New Developments – May 2021
The FTB has stated that they will not be creating any new forms or certifications for taxpayers to demonstrate that they meet the 25% drop in gross receipts test for purposes of deducting expenses paid with forgiven PPP debt. They will be updating form instructions, though we do not know when to expect those updates.
The SBA has stopped accepting new PPP applications from most lenders as general funds run out. The only remaining funds available for new applications are $8 billion set aside for community financial institutions (CFIs), which typically work with businesses in underserved communities. The agency also has set aside $6 billion for PPP applications still in review status or needing more information due to error codes.
New Developments – April 2021
Gov. Newsom signed AB 80 on April 29, 2021. AB 80 generally conforms to the federal treatment of PPP loan forgiveness and EIDL grants, with one major exception:
- To deduct expenses paid with PPP loan forgiven amounts, the taxpayer must have a 25% reduction in gross receipts in any 2020 calendar quarter as compared to the comparable 2019 calendar quarter. If the taxpayer does not meet this threshold reduction, the expenses cannot be deducted on the California return.
- 2021-32: California’s partial PPP conformity bill sent to Governor
Expenses paid with 2020 PPP loans can be deducted on 2021 tax returns–The IRS announced a limited safe harbor for certain businesses that received first-round Paycheck Protection Program (PPP) loans but did not deduct any of the eligible expenses because they relied on (previously) current IRS guidance. This safe harbor is available only for taxpayers that filed their 2020 federal tax returns prior to Dec 27, 2020.
By Nick Sabbatini, CPA, Audit Manager
By now, we are all aware of the Coronavirus pandemic and the impact it is having on our lives, including the impact on businesses and the overall economy. Companies are working remotely, where possible. Disruptions to vendor and customer bases, market value declines and day-to-day changes in the global economy are also creating broad impacts to companies’ operations.
At this point, the general impacts on operations for most companies are known through media coverage and changes in our daily lives, but most of us may not be fully aware of the impact on financial reporting. We have summarized a few financial statement considerations: (more…)
By Laura Mays, Director of HR & Employee Development
Due to the recent COVID-19 pandemic, working from home has very quickly become the new normal for a lot of us. For some, it’s convenient to skip the commute and jump right into a day’s work, for others, it may be a little uncomfortable and challenging to juggle a work-life balance. Here are a few tips to help keep you productive while working from a home office: (more…)
New Developments – 6/14/21
The IRS posted two sets of FAQs, explaining changes to various credits made by the American Rescue Plan Act:
As California Fully Reopens, Governor Newsom Announces Plans to Lift Pandemic Executive Orders
New Developments – 7/27/21
The SBA has awarded more than $7.5 billion in Shuttered Venue Operator Grants (SVOGs) to about 10,000 live entertainment venues, small businesses, and not-for-profits, the agency announced. With requests for only $12 billion of the $16.25 billion in SVOG funding submitted, the SBA is providing opportunities for applicants to appeal grant denials, request award reconsiderations, and seek supplemental funding. The period to appeal rejected applications will run from Aug. 2–16, while entities that received less funding than they anticipated can apply for reconsideration of their grant amount Aug. 4–18.
New Developments – 7/19/21
PPP Update–In a notice sent July 9 to lenders, the SBA said it would no longer request either version of the Loan Necessity Questionnaire: SBA Form 3509 for for-profit borrowers and SBA Form 3510 for not-for-profit borrowers.
Restaurant Revitalization Fund recipients revealed: