COVID-19 and CARES ACT Resource Center
Enacted on March 27th, 2020, the CARES Act aims to boost the economy with $2 trillion in relief, ranging from individual rebates and small business loans to increased unemployment benefits and a variety of tax breaks. State legislators are following the Act with similar measures.
This page is designed to serve as a COVID-19 informational resource related to both the Federal and State level responses to the pandemic – and how these responses impact your business.
Webinars
The CARES ACT and How it Impacts Your Business Webinar Slides
The CARES Act and How it Impacts Your Business Webinar Recording
Overview:
MSPC's April 1st webinar, covering some of the most significant effects on businesses resulting from legislation enacted in response to the COVID-19 pandemic. As part of our commitment to offering you peace of mind, Cathy Davis, Michael Halkias and Len Sprishen address federal and state income tax filing and payment extensions, deferral of employer Social Security tax contributions, and the availability of loans to small businesses, among other issues.
The webinar covered the latest and most pertinent legislative changes affecting businesses as a result of COVID-19 including:
Status of State and Federal Tax Filings
Deferral of Employer's Social Security Tax Contributions
Qualified Improvement Property
Small Business Loan Highlights
Please join MSPC on April 1 at 1pm for a live webinar, which will cover some of the most significant effects on businesses resulting from legislation enacted in response to the COVID-19 pandemic. As part of our commitment to offering you peace of mind, Cathy Davis, Michael Halkias and Len Sprishen will address federal and state income tax filing and payment extensions, deferral of employer Social Security tax contributions, and the availability of loans to small businesses, among other issues.
The webinar will cover the latest and most pertinent legislative changes affecting businesses as a result of COVID-19 including:
Status of State and Federal Tax Filings
Deferral of Employer's Social Security Tax Contributions
Qualified Improvement Property
Small Business Loan Highlights
Register here
Tax Updates
On or around April 17th, the IRS will be providing a link on their website for individuals to provide their bank account information if they haven't previously received direct deposit. This will allow you to receive your stimulus money by direct deposit rather than by check.
The New Jersey state income tax filing deadline and the corporation business tax filing deadline has been extended from April 15th to July 15th.
As always, speak to your MSPC partner about how the changes relate to your specific situation.
As a follow-up to our previous post, the IRS income tax filing and the deadline for making payments has been extended to July 15th. Taxpayers can delay paying their income taxes on as much as $1 million in taxes owed for up to 90 days. Corporations that owe up to $10 million will also be able to delay their payments until July 15th.
As everyone is aware, COVID-19 is impacting businesses around the globe. This week, US Treasury Secretary Steven Mnuchin announced that taxpayers can delay paying their income taxes on as much as $1 million in taxes owed for up to 90 days. Corporations that owe up to $10 million will also be able to delay their payments until July 15th.
News Updates
On Thursday, March 11th, President Biden signed the American Rescue Plan Act into law. Here is a brief summary of the key tax provisions.
On Friday, January 8th, the Small Business Association ("SBA") released new guidance on what it is calling “Second Draw PPP Loans,” a forty-two-page document that serves to define many heretofore ambiguous terms used in the program’s description. The rule takes effect immediately, lenders will determine how soon prospective borrowers can apply, and such borrowers must submit everything required by their lenders by March 31, 2021.
In the recently issued Revenue Ruling 2020-27, the IRS addresses the question of whether a taxpayer that received a PPP loan and that paid or incurred certain otherwise deductible expenses can deduct those expenses in the tax year in which the expenses were paid or incurred if, at the end of that tax year, the taxpayer reasonably expects to receive forgiveness of the covered loan based on the otherwise deductible expenses.
In an important recent response issued to its regularly updated FAQs, the SBA addressed the situation of where a PPP borrower’s forgiveness amount would be reduced if the borrower lays off an employee and then offers to re-hire the employee, who in turn declines the offer.
In an important update released yesterday evening, the IRS has stated that PPP loans that are later forgiven do not trigger deductions. Thus, businesses that use PPP loans to pay otherwise deductible expenses, such as wages, will not be allowed those deductions to the extent that the PPP loan is forgiven.
The employee retention credit enacted by the CARES Act is a fully refundable tax credit equal to 50% of up to $10,000 in wages an employer pays to each employee (i.e., $5,000 per employee). Employers can immediately access this benefit by reducing the payroll taxes that they deposit on a monthly or semi-weekly basis by the credit amount.
The coronavirus pandemic (COVID-19) has fast become the defining global health crisis of our time and the greatest challenge to almost all entities, either directly or indirectly. There are significant disruptions to global supply chains, suspension, or in worst cases cessation of many business operations, significant volatility and downturn in financial, commodity and energy markets, unemployment or furloughs, and as a result, all industries are facing unavoidable challenges associated with the economic conditions resulting from control measures and restrictions taken by respective governments to limit the spread of the virus.
Click here to read the full report on the implications on financial reporting after 31 December 2019.
The Paycheck Protection Program (PPP) re-opened for applications yesterday, and although plenty of questions continue to need answers, the focus remains on the potential forgiveness of PPP loans. The amount of forgiveness depends on the borrower’s payroll costs over an eight-week period, but when does that eight-week period begin?
The CARES Act implements new types of “coronavirus-related distributions" from retirement plans, including 401(k), 403(b), 457(b), and employee stock ownership plans, as well as individual retirement accounts (IRAs). These distributions are not subject to the 10% early withdrawal penalty that would otherwise apply to early distributions from these types of plans, nor are they subject to withholding requirements that are generally imposed on distributions.
Businesses that have secured a loan through the PPP should already begin preparing and arranging for the information that they will eventually need to apply for forgiveness of that loan following the end of the eight-week, post-loan closing period. A formal application is yet to be released by the Small Business Administration (SBA).
In response to the COVID-19 pandemic, the New Jersey Economic Development Authority (NJEDA) is offering both a grant and a loan program for small businesses.
On Thursday, April 2nd, the SBA released thirty-one pages of an interim final rule concerning the PPP. Many of the provisions address lender-related details, and several additional regulations are still forthcoming. The following is a summary of the document.
The SBA recently released some early guidance regarding the paycheck protection program (PPP), which is open through June 30, 2020.