COVID-19 and Tax Updates

New Developments – 9/24/21

Cost of home testing for COVID-19 is eligible medical expense; reimbursable under FSAs, HSAs:

Renewed tax credit can help employers hire workers – the IRS reminds employers to check out a valuable tax credit available to them for hiring long-term unemployment recipients and other groups of workers facing significant barriers to employment.

California’s statewide eviction moratorium ends on Sept. 30, 2021:

Paid Family Leave Small Business Grant – For small businesses with 10 or fewer employees, the Paid Family Leave Small Business (PFLSB) program will provide grants of $500 per employee who is utilizing the Paid Family Leave program, up to a total of $4,500 per business, to help offset the costs involved with training other employees to cover the duties of individuals on leave.

The Salesforce San Francisco Small Business Grant Program will make grants of $10,000 to San Francisco-based small businesses.

The San Francisco Arts Reopening Fund will make facility-related post-COVID reopening grants for arts and culture nonprofits in San Francisco. Eligible organizations with physical spaces can apply to receive grants of up to $35,000, and eligible organizations with virtual spaces can apply to receive grants of up to $10,000.

The Comcast RISE (Representation, Investment, Strength, and Empowerment) program is making grants of $10,000 to eligible small businesses in select cities, including Oakland, California.

  • The application window will open on Friday, October 1, and close on Thursday, October 14: Comcast RISE

New Developments – 9/10/21

IRS issued temporary regulations for the assessment of excess or erroneous ERC credits claimed by employers:

IRS has released guidance (Notice 2021-53) for employer reporting of qualified Sick and Family Leave wages paid in 2021.

SBA quadruples COVID-19 EIDL limit to $2 million (originally $500,000); additional key changes (all effective immediately):

  • Implementation of a deferred payment period
  • Loans can now be used to refinance existing commercial debt (loans and credit card balances)
  • Establishment of a 30-day exclusivity window
  • Simplification of affiliation requirements
  • SBA quadruples COVID-19 EIDL limit to $2 million

The SBA is hosting a free virtual summit for National Small Business Week, September 13 – 15, 2021. The summit will discuss new business strategies, meet other business owners and chat with industry experts. This year’s virtual summit will also feature an impressive list of guest speakers including, but not limited to, Mark Cuban, José Andrés, and Cedric Richmond.

Complimentary Legal Advice for Businesses – Santa Clara University is offering free help with hiring, firing, privacy, commercial leases, financing, contracts and much more.

Available Small Business Grants (some new, some reminders):

  • Targeted EIDL Advance – cash grants of up to $10,000 for businesses in low-income areas, as well as $5,000 supplemental follow-up grants: Targeted EIDL Advance and Supplemental Targeted Advance
  • Walmart Local Community Grants – grants of $250 o $5,000 for eligible nonprofits, local government agencies, schools or faith-based organizations that aim to help the community: Walmart Local Community Grants
  • KKR Small Business Builders – private equity firm KKR is offering grants of up to $10,000 to select businesses in communities across the country. Businesses must have between 5 and 50 employees and have less than $7 million in annual revenue: KKR Small Business Builders
  • GoFundMe’s Small Business Relief Fund – businesses can get up to $500 in matching funds if they start a GoFundMe fundraiser: GoFundMe’s Small Business Relief Fund
  • Shuttered Venue Operators Grant program
  • America’s Seed Fund – powered by the National Science Foundation, the grant program is open to early-stage companies that need to prove their technology and find their market potential: America’s Seed Fund
  • The Barstool Fund – raised more than $14 million so far, and has given 443 businesses support during the pandemic: The Barstool Fund
  • Awards through Challenge.gov – the 2021 National institutes of Health “$100,000 for Start a SUD Startup” Challenge is looking for research ideas that can become promising biotech startups: “$100,000 for Start a SUD Startup” Challenge
  • TikTok – TikTok and the Hispanic Heritage Foundation have teamed up to offer $150,000 in grant funding aimed at expanding 30 small Latino-owned businesses across the US: CRECIENDO CON TIKTOK

New Developments – 9/3/21

Shuttered Venue Operators Grant program enters supplemental phase – The SBA said in a news release on Aug. 27, that it would begin sending invitations for supplemental SVOG awards.

The National Asian/Pacific Islander American Chamber of Commerce and Entrepreneurship and UPS are partnering to provide nationwide grants of $5,000 to Asian American/Pacific Islander (AAPI) majority-owned small businesses (51% or more AAPI-owned).


New Developments – 8/27/21

PPP Update–In Less Than Two Weeks, PPP Direct Borrower Forgiveness Portal Surpasses Expectations, Accepts More Than 340K Submissions

Interruption of last-in-first-out (LIFO) inventories due to COVID-19 and Sec. 473 relief:

  • A company with last-in-first-out (LIFO) inventory that experiences a decrease in LIFO inventory would typically have additional taxable income related to the LIFO decrement.
  • Sec. 473 provides relief for eligible taxpayers that experience qualified liquidations of LIFO inventories. Sec. 473 applies if a business has had an interruption in the ability to obtain replacement inventory due to a trade embargo or other international event. Under Sec. 473, the company would have three additional years to replenish the liquidated inventory.
  • Interruption of LIFO inventories due to COVID-19 and Sec. 473 relief

eBay has launched a new round of the Up & Running Grant Program. Eligible small business sellers can apply to receive a grant package of $10,000, including cash, coaching through eBay Seller School, and more.

A new round of grants through the San Mateo Strong Small Business Grant Program was recently approved to help small businesses that have not received any assistance from the County, State, or Federal COVID-19-relief programs in the past 12 months.

  • The Small Business Grant Program will provide grants of up to $10,000 to each qualifying establishment to offset losses in revenue and past debt due to the COVID-19 pandemic state shutdown orders beginning in March 2020, ensure continued operation, and assist in covering current business operating expenses.
  • Applications are due by Tuesday, September 7 at 5:00 PM: County of San Mateo Small Business Grant Program: Round 6

 The County of Santa Clara and the Silicon Valley Small Business Development Center have launched the Small Business Grant Program for COVID-19 Protective Measures to make grants of up to $5,000 for small businesses to protect employees, customers, and the public from COVID-19.


New Developments – 8/12/21

IRS Creates Safe Harbor for Employee Retention Credit Applicants—

 IRS announced it is providing transition relief to certain employers claiming the Work Opportunity Tax Credit (WOTC).

Common questions about the advance Child Tax Credit payments (posted August 11, 2021) – The advance Child Tax Credit allows qualifying families to receive early payments of the tax credit many people may claim on their 2021 tax return during the 2022 tax filing season. The IRS will disburse these advance payments monthly through December 2021:

SBA Announces Plan to Open Supplemental Grants for Shuttered Venue Operators Grant Applicants – Later in August, the SBA will open the program for supplemental SVOGs for 50% of the original award amount, capped at a total of $10 million (initial and supplemental combined). Details will be announced at a later date.

AICPA Releases Technical Question and Answer on Recipient Accounting for Certain Government Grants (Shuttered Venue Operators Grant (SVOG) or a Restaurant Revitalization Fund (RRF) Grant):


New Developments – 8/6/21

IRS provided additional guidance to employers claiming the employee retention credit, including clarifying provisions for the third and fourth quarters of 2021:

  • Notice 2021-49 addresses:
    • Requires the deduction for wage expense to be reduced in the tax year that generated the ERC so employers amending payroll returns for 2020 will possibly need to amend income tax returns as well
    • Provides an (unexpected) answer to the ERC treatment of 50% or greater owners and spouses. An owner/spouse will qualify if they have no living siblings, ancestors, or lineal descendants (IRC 267 attribution rules as applied to ERC).
    • Employers using the “prior quarter method” to determine gross receipts can elect this method on a quarterly basis
    • The definition of eligible employer to include “recovery startup businesses”
    • Modifying the definition of qualified wages for “severely financially distressed employers”
    • Credit does not apply to qualified wages taken into account as payroll costs in connection with a shuttered venue grant or a restaurant revitalization grant
  • Treasury, IRS provide additional guidance to employers claiming the employee retention credit, including for the third and fourth quarters of 2021

The SBA published new guidance designed to simplify and speed up the forgiveness process for businesses and not-for-profits with PPP loans of $150,000 or less:

  • SBA Loan Forgiveness Portal – Borrowers are able to submit their loan forgiveness application directly to the SBA through a streamlined portal: https://directforgiveness.sba.gov, rather than to their lender/bank. The lender/bank must opt in to participate in this program. The SBA has provided a list of participating lenders: https://www.sba.gov/document/support-ppp-lenders-participating-direct-forgiveness. The Portal will allow borrowers to complete Form 3508S which was recently revised.
  • COVID-19 Revenue Reduction Score – Second draw borrowers are required to provide with their loan or forgiveness applications documentation to evidence a 25% decline in gross receipts. Instead of providing tax forms, quarterly financial statements or bank statements, second-draw borrowers can now use a COVID-19 Revenue Reduction Score as a method of proving their 25% decline in gross receipts.
    • An independent third-party SBA contractor developed the COVID Revenue Reduction Score based on a variety of inputs including industry, geography, and business size. The score uses current data on economic recovery and return of businesses to operational status. If the score validates at least a 25% gross receipts reduction, no additional documentation will be required.
    • California PPP borrowers: It appears the California Franchise Tax Board will follow this new guidance to allow use of the Revenue Reduction Score to document a decrease in gross receipts. California requires borrowers to have a 25% or greater decrease in gross receipts to be eligible to deduct expenses paid with a forgiven PPP loan.
  • SBA streamlines forgiveness process for most PPP loans

IRS Expands Tax Credit for Getting Vaccine – Paid leave credit available for providing leave to employees caring for individuals obtaining or recovering from a COVID-19 immunization.

CDC Issues Eviction Moratorium Order in Areas of Substantial and High Transmission. This order will expire on October 3, 2021. California eviction moratorium ends Sept 30th.

FHFA Extends COVID-19 REO Eviction Moratorium Through September 30, 2021. The current moratorium was set to expire on July 31, 2021.

FHFA Encourages Landlords of Enterprise-Backed Properties to Apply for Emergency Rental Assistance Before Evicting Tenants

New funding has been allocated to the California Small Business COVID-19 Relief Grant Program. The current round (Round 7) is only available to eligible applicants who were waitlisted from previous rounds. Round 8 will be open to nonprofit cultural institutions only. In Round 9 (opening September 9 and closing September 30), new applications from small business owners will be accepted.

