Current information about business, tax and financial challenges during the current Covid-19 health crisis. Covers both business and personal income tax planning and compliance and business capital challenges.
California finally decides how it will tax Paycheck Protection Program (PPP) loans
It was a long slow and tumultuous process, but California Assembly Bill 80 is now officially law, providing partial conformity to federal law allowing taxpayers to deduct expenses paid with PPP forgiven loan amounts as well as EIDL targeted and advance grants. The California Assembly also, and thankfully, did away with the $150,000 limitation that has been debated for several months now. Continued….
The ever-changing landscape for how California will or won’t tax a business’s Paycheck Protection Program (PPP) funds continues to resemble a game of ping pong.
First, California lawmakers were clear they would tax the proceeds (by not allowing deductions paid with the funds). Then, as the political blow back about taking that position arose quickly, lawmakers proposed several pieces of legislation to partially change course.
Just before midnight last night Congress overwhelmingly passed legislation – the Consolidated Appropriations Act, 2021 – to both fund the continued regular running of the federal government and to provide additional economic help to both individuals and businesses affected by the current pandemic (https://docs.house.gov/billsthisweek/20201221/BILLS-116HR133SA-RCP-116-68.pdf). While the legislation has not been signed into law at the time of this writing, it is expected that the President will sign the Act.
The Act provides for a new round of Paycheck Protection Program (PPP) funding, makes Sec. 501(c)(6) not-for-profit organizations (Chambers of Commerce, trade associations, etc.) eligible for loans for the first time, offers businesses facing severe revenue reductions the opportunity to apply for a second loan and gives expanded PPP assistance to many hospitality businesses including hotels and restaurants.
At long last Congress appears to be nearing legislation that has a chance of passing and becoming law. The Emergency Coronavirus Relief Act of 2020 has a lot of parts to it — many of them moving parts. Of particular interest to most taxpayers and business owners is that of economic stimulus payments and another possible round for forgivable loans for businesses (Paycheck Protection Program round 2 or PPP2).
With the current political turmoil that exists, providing any odds for passage is impossible. However, in the meantime while we await passage we have prepared a recap of the Act for your reading pleasure or use as a sleeping aide. You can read our summary of the Emergency Coronavirus Relief Act of 2020 by clicking here.
As we wrap up 2020, year-end tax planning has never been more crucial. This year brought challenges and disruptions that significantly impacted your personal and financial situations – COVID-19, economic relief measures, new tax laws and political shifts. Now is the time to take a closer look at your current tax strategies to make sure they are still meeting your needs and take any last-minute steps that could save you money.
Although forgiveness for Paycheck Protection Program (PPP) loans is a foremost topic on the minds of all of you who received the loans, you should not stress over rushing to apply for forgiveness.
Since the start of the PPP program there have been 160 Interim Final Rules and Frequently Asked Questions guidance issued on top of the Cares Act law itself. The most recent issued a few weeks ago. The lenders who will be approving your forgiveness application are still implementing their systems to work the process.
Following the rules, regulations and processes for the Paycheck Protection Program (PPP), Congress’ lifeline of working capital for small businesses, has been akin to trying to follow a superball bouncing in a small room. At least this most recent change is a positive one.
The three California cannabis licensing authorities announced today that businesses with state commercial cannabis licenses expiring between July 1, 2020 and August 31, 2020 may request 60-day deferrals of their license fee payments. This allows for fee deferral financial assistance to be provided to additional licensees.
Many businesses have recently received Economic Injury Disaster Loan (EIDL) documents from the SBA. These loans can be a real lifeline for a business impacted by the current pandemic disaster. But, don’t just rush to sign the loan documents and receive the funds until you fully understand what you are signing up for.
Great news arrived last evening for all businesses who have received or plan to apply for a Paycheck Protection Program (PPP) loan. This is a much-needed update to the program and will mean more of you will be able to get more of your PPP loan forgiven. The President is expected to sign the bill into law.
Today the House passed by an overwhelming margin a bill to cut small businesses more latitude in how they use coronavirus lifeline loans. Known as Paycheck Protection Program loans (PPP). These are the loans that, when used within the rules of the CARES Act may be completely forgiven, essentially turning into a grant.
Based on the number of phone calls and emails we are receiving it is clear there is still much confusion about the Paycheck Protection Program loans. This emergency loan program was created by the CARES Act.
There are many details to the calculation and, especially calculating the forgiveness portion of the loan, so be sure that you actually read the entire law and regulations for the program or seek professional assistance. If you have questions or need help the team at Scholl & Company is here for you. You can call us at (831) 758-5966 or email us at success@schollcpa.com.
Today, the day before banks (at least precious few banks based on what we are seeing and hearing) began taking applications for Paycheck Protection Program loans. Last evening the Small Business Administration released an “interim final rule” (doesn’t sound too final with that description). The rule updated the application process with changes from previous discussions and differences from the text of the CARES Act as follows.
The Internal Revenue Service late this afternoon issued guidance (IR-2020-61) about the CARES Act economic impact payments that will be made. These are the payments to eligible individuals based on income levels. The IRS has announced that they will begin sending out the payments in the next three weeks. Here are the details.
The President just signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). We are digesting the 880 pages of law and will be providing updates on a regular basis. In the meantime, we’d like to get some of the highlights to you.
A key business provision of the CARES Act provides for Payroll Protection loans of up to $10 million to COVID-19 impacted businesses with fewer than 500 employees.
The loans provide for the following.
Late Wednesday, the US Senate voted unanimously to advance “Phase Three” as part of the economic relief effort for COVID-19 emergency. The legislation, entitled the “Coronavirus Aid, Relief, and Economic Security Act” (the CARES Act), follows intense negotiations over the last week. Its estimated $2+ trillion price includes: immediate cash relief for individual citizens; a broad lending program for small business; extraordinary public health spending to confront coronavirus; and, targeted relief for specific industries hit hard by the pandemic.
The CARES Act is 880 pages long, consisting of several different Divisions and Titles. We’re still digesting the complex legislation and remind you that it has not yet been signed into law. It still must get through the House of Representatives. Although not yet law, we believe it is important to for our clients to be at the front end of the opportunities and changes that may become law any day.
The team at Scholl & Company is working to help all our clients and friends through this tumultuous time. In this post are links to many resources with important information related to tax and business matters that are affected by the COVID-19 pandemic. Everything is quite fluid and frequently changing and you’re encouraged to call us at (831) 758-5966 to get the latest updates or information available.
To help keep you safe and healthy, you can securely and easily send us any documents which we may need from you for your tax returns, payroll processing or any other work. We have several options available for your use to get us your documents including secure uploads, text, picture texts, scheduled courier pick-ups, etc. Read here for the details.
Our apologies for the frequent notifications but things are changing at a rapid clip but the California Franchise Tax Board (FTB) has just announced that it is postponing until July 15 the filing and payment deadlines for all individuals, trusts, and business entities. This is a change from their announcement of last week and a welcome improvement. The additional postponement applies to the following:
