Along with other changes, the recent $2.3 trillion Consolidated Appropriations Act (Act) made significant changes to the Employee Retention Credit (ERC) created earlier in 2020 by the CARES Act. These changes could generate significant opportunities for eligible taxpayers, both retroactively and prospectively.
President-elect Joe Biden has publicized various aspects of his tax plan once he takes office in 2021. This article summarizes those proposals as they stood heading into the election and their impact with respect to estate and gift taxes.
As a general rule, gross income includes all compensation and employment benefits unless exclusion is provided by law. Cafeteria plan and certain other fringe benefits are among the items that could be excluded from employees' taxable income. Below are some common fringe benefits excludible from an employee's taxable income if certain conditions are met.
On August 8, 2020, President Trump issued a memorandum authorizing the deferral of payroll taxes for certain employees from September 1, 2020 through December 31, 2020. On August 28th, the IRS released Notice 2020-65 providing guidance to employers about how to implement the deferral. While helpful, the guidance still leaves many open questions about the practical implementation of the deferral and the risks to employers participating in this program.
On August 8, 2020, President Trump issued a memorandum to the Secretary of the Treasury authorizing the deferral of payroll taxes for certain employees from September 1, 2020 through December 31, 2020. Unfortunately, the memorandum leaves many more questions than answers for employers, making participation in the program an uncertain endeavor. The below discussion highlights what we know so far and what we need to learn before September 1st.
Article Update: As of June 5, 2020, the president signed the Paycheck Protection Program Flexibility Act into law.
On June 4, 2020, the U.S. Senate passed the House version of a bill designed at providing more flexibility for borrowers that are utilizing the Paycheck Protection Program loans to keep their businesses afloat during the COVID-19 pandemic. With unanimous bipartisan support, the bill now passes to the president, who is expected to sign.
On Friday, May 22, 2020, the Small Business Administration issued a pair of documents containing much-needed guidance for borrowers and lenders participating in the SBA’s Paycheck Protection Program (PPP).
This article was co-authored by Collin Kanelakos, Partner, Assurance Services.
So, you’ve submitted your SBA Paycheck Protection Program (PPP) application and you might have even received your loan proceeds, but important work still remains. It is critical for you to closely manage and account for your PPP loan proceeds, not just for cash flow purposes but for accounting purposes in order to apply for your PPP loan forgiveness. The amount of documentation you will ultimately need for the forgiveness component of this loan will be substantial, so get your process in place now to shorten the lag of this ultimate forgiveness.
To help individuals stay afloat during this time of economic uncertainty, the government will send up to $1,200 payments to eligible taxpayers and $2,400 for married couples filing joints returns. An additional $500 additional payment will be sent to taxpayers for each qualifying child dependent under age 17 (using the qualification rules under the Child Tax Credit).
Employee retention credit for employers
Eligible employers can qualify for a refundable credit against, generally, the employer’s 6.2% portion of the Social Security (OASDI) payroll tax (or against the Railroad Retirement tax) for 50% of certain wages (below) paid to employees during the COVID-19 crisis.