Employment Development Department Issues Unemployment Insurance Update, Reminds Californians That Federal Extended Benefit Programs End September 4, 2021:

City of San Jose Update: Emergency rental assistance is available now to help qualified tenants avoid evictions. Qualified landlords can also receive assistance from the State of California if they have lost rental income during the pandemic.

Grants for Oakland Entrepreneurs: The Alameda County-Oakland Community Action Partnership and Renaissance Entrepreneurship Center are offering relief grants of $1,500 each to 60 qualifying Oakland business owners. Grants will be awarded on a first-come, first-served basis.


New Developments – 7/27/21

New Developments – 7/19/21

New Developments – 7/8/21

New Developments – 7/1/21


For the past few months, the world around us and our economy have been rapidly changing due to the COVID-19 pandemic. In reaction, the federal and state governments have instituted new programs and tax changes impacting both individuals and business entities. The changes being made by both federal and state governments are rapidly evolving in response to ever-changing conditions. Below are links to some of the latest information.

As always, the Partners and staff of ASL are here to support our clients and answer any questions or concerns. In this new virtual environment, our employees are working remotely to continue to serve our clients as usual.


Accounting & Advisory Updates

American Families Plan

American Rescue Plan Act of 2021

Bay Area Economic Relief

Business Loan Modifications

Business Valuations

California Economic Relief

CARES Act

COVID-19 Relief Bill

Crowdfunding

Economic Stimulus Payments

Employee Retention Credit

Employer Aid to Employees

Executive Actions – August 2020

Federal Tax Filing Date & Payments

Health Care Entities

Home Owners

IRS Updates

Mandatory Paid Sick Leave and Family Leave

National Grants and Loans

Net Operating Loss

Nonprofits – Provisions and Relief

Paycheck Protection Program

Qualified Opportunity Funds

Rental Property Owners

Remote Working

Retirement Plans

SBA Loans

Start Small Think Big COVID-19 Assistance

State Tax Filing Guidance – Updated 1/29/21

Student Loans


Federal

American Rescue Plan Act of 2021

Looking ahead: How the American Rescue Plan affects 2021 taxes:

American Rescue Plan tax credits available to small employers to provide paid leave to employees receiving COVID-19 vaccines; new fact sheet outlines details:

The IRS issued adjusted amounts for the child tax credit, the earned income tax credit (EITC), and the premium tax credit (PTC) for 2021 to reflect changes enacted in the American Rescue Plan Act of 2021:

The IRS announced that it will take steps to automatically refund money this spring and summer to people who filed their tax return reporting unemployment compensation before the recent changes made by the American Rescue Plan.

Free COBRA Insurance Premiums begin April 1st. The American Rescue Plan Act authorized 6 months of no cost COBRA health insurance coverage for “assistance eligible individuals”. Starting April 1st, the individual’s employer or former employer is responsible for the payment of premiums. The employer will be reimbursed by a refundable federal payroll tax credit. Further guidance is expected “soon” from IRS and Department of Labor even as the program officially begins later this week.

The American Rescue Plan Act granted a $10,200 per taxpayer exclusion for unemployment compensation for tax year 2020:

President Biden signed the $1.9 trillion American Rescue Plan Act of 2021 (ARPA) into law on March 11, 2021.

Child Tax Credit 

Monthly Child Tax Credit payments began July 15 – Under the American Rescue Plan, each payment is up to $300 per month for each child under age 6 and up to $250 per month for each child ages 6 through 17. Normally, anyone who receives a payment this month will also receive a payment each month for the rest of 2021 unless they unenroll.

American Families Plan

President Biden announced his “American Families Plan, an investment in our kids, our families, and our economic future”. The plan contains many revenue raising tax provisions to fund the plan:

CARES Act 

The CARES Act (Section 1112) authorized SBA to pay lenders 6 months of principal, interest, and fees on behalf of borrowers with loans under the 7(a) and 504 programs and Microloans.  On December 8, the SBA released an Informational Notice clarifying the tax treatments of these payments. Payments are taxable income to the borrower and should be reported by the lender on Form 1099-MISC, Box 3.  Borrowers can continue to deduct interest and fees.

Most states rely in some form on the Code for administrative ease, but they do not automatically conform to all its provisions and, therefore, may or may not conform to each Code-related provision of the CARES Act:

On March 27, 2020, the President signed into law, a $2.2 trillion stimulus package (CARES Act) to help both individuals and businesses offset the economic impacts of the virus.

IRS expands relief for coronavirus-related retirement plan withdrawals. Qualified individuals receive favorable tax treatment for those distributions under the CARES Act:

The IRS has advised that new rules under the CARES Act provide flexibility for health care spending that may be helpful in the current environment where more people may need at-home services due to measures to fight the coronavirus.

IRS releases draft Form 941 with numerous changes to report new CARES Act credits and deferrals:

COVID-19 Relief Bill

December 27, 2020 former President Trump signed into law the $900 billion COVID-19 relief bill passed Dec. 21 by Congress.

The $900 billion COVID-19 economic relief package includes:

  • The legislation clarifies that business owners can write-off expenses paid for with forgiven PPP loans, giving small companies a tax break that could amount to more than $100 billion.
  • $284 billion for a new round of Paycheck Protection Plan loans –new borrowers and entities that previously received a loan would be eligible for this program but repeat borrowers would be subject to stricter eligibility requirements.
  • $600 direct payments to individuals making less than $75,000 a year or couples making less than $150,000 and $600 per child.
  • Federal unemployment insurance benefits will be extended for 10 weeks through mid-March, with each week supplemented by a $300 payment
  • $15 billion to reinstate payroll reimbursements to airlines, which expired two months ago, as well as $1 billion for airline contractors.
  • An expansion of the business meals deduction.
  • A renewal of the employee retention tax credit for businesses that keep workers on their payrolls.
  • $25 billion for emergency rental assistance, and it extends the CARES Act’s eviction moratorium until Jan. 31.
  • Extends tax credits for renewable energy projects, including wind and solar production.

Qualified Improvement Property – Before the CARES Act, prior law required Qualified Improvement Property (QIP) placed in service subsequent to 12/31/2017, to use a 39-year tax life, and the property was not eligible for bonus depreciation. The CARES Act retroactively changed this recovery period to 15 years, which made QIP bonus depreciation eligible through 2026. Partnerships can file amended 2018 and 2019 returns to claim the bonus depreciation but must do so before Sept 30, 2020. All taxpayers can file a Form 3115 to correct QTIP depreciation for tax years 2018 and 2019 and make a catchup adjustment in the current tax year.

CA Conformity – FTB is studying conformity with the federal CARES Act. It has released preliminary information regarding pension related conformity and non-conformity with many other provisions:

Deferral of Payroll Tax Deposits – the employer portion of Social Security tax (not Medicare) can be deferred until Dec 2021 and Dec 2022 with 50% payable each year. Applies to payments due on or after March 27, 2020 and before Dec. 31, 2020.

The IRS has issued guidance (Notice 2021-11) to address how employers who elected to defer certain employees’ payroll taxes can withhold and pay the deferred taxes throughout 2021 instead of just the first four months of the year.

The IRS recently updated the FAQ’s discussing the deferral of the employer portion of Social Security tax clarifying a few items. This deferral is available to both employers and self-employed taxpayers.

  • Employers cannot get a refund by electing to defer taxes previously deposited (FAQ 9)
  • Employers can claim both the deferral and the Payroll Tax Research Credit so the credit can generate a refund for the tax deferred (FAQ 14)
  • Guidance to pay the deferred amounts prior to their 2021 and 2022 due dates (FAQ 29)
  • Self-employed taxpayers cannot generate a refund on their 2020 individual income tax returns by electing to defer the employer portion of social security tax. The election is a deferral of payment not a deferral of liability so once the payment has been made it cannot then be deferred. Estimated tax payments should be adjusted to account for the deferral so the taxpayer does not have an overpayment on their tax returns. (FAQ 30)
  • Deferral of employment tax deposits and payments through December 31, 2020 FAQs

Due to the recent passing of the PPP Flexibility Act, borrowers of a PPP loan may now continue to defer Social Security tax even after their loans are forgiven.

Self-employed taxpayers can also defer payment of 50% of their Social Security tax with this amount being payable equally Dec 31, 2021 and 2022.

Employee Retention Credit 

On April 2nd, the IRS issued guidance (Notice 2021-23) for employers claiming the credit in Quarter 1 and 2 of 2021. The notice highlighted the changes made to the ERC rules in 2021 vs 2020:

  • Guidance for the changes applicable in Qtr 3 and Qtr 4 will be issued at a later date.
  • Employers can claim a refundable tax credit equal to 70% of the qualified wages they pay to employees during Quarter 1 and 2 of 2021.
  • Qualified wages are limited to $10,000 per employee per calendar quarter in 2021. The maximum employee retention credit available is $7,000 per employee per calendar quarter.
  • Wages used for the 2021 ERC cannot be used to claim the R & D credit (and a few additional credits)
  • IRS provides guidance for employers claiming the Employee Retention Credit for first two quarters of 2021

In March 2021, the IRS issued Notice 2021-20 containing a series of FAQs to provide guidance for employers claiming the Employee Retention Credit for calendar quarters in 2020. In the guide below, are references to the FAQs addressing specific areas of the 2020 ERC. The Notice addresses only 2020 ERC rules as the IRS plans to release additional guidance for 2021 ERC soon.

Employee Retention Credit Now Offers Big Benefits to Employers – The Employee Retention Credit was enhanced and expanded when business relief legislation passed in December 2020 making it a more valuable option to generate cash flow. The amount of the credit was significantly increased, employers are now allowed to claim the credit until June 30, 2021, and the restriction that prevented employers with PPP loans from claiming this credit was repealed retroactively to March 2020. This repeal offers a significant opportunity for PPP loan borrowers to now benefit from this credit.  It is important that PPP loan recipients review their eligibility for the 2020 credit. With expanded eligibility requirements effective in 2021, it is expected that more employers can qualify for this benefit.

Updates January 26, 2021:

Update December 28, 2020: Borrowers can now qualify for the Employee Retention Credit retroactively to March 2020. Under the CARES Act, a borrower could not obtain a PPP loan and qualify for the Credit. The COVID-Related Tax Relief Act of 2020, signed by former President Trump on December 27, 2020, eliminates this prohibition. The same payroll costs cannot be used for both the Retention Credit and PPP loan forgiveness so borrowers should evaluate the eligible expenses being used to claim PPP loan forgiveness. If a borrower is eligible for the Retention Credit claiming less payroll costs for forgiveness and using those costs to claim the credit can increase cash flow while not impacting the loan amount forgiven.

The IRS issued new FAQs to address eligibility to claim the Employee Retention Credit when an entity acquires a target Company that has participated in the PPP Loan program. Under provisions of the CARES Act, a PPP borrower cannot claim the Employee Retention Credit but special rules will apply for M&A activity.

IRS updated, Determining When an Employer’s Trade or Business Operations are Considered to be Fully or Partially Suspended Due to a Governmental Order FAQs:

IRS updated types of governmental closure orders that qualify employers to claim the Employee Retention Credit (FAQ #28 and #29)

On May 7, 2020, the IRS updated the FAQ’s for the Employee Retention Credit:

  • Changed position on health insurance premiums for furloughed workers. Employers paying health insurance premiums for furloughed workers can treat the premiums as “qualified wages” (FAQ #64 and #65)
  • Employers returning PPP loan funds prior to May 14th under SBA “safe harbor” will be allowed to claim the retention credit (FAQ #79)
  • IRS – COVID-19-Related Employee Retention Credits: Determining Qualified Wages FAQs

The Employee Retention Credit allows a refundable credit against the employer’s portion of Social Security tax (6.20%) for employers that are forced to close or suspend operations due to the pandemic as long as employees are still paid during the shutdown.

Eligible employers, tested on a quarterly basis, are:

  • Any business that was fully or partially shut down due to a government order related to COVID-19

OR

  • An entity with less than 100 employees if the business remained open and gross receipts for any quarter in 2020 were less than 50% of gross receipts from the same quarter of 2019. When gross receipts increase to 80% of the comparable prior year quarter eligibility ends that quarter.

Maximum credit is 50% of employee wages and health insurance costs up to $10,000 of such costs per employee

Additional info:

  • CARES Act – Business Provisions: significant funding for loans that do not need to be repaid, SBA funding, tax credits, and opportunities to generate refunds from retro-active tax provision changes.
  • CARES Act – Individual and Employee Provisions: cash rebates, tax relief for retirement plan distributions, enhanced unemployment benefits and opportunities to generate refunds from retro-active tax provision changes.

Executive Actions – August 2020

IRS has issued guidance to employers for reporting employee social security tax deferred under former President Trump’s August Executive Order. Employers will need to prepare amended W2’s for tax year 2020 when the deferred tax is withheld in 2021. IRS has revised Form 940 to account for payment of the deferred withholding.

On August 28, 2020, the IRS issued very limited guidance for employers to comply with the August 8th Executive Memorandum deferring employee social security tax withholding and deposits. Tax is deferred for Sept 1 to Dec 31st and needs to be deposited from Jan 1 to April 30, 2021. Employee’s tax is deferred but employer remains liable for the deposits owed in 2021. Treasury Secretary Munchin has indicate this deferral can be elective for employers. Guidance does not indicate if it is elective for employers and/or employees. It is also unclear how the tax will be paid if employees are no longer employed in 2021 or the employer ceases business.

On August 27, 2020, former President Trump issued another Executive Order requesting Government agencies opening new offices to look at opening in Opportunity Zones:

On August 8, 2020, the President issued 1 executive order and 3 memorandums to provide financial relief as negotiations for another stimulus bill stalled. The legality of these orders may be challenged. The President’s actions will:

  1. Direct the Treasury Secretary to use his authority to defer employee portion of social security tax (6.20%) effective Sept 1 to Dec 31, 2020 for employees earning less than $104K annualized. Treasury Secretary is instructed to determine how to make this deferral permanent.
  2. Provide a $400 weekly supplemental unemployment benefit with states funding 25%.  Many questions remain unanswered—can unused FEMA funds be used to fund this program; how will states provide funding for this when they are looking to the federal government for funding to supplement their existing budget shortfalls; will the unemployed still get $300 if a state does not participate in the program.
  3. Defer student loan payments an additional 3 months to December 31, 2020
  4. Provide “assistance” to renters and homeowners by setting vague guidelines for HUD and Treasury Department to establish “assistance” programs and CDC and HHS to consider measures halting evictions.

Business Valuation

How the CARES Act has affected business valuation – the AICPA issued a set of FAQs on how to adjust business valuations based on the CARES Act:


Small Business Loans

The SBA announced the updated interest rates for the 504 Loan Program offered by Certified Development Companies (CDC). Small businesses can now apply for the lowest interest rates since July 2018 as the program is now allowing 20 and 25-year interest rates at 2.214% and 2.269%.

Paycheck Protection Program (PPP) – Designed to provide a direct incentive for small businesses to keep their workers on payroll by providing each small business a loan up to $10 million for payroll and certain other expenses. If all employees are kept on payroll for eight weeks, SBA will forgive the portion of the loans used for payroll, rent, mortgage interest, or utilities. Up to 100% of the loan is forgivable, but at least 60% of the amount must be used for payroll.

Economic Injury Disaster Loans (EIDL) – The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million at 3.75% (2.75% for nonprofits) to help businesses (and nonprofits) during this economic crisis. Funds can be used to cover current expenses. The loans offer a 1-year deferral on payments and have a maximum 30-year term.

