ACTION MAY BE NEEDED BEFORE JANUARY 31, 2024
Last week, the House Ways and Means Committee approved a bill that could imminently close the window for Employee Retention Tax Credit (ERTC) claims. If passed, the deadline to file amended payroll returns to claim the Employee Retention Tax Credit moves to January 31, 2024. There are other changes to the program including extending the period for IRS audits of ERTC claims to six years and significant penalties for promoters. The termination of ERC was included as a vehicle to pay for $78 billion in tax relief for individuals and businesses in the Tax Relief for American Families and Workers Act of 2024.
Although most COVID-19 relief programs have expired, many taxpayers are still sorting through lingering questions about their eligibility for various credits and grants. One such program, the Employee Retention Tax Credit (ERTC), has attracted particular attention in recent months.
The rules governing the ERTC are complex, and some eligible employers might not realize they qualify. Your company certainly should take advantage of tax credits for which it is eligible, and the ERTC was indeed a lifesaver for many businesses. (more…)
By Deepa Bhat, CPA, CFE, ACA, Assurance & Advisory Principal
Sometimes, even the most thought-out plans don’t work out. Organizations experienced this first-hand over the last two years with COVID-19. Almost overnight, everything changed: operating models, financial forecasts, and the labor market, to name a few of the biggest impacts. Even now, many Bay Area and California companies are grappling with the effects of an uncertain economy. External events, like the pandemic, have the potential to upset the typical financial reporting process. Questions remain about how to reflect external pressures on internal reporting; what needs to be adjusted and when, and how management can best respond to changing conditions while still meeting current compliance requirements. In other words, the pandemic and other events have made it difficult for management to make essential estimates required for financial reporting. Here are some key factors to consider during this time of uncertainty. (more…)
Recently enacted California tax legislation included both good news and bad news for business owners. Senate Bill 113 (SB 113) contained a number of key and favorable changes made retro-active for the 2021 tax year. California Senate Bill 114 (SB 114) reinstated a mandatory COVID-19 supplemental sick leave requirement for employers. (more…)
Earlier this month, the IRS released Notice 2021-49 and Revenue Procedure 2021-33, to provide additional guidance for employers claiming the Employee Retention Credit (ERC) in 2020 or 2021. This guidance provided answers to several unresolved issues including: (more…)
The SBA announced that PPP borrowers of $150,000 or less (for either first draw or second draw loans) have access to a simplified loan forgiveness process:
- SBA Loan Forgiveness Portal – Borrowers are able to submit their loan forgiveness application directly to the SBA through a streamlined portal as of August 4, 2021, rather than to their lender/bank.
- The lender/bank must opt-in to participate in this program. Therefore, check with your lender to see if you can utilize the SBA Portal. Currently, nearly 900 banks representing over 2 million borrowers have agreed to participate, however, it is expected that most large financial institutions will not participate and continue to use their proprietary portals. The SBA has provided a list of participating lenders.
- The Portal will allow borrowers to complete Form 3508S which was recently revised.
- The SBA set up a PPP customer service team to answer questions and directly assist borrowers with their forgiveness applications. The customer service team is available by calling (877) 552-2692, Monday – Friday, 5:00 AM – 5:00 PM PDT.
PPP Loan Payments May Be Due for Some Borrowers – PPP loan borrowers have ten months after their “Covered Period” ends (anywhere between 8 and 24 weeks after receiving loan proceeds) before loan payments are required. Borrowers can apply for forgiveness at any time before the loan matures but will need to start making payments if they apply after this ten-month period. For those who received a PPP loan at the beginning of the COVID pandemic, it may be close to the end of their ten-month window, and payments may be required soon. (more…)
In addition to causing untold health and economic damages, the COVID-19 pandemic has had a profound—and possibly permanent—impact on many longstanding workplace practices. For example, although working from home began as a temporary emergency response, a number of high-profile companies now say they plan to continue the practice in their post-pandemic operations.
Choosing to maintain remote worker arrangements as a permanent fixture raises a number of questions. In addition to evaluating how a dispersed workforce will affect corporate culture, efficiency, morale, and productivity, companies must also consider the possible tax consequences of having employees work from home. (more…)
After a series of rule changes and expansions to various COVID-19 relief programs, many companies are reconsidering certain federal benefits they had previously ruled out. The employee retention credit (ERC) is a prime example.
The initial intent of the ERC was to make it easier for a business to keep employees on the payroll if it was forced to close or partially suspend operations due to a mandatory government shutdown order or if it experienced significant revenue loss during the pandemic. While the basic structure and purpose of the program remain unchanged, both the eligibility criteria and the size of the potential benefits have changed significantly. (more…)