f6-14ae-4e6f-9197-172ede28badd/71AB6CB05A08E369E0D488A80B3874A5.faqs---paycheck-protection-program-faqs-for-small-businesses.pdf 

 

https://eig.org/wp-content/uploads/2020/03/Understanding-the-Paycheck-Protection-Program.pdf 

 
Email News - 3/28/20 Loan Forgiveness (in Korean)
 

Loan Forgiveness와 관련 정리된 사이트를 보내 드리오니 참고 하시고 보조금을 신청하는 절차를 검토해 보시기 바랍니다.

 

https://jobkoreausa.com/community/view.html?no=563&fbclid=IwAR07l_twCGwUrVikadm-BwrlmKIhEygBWwFQm0lthDKPOF0ZTp3N6HsEe2E&mc_cid=83ba9385de&mc_eid=8f45582bb3  

 
Email News - 3/28/20 - Coronavirus Aid, Relief and Economic Security (CARES) Act

Coronavirus Aid, Relief and Economic Security (CARES) Act was passed by the Senate on 3/25/20 and the House on 3/27/20, which was signed by the President on the same day.  Now, the detail of the Act is starting to come out.  See the link below to see the summary prepared by EY on 3/26/20.

 

One very helpful aid is the following loan forgiveness in the summary:

 

Loan Forgiveness. This establishes that borrowers will be eligible for loan forgiveness equal to the amount spent by the borrower for the portion of the loan used to cover payroll and payments on pre-existing debt incurred prior to 15 February 2020. Loan forgiveness is conditional upon a borrower retaining their employees and payroll levels during the covered period. Forgiveness will be proportionally reduced by the number of layoffs and reductions in wages over 25%.   

 

https://assets.ey.com/content/dam/ey-sites/ey-com/en_us/topics/public-policy/ey-opp-cares-act-overview.pdf  

Essential businesses defined by NY, NJ and CT

 

https://1010wins.radio.com/articles/whats-an-essential-business-the-ny-nj-orders-explained  

 

Newsletter Disclaimer - We are distributing publicly available information on a pro bono basis so you can be abreast of the latest developments in this difficult situation.  The information is not advice and should not be treated as such.  You are responsible to ensure the information is ultimately correct and complete.  Thus, we accept no liability from any action you may take from the information provided.

Email News - 3/27/20  Family First Coronavirus Response Act

 

President Trump signed the Families First Coronavirus Response Act (Act) on March 18, 2020, to provide financial aids for small businesses with fewer than 500 employees.
 
1. If an employee is quarantined or tested positive for the coronavirus, he/she can receive 100% of the salary for up to two weeks (80 hours) (Paid Sick Leave). The amount to be paid is his/her salary or $511 per day ($5,110 for 10 days), whichever is less.

2. If an employee cares for a quarantined individual or if his/her child's school is closed due to this incident and a child care institution is not available, the employee can receive two-thirds (2/3) of his/her salary for up to two weeks (80 hours) (Paid Sick Leave). The amount to be paid is 2/3 of his/her salary or $200 per day ($2,000 for 10 days), whichever is less.

 

For small businesses with fewer than 50 employees, this provision related to caring for a child is exempt if the viability of the business is threatened.
 

3. In the case of #2 above, the employee can receive an additional maximum of 10 weeks' pay (Paid Expanded Family and Medical Leave). Employees must have been working for at least 30 days. The amount to be provided is 2/3 of his/her salary or $200 per day ($10,000 for 50 days), whichever is less.


Employers can reduce their current payroll taxes due to the IRS for salaries provided under this Act. If the amount paid is more than the payroll taxes, then either the excess amount could be used to reduce the future payroll taxes or request for a quick refund by sending an application to the IRS.

Health insurance premiums can be included in the above salary calculations, and self-employed individuals can benefit just like employees. This subsidy is an emergency aid provided by the U.S. government, so you should take the benefits if you have affected employees or self-employers.

 

Refer to the following sites for more information:

 

https://www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus  

 

Dept. of Labor on Families First Coronavirus Response Act

 

The U.S. Dept. of Labor has provided the first round of published guidance.

 

https://www.njcpa.org/stayinformed/explore/topics/full-article/2020/03/25/dol-provides-guidance-on-the-families-first-coronavirus-response-act

Email News - 3/27/20  Family First Coronavirus Response Act (in Korean)

대통령이 3월 18일자로 Families First Coronavirus Response Act  라는 법에 서명함에 따라, 직원수가 500명 미만의 중소기업에 대한 재정 구호 대책으로 제공 됩니다.

 

1. 직원이 자가 격리하거나 확진자일 경우 급여 100%를 최대 이주동안 (80 시간) 받을수 있습니다 (Paid Sick Leave). 제공할 금액은 본인이 받던 급여나 아니면 하루에 $511 (10일에 $5,110), 두 금액중 적은 금액.

 

2. 직원이 격리자를 돌보거나 자녀 학교가 이번 사태로 문을 닫거나 보육 기관을 이용할 수 없는 경우 본인 급여의 2/3 을 최대 이주동안 (80 시간) 받을수 있습니다 (Paid Sick Leave). 제공할 금액은 본인 받던 2/3의 급여나 아니면 하루에 $200 (10일에 $2,000), 두 금액중 적은 금액.

 

50명 미만의 소기업에 한하여 사업채가 제정적 힘든 상황에 처해있다면 자녀를 돌보기 위한 Paid Sick Leave 관련 조항은 면제가 가능합니다.  

 

3. 위에 2번일경우, 추가로 최대 10주까지 급여을 받을수 있습니다 (Paid Expanded Family and Medical Leave). 직원은 일한지 적어도 30일 이상이 되어야 함. 제공할 금액은 본인 받던 2/3의 급여나 아니면 하루에 $200 (50일에 $10,000), 두 금액중 적은 금액.   

 

고용주는 위에 지급된 금액을 국세청에 봉급과 관련 현재 낼 세금을 줄일수 있으며 지급된 금액이 세금낼 금액보다 많으면 앞으로의 세금을 더 줄이던지 아니면 자금 필요할경우 신청서을 작성하여 보내면 지급 받을수 있습니다.

 

위에 급여 계산에 건강보험료를 포함할수 있으며 또한 자영사업자 (Self-Employed Individual) 들도 직원처럼 혜택을 받을수 있습니다. 이 보조금은 국세청에서 제공하는 긴급 부양책으로서 해당되는 직원이나 자영사업자들께서는 신청하시기 바랍니다.

 

자세한 사항은 아래의 웹사이트들을 참조하십시요.

 

https://www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus  

 

Dept. of Labor on Families First Coronavirus Response Act

 

The U.S. Dept. of Labor has provided the first round of published guidance.

 

https://www.njcpa.org/stayinformed/explore/topics/full-article/2020/03/25/dol-provides-guidance-on-the-families-first-coronavirus-response-act

Email News - 3/26/20 Extended Federal & States Filing Deadlines

Here is the information about the extended filing due dates of tax returns:

 

IRS Answers Filing and Payment Deadline Questions

 

The IRS has published answers to frequently asked questions about filing and payment deadlines.

 

https://www.irs.gov/newsroom/filing-and-payment-deadlines-questions-and-answers  

 

Status of State Tax Filing Deadlines

 

Get an update on tax filing extensions in NJ, NY, PA and other states.

 

https://www.njcpa.org/stayinformed/explore/topics/full-article/2020/03/24/status-of-new-jersey-new-york-and-pennsylvania-tax-filing-deadlines

Email News - 3/25/20

U. S. lawmakers and members of the Trump administration early Wednesday came to an agreement on a massive stimulus measure ($2 trillion) to try to keep Americans whole as the economy shuts down due to the coronavirus.

 

The package includes direct deposits for all Americans (most adults would receive direct payments of $1,200, while children would see $500 checks.), $367 billion for loans to small businesses and an unprecedented program that will allocate $500 billion to the Treasury Department. 

 

Some of that money will be used to guarantee a Federal Reserve loan program for small and medium-size businesses. The director of the White House’s National Economic Council said the funds could be leveraged into $4 trillion of lending through the Fed.

 

Hospitals would receive some $150 billion under the deal and small businesses would get $367 billion in aid.  The measure also includes a major boost to unemployment insurance, allowing workers who are furloughed but not laid off to be paid their regular salaries for up to four months.

 

For the $367 billion in loans for small businesses, if the companies don’t make any changes to payroll then these loans will be forgiven.  

 

Speaker of the House Nancy Pelosi said the House could pass the bill quickly by unanimous consent. There is a risk that any member could object, which could lead to the need for a regular roll-call vote.

 

There will be more detail information after the bill passed.

Email News - 3/23/20

The coronavirus economic bill did not pass as Democrats claim it 

is too favorable to Wall Street than Main Street (general working

people).  Both parties agreed to keep negotiating.

 

For your information, the U.S. Small Business Administration offers an 

Economic Injury Disaster Loan Program to small business owners in 

all U.S. states and territories affected by the coronavirus.

 

https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources

 

​If you are a business owner (sole proprietorship, ​S corp. LLC-non

corporation or partnership) who is on the payroll (receiving W-2),

you can claim the state unemployment benefits.

 

Visit your state unemployment insurance online site to apply for an

application.  For example, type "NY Unemployment Insurance" and

you will see the following site:

 

https://labor.ny.gov/unemploymentassistance.shtm  

 

​​Wishing everybody to stay healthy and in a good spirit.

 

 

Email News - 3/22/20

The coronavirus economic relief bill being finalized by the U.S. Congress will include a one-time $3,000 payment for families and allow the Federal Reserve to leverage up to $4 trillion of liquidity to support the nation’s economy, U.S. Treasury Secretary Steven Mnuchin said today.

  

Mnuchin said the additional liquidity measures would allow the U.S. central bank to help a broad base of businesses to get through next 90 to 120 days.

Trump administration officials hoped to finalize the legislation on Sunday and see a vote on Monday, Mnuchin said, adding that further steps could be taken if the crisis did not abate in 10 to 12 weeks.

Email News - 3/21/20

NY and NJ Governors ordered non-essential businesses, not specifically

defined but likely not related to grocery stores, delivery, and pharmacies, 

to shut down due to the coronavirus outbreak.

 

To work at home, you can use the following "free" software to connect

to your company server if you do not already have the connection.

 

1) TeamViewer https://www.teamviewer.com/en-us/

2) Goggle Chrome Remote Desktop https://remotedesktop.google.com/

 

President Trump has already signed into law a $100 billion-plus bill

to boost testing for the coronavirus and guarantee paid leave for 

millions of workers affected by it.

Email News - 3/20/20

Here are the latest updates and useful information.

 

Federal Tax Filing Deadline Extended to July 15

Treasury Secretary Mnuchin announced today that the U.S. tax filing deadline will be extended to July 15. 

There is still no definitive word about the New Jersey tax filing deadline. We are hopeful the New Jersey Division of Taxation and other states will follow the IRS’ lead as many have done in the past. 

 

Benefits from State Unemployment Insurance  

 

Employees of businesses that are closed voluntarily or ordered due to COVID 19, they can claim the unemployment insurance benefits.  Thus, visit the state unemployment insurance site or visit the following U.S. Dept. of Labor site, which explains and directs to the state sites.  For your information, we have attached the NJ benefits available chart among unemployment insurance, earned sick leave, temporary disability/family leave insurance and workers' compensation under the coronavirus scenarios.

 

https://www.dol.gov/general/topic/unemployment-insurance  

 

Earned Sick Leave Law    

 

Beginning from February 26, 2019, NJ employees can take earned sick leave up to 40 hours per year to care for themselves or a family member. Employees can earn one hour of paid sick time for every 30 hours of work.  Employers can offset their paid time off, including paid vacation, to this requirement.  For more information, see the attached NJ Employee FAQs Earned Sick or visit state sites covering the earned sick leave law (i.e., search NY earned sick leave law).

 

 

Tax Credits for Employers   

 

The coronavirus relief bill signed by President Trump contains several tax credits for employers who provide paid sick leave or family or medical leave for their employees who miss working for various coronavirus related reasons.  Visit the following link for more information:

 

https://www.journalofaccountancy.com/news/2020/mar/coronavirus-relief-bill-tax-credits-for-employers-23225.html?utm_source=mnl:cpald&utm_medium=email&utm_campaign=20Mar2020

Email News - 3/19/20

Here is the latest development for Bergen County.

 

The planned retail shutdown in Bergen County is canceled at the governor's 

order. The original order was set to go into effect on Saturday morning but it

was withdrawn at the request of the governor.

 

Bergen's malls will remain closed. The governor issued an order on Tuesday

that largely shut them down. 

Email News - 3/18/20

Here are the latest developments as of 2:30 PM today.

 

Federal
Treasury Secretary Mnuchin announced on March 17 a series of tax relief measures designed to assist taxpayers and tax preparers during the coronavirus pandemic. During the press conference, he announced that individuals and corporations can delay their tax payments for 90 days from the April 15 deadline: Individuals can defer up to $1 million in payments and corporations can defer up to $10 million in payments. During that time, the IRS will not charge interest or penalties. Mnuchin’s announcement did not delay the April 15 filing deadline.  

 

 

New Jersey
There is no definitive word yet on tax relief or extensions in New Jersey. Often, New Jersey follows federal guidelines. On March 16, the New Jersey Assembly passed a package of bills to address the fallout from the coronavirus outbreak, including A-3841, which would extend the time to file gross income tax or corporation business tax return by one month. The bills still have to be passed by the Senate and signed by Governor Murphy.
  

 

Bergen County
The Bergen County Executive has issued an order requiring almost all businesses in the county to close starting Saturday morning. Only law firms are exempted.

Email News - 3/17/20

It is a terrible time that we are facing at the moment from the coronavirus 

situation affecting adversely to everyone. We received a few phone calls

about their business operations and possible stoppage of customers.

 

To share with you the latest developments over the potential financial 

difficulties, White House is seeking an $850 billion economic stimulus package, 

sending cash payments (at the moment $1,000 per person) to Americans 

over the next two weeks and delay tax payments for 90 days without interest 

and penalties.

 

The $850 billion package would come in addition to another $100 billion-plus 

package passed by the House that aims to provide paid sick leave, 

unemployment insurance and other benefits for impacted workers.  

 

This $850 billion package will include aid to small businesses with an easy

process of loan application at a low-interest rate. All these proposals are 

subject to congressional approvals, which we will know shortly.

 

Lastly, NYC is getting ready with its own financial assistance for businesses

impacted by COVID-19.  Please visit the following site for more information.

 

https://www1.nyc.gov/site/sbs/businesses/covid19-business-financial-assistance.page

Contact Us

(NJ) 201-313-0061 - fax 0068, (NY) 212-268-8001, (MA) 781-863-2232, (CA) 213-364-9741, (HI) 808-518-9595

NY - 276 5th Ave., Suite 704, New York, NY 10001 (New York)

NJ - 725 Grand Ave., Suite 205, Ridgefield, NJ 07657 (New Jersey)

MA - One Boston Place, Suite 2600, Boston, MA 02108 (Massachusetts)

CA - 811 Wilshire Blvd., Suite 1700, Los Angeles, CA 90017 (California)

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