Small businesses that received a COVID-19 Economic Injury Disaster Loan (EIDL) won’t have to start making payments on the loan until 2022, the SBA announced.

  • For all SBA disaster loans made in 2020, the first payment due date is 24 months, extended from 12 months, from the date of the note.
  • For all SBA disaster loans made in 2021, the first payment due date is 18 months, extended from 12 months, from the date of the note.
  • SBA defers EIDL payments until 2022

Supplemental Targeted Advances – The SBA launched a new round of Economic Injury Disaster Loan (EIDL) assistance – called Supplemental Targeted Advances – on April 22, 2021 that will provide $5 billion in additional assistance to 1 million small businesses and nonprofit organizations that have been most severely affected by the economic effects of the COVID-19 pandemic. The Supplemental Targeted Advance program is the latest SBA relief program to launch as part of the American Rescue Plan Act.

SBA to Increase Lending Limit for COVID-19 Economic Injury Disaster Loans – Starting the week of April 6, 2021, the SBA is raising the loan limit for the COVID-19 EIDL program from 6-months of economic injury with a maximum loan amount of $150,000 to up to 24-months of economic injury with a maximum loan amount of $500,000.

The FTB has clarified that EIDL (Economic Injury Disaster Loan) advance grants are taxable to California:

On June 15, 2020, the SBA reopened the Economic Injury Disaster Loan (EIDL) Program for new applications:

Economic Injury Disaster Loan Advance – The SBA closed the EIDL Advance program after granting $20 billion in emergency funding as of July 11, 2020. The EIDL Advance provided $1,000 per employee up to a maximum of $10,000. EIDL loan applications will still be processed even though the Advance is no longer available.

SBA Express Bridge Loans – Enables small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan. If a small business has an urgent need for cash while waiting for decision and disbursement on an Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan.

SBA Debt Relief

  • The SBA will automatically pay the principal, interest, and fees of current 7(a), 504, and microloans for a period of six months
  • The SBA will also automatically pay the principal, interest, and fees of new 7(a), 504, and microloans issued prior to September 27, 2020

For current SBA Serviced Disaster (Home and Business) Loans in “regular servicing” status on March 1, 2020, the SBA is providing automatic deferments through December 31, 2020.

Additional Small Business Relief Options Information: SBA Coronavirus Relief Options

CA-based small businesses that don’t qualify for Federal Loans, check out the California Disaster Relief Loan Guarantee Program

Community Advantage (CA) Recovery Loans

The SBA has developed a new COVID-19 recovery program, the “Community Advantage (CA) Recovery Loans” for eligible CA Lenders to provide technical and financial assistance to assist small businesses located in underserved areas with retooling their business models for the COVID-19 environment and building financial resiliency against potential future disruptions.


Scams and Fraud Schemes

The SBA warns of potential fraud schemes related to their economic stimulus programs. Be on the lookout for grant fraud, loan fraud, and phishing: SBA Programs – Scams and Fraud Alerts

A few things to note/be aware of:

  1. SBA does not initiate contact on either 7a or Disaster loans or grant
  2. If you are contacted by someone promising to get approval of an SBA loan, but requires payment upfront, suspect fraud
  3. Look out for phishing attacks/scams utilizing the SBA logo. These may be attempts to obtain your personally identifiable information (PII)
  4. Any email communication from SBA will come from accounts ending with sba.gov

FBI Urges Vigilance During COVID-19 Pandemic

Be wary of charity requests in wake of COVID-19. Law enforcement agencies warn the public to be on the lookout for fraudulent schemes, false promises of cures or vaccines as well as people posing as UNICEF, the Red Cross, or other well-known charities.


National Grants and Loans

Artist Relief


Comcast RISE

Comcast RISE is a multi-year commitment to provide marketing, creative, media, and technology services to Black, Indigenous and People of Color (BIPOC)-owned business across the country. Businesses that qualify will receive marketing consultations, media placements, commercial creative production services, and/or technology services from Effectv and Comcast Business.


GoFundMe.org Small Business Relief Fund

GoFundMe is providing matching grants of $500 to small businesses that have been impacted by the COVID-19 crisis. If a small business raises $500 on their GoFundMe and meets the eligibility criteria, they may be considered to receive a $500 matching grant from the GoFundMe.org Small Business Relief Fund:


Kiva US Small Business Loans

Effective immediately, US applicants for a Kiva loan will have access to the following:


KKR Small Business Builders Grants

KKR Small Business Builders program will make grants of $10,000 to eligible small businesses across the country through the Hello Alice platform. To be eligible, a business must have between 5 and 50 employees, less than $7 million USD in annual revenue, demonstrated need for support, a strong plan for moving forward, and be in good standing with the IRS or their local regulatory body.


LISC Rural Relief Small Business Grants

Grants will be made in amounts ranging from $5,000 to $20,000. LISC will use the funding to provide grants to businesses facing immediate financial pressure because of COVID-19. Rural communities are defined as having a population of 50,000 or less.


Main Street Lending Program

The Federal Reserve Board announced changes designed to make Main Street Lending Program loans available to smaller businesses and not-for-profits. The board reduced the minimum loan amount on three of the five Main Street loan facilities from $250,000 to $100,000. To encourage provision of the smaller loans, the board waived transaction fees for all loans under $250,000.

The minimum loan size was reduced to $250K to allow more small businesses to participate.

The Federal Reserve has expanded its $600 billion Main Street Lending Program to serve smaller businesses

The Federal Reserve Board announced that it has modified the Main Street Lending Program to provide greater access to credit for not-for-profit organizations such as educational institutions, hospitals, and social service organizations.


Restaurant Revitalization Fund (RRF)

Restaurant Revitalization Fund recipients revealed:

SBA officially closes Restaurant Revitalization Fund after awarding the program’s full $28.6 billion appropriation to more than 100,000 restaurants, bars, and other businesses that provide on-site food and drink.

Restaurant Revitalization Fund stopped accepting applications Monday, May 24 at 5:00 PM. It remained open only to the smallest providers (2019 revenue under $50K) of on-site food and drink as they can qualify as a priority borrower. The program has received 303,000 applications requesting loans of $70 billion but has only $29 billion in funding.

This program provides emergency assistance for eligible restaurants, bars, and other qualifying businesses impacted by COVID-19. Registration for the program opened on April 30, 2021, and began accepting application submissions on May 3, 2021. For the first 21 days that the program is open, the SBA will prioritize reviewing applications from small businesses owned by women, veterans, and socially and economically disadvantaged individuals. Following the 21-day period, all eligible applicants are encouraged to submit applications.


Shuttered Venue Grant Program

Shuttered Venue Operators Grant program enters supplemental phase – The SBA said in a news release on Aug. 27, that it would begin sending invitations for supplemental SVOG awards.

Shuttered Venue Operator Grants totaling $54.2 million had been awarded to 50 recipients through midday Thursday, the U.S. Small Business Administration (SBA) reported.

The SBA announced that it will start taking Shuttered Venue Operators Grant applications on April 8, 2021. These grants are available to qualified theaters, performing arts organizations, museums, etc. Grants may be awarded up to the lesser of 45% of the grantee’s 2019 gross earned revenue or $10 million (alternative formulas apply to those businesses not in operation in 2019).

New PPP guidance from the SBA incorporates changes to the program made by the American Rescue Plan Act and establishes that entities that receive a Shuttered Venue Operators Grant (SVOG) cannot subsequently receive a PPP loan.

SBA created a website for the Shuttered Venue Grant Program:

  • The Shuttered Venue Operators (SVO) Grant program was established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, signed into law on December 27, 2020. The program includes $15 billion in grants to shuttered venues.
  • Eligible applicants may qualify for SVO Grants equal to 45% of their gross earned revenue, with the maximum amount available for a single grant award of $10 million. $2 billion is reserved for eligible applications with up to 50 full-time employees.
  • Shuttered Venue Operators Grant
  • Shuttered Venue Operators Grants – FAQ

Economic Stimulus Payments

Some people got more than one notice about their Economic Impact Payments. Here are some details about each notice and what action some people may need to take:

Here’s how the third Economic Impact Payment is different from earlier payments:

Taxpayers who don’t have their Notices 1444 and/or 1444-B, Your Economic Impact Payment, can view the amounts of their Economic Impact Payments through their personal IRS online account.

As required by law, all first and second Economic Impact Payments issued; eligible people can claim Recovery Rebate Credit

IRS reminds taxpayers to keep Notice 1444, Your Economic Impact Payment – The IRS mails Notice 1444 to the taxpayer’s address on record within 15 days after the payment goes out. Individuals should keep the letter for their tax records, especially if they think their payment amount is wrong. When taxpayers file their 2020 tax return, they can refer to Notice 1444 and claim additional credits, if they are eligible for them.

Filing a 2019 return will not affect your economic impact payment, if you received an economic impact payment based on your 2018 return:

The IRS began distributing economic incentive payments to 80 million individual taxpayers the week of 4/13. The IRS’ “Get My Payment” website is live, where taxpayers can check the status of their Economic Impact Payment:

In Information Release 2020-69, the IRS announced it has created a new website that allows non-filers to request economic impact payments.

The IRS issued an information notice discussing why a taxpayer’s Economic Impact Payment may be less than anticipated:

The Internal Revenue Service won’t charge people who received an economic stimulus payment on a prepaid debit card in the mail and threw it away because they thought the envelope was junk mail.

If Get My Payment shows your economic stimulus payment was issued but you have not received it and it has been more than 5 days since the scheduled deposit date (or more than 4 weeks since it was mailed by check) you should initiate a trace on your Payment by calling the IRS at 800-919-9835 or you may submit Form 3911 (PDF):

The IRS alerted nursing homes and other care facilities that Economic Impact Payments (EIPs) generally belong to the recipients, not the organizations providing the care.


Provisions and Relief for Nonprofits

JoA Podcast: PPP and tax advice for not-for-profits:

Free PPE available for San Jose nonprofits:

COVID-19 Lessons for Nonprofits Podcast:

PPP and pandemic-related tips for nonprofit preparers, auditors, and board members:

CARES Act and Federal Arts Funding Opportunities for Nonprofit and Commercial Arts Organizations and Individual Artists:

The CARES Act does not forget about the immediate needs and relief for nonprofit organizations. The Act includes several provisions that are unique to the nonprofit industry including loans at reduced interest rates and tax benefits to donors. These provisions are summarized in the link below, together with the other issues of interest to the nonprofit sector.

The SBA has concluded that PPP Loans issued to nonprofits do not represent federal financial assistance. Therefore, these loans will not be subject to Single Audit requirements. However, loans issued under the EIDL program will be considered as federal financial assistance and are required on the SEFA.


Federal Tax Filing Dates

IRS extends additional tax deadlines to May 17, 2021:

  • Individual retirement arrangements (IRAs)
  • Health savings accounts
  • Archer medical savings accounts
  • Coverdell education savings accounts
  • The deadline for reporting and paying the 10% additional tax on amounts included in gross income from 2020 distributions from IRAs or workplace-based retirement plans is now May 17, 2021
  • The due date for Form 5498 series returns related to these accounts is now June 30, 2021
  • The law provides a three-year window to claim a refund. Normally, April 15, 2021, is the deadline to claim a refund from tax year 2017 but, the IRS has extended it to May 17, 2021
  • Foreign trusts and estates with federal income tax filing or payment obligations, who file Form 1040-NR, now have until May 17, 2021.
  • IRS extends additional tax deadlines to May 17
  • Note: April 15, 2021 is still the deadline to make first quarter estimated tax payments. However, a bill to postpone the due date to May 17 has been introduced in Congress:

Tax Day for individuals extended to May 17, 2021: Treasury, IRS extend filing and payment deadline. Please note:

IRS extends additional tax deadlines for individuals to May 17:

IRS announced that the nation’s tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns.

When taxpayers get ready to file their federal tax return there are new things to consider when it comes to which credits to claim and what deductions to take. These things can affect the size of any refund the taxpayer may receive.

The IRS announced a new program, the Taxpayer Relief Initiative, to help taxpayers who are unable to pay their taxes because of the pandemic.

The IRS Taxpayer Advocate Service has released an online tool that businesses can use to help determine which relief provisions they can qualify for:

The IRS and the Treasury Department plan to send interest payments averaging $18 to approximately 13.9 million individual taxpayers who filed their 2019 federal income tax returns on time and are receiving tax refunds.

IRS announces taxpayers can (finally) e-file amended individual income tax returns (Form 1040X). Currently, only Forms 1040X for tax year 2019 can be e-filed but the IRS will expand program to include other years.

Treasury Dept. announces that tax filing due date of July 15 will not be moved:

Taxpayers who are owed a refund may receive a second check this year if they took advantage of the July 15 extended filing deadline. Individuals eligible for a refund who didn’t receive one by April 15 will get paid interest, accruing from the original April filing deadline to the date that the refund is issued. The interest rate is 5% through June 30 and 3% after that. The interest payment may come separately from the refund.

IRS reminder: June 15 tax deadline postponed to July 15 for taxpayers who live and work abroad:

On April 9, 2020, the IRS expanded tax filing and payment deadline relief. The extensions generally now apply to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020.

  • Notice 2020-23 includes an expanded list of forms that are now due July 15th including Forms 5471, 5472, 3520, and 8938.
  • Delayed filing of Form 990 due May 15th until July 15th. This relief applies to calendar year organizations with a May 15th due date and fiscal year organizations with a June 30, 2019 year-end that previously extended their tax returns.
  • Extends the period to complete a rollover distribution from an eligible retirement plan until July 15, 2020, if the 60-day deadline to complete the rollover falls on or after April 1, 2020, and before July 15, 2020. This could provide welcome relief to taxpayers who took an RMD in February, before the CARES Act suspended the RMD requirement for 2020. These taxpayers now have until July 15, 2020, to recontribute their withdrawals and treat them as a rollover. Unfortunately, taxpayers that received their distributions prior to Feb 1st are not currently included in this relief. Note—the “one rollover every twelve month rule” still applies which may prevent taxpayers from taking advantage of this provision.
  • Relief was included for estimated tax payments due June 15, 2020. That means any individual or corporation that has a quarterly estimated tax payment due on or after April 1, 2020, and before July 15, 2020, can wait until July 15 to make that payment, without penalty.
  • Also extended were the 45 day identification period and 180 day acquisition period applicable to Code Section 1031 tax deferred exchanges. If either date occurs after April 1st it is now extended to July 15th.
  • For 2016 tax returns, the normal April 15 deadline to claim a refund has also been extended to July 15, 2020.
  • IRS News Releases – IRS extends more tax deadlines to cover individuals, trusts, estates corporations and others

On March 20, 2020, Treasury Secretary Mnuchin announced that the filing due date for returns normally due on April 15th will be moved to July 15th. Later that day the IRS issued formal guidance with Notice 2020-18. Income tax returns are now due July 15th with no need to file an extension request or pay any tax owed for 2019. The new filing date applies to individuals, corporations, trusts, estates, and partnerships.

Aside from income taxes, other tax related payments that are normally due April 15th, such as funding an Individual Retirement Account or a Health Savings Account, can now be deferred until July 15, 2020 and still deducted on your 2019 tax returns.


Deferred Tax Payments

On March 18, 2020, the Internal Revenue Service released Notice 2020-17 granting a 3 month deferral for 2019 and 2020 tax year payments normally due April 15th. Payments for 2019 tax liabilities and estimate #1 for 2020 can be paid on or before July 15, 2020 with no interest or penalty charges. Notice 2020-18 referred to above revoked the ceiling amount on deferrable tax imposed by Notice 2020-17 so currently, there is no limitation on the amount of income tax that can be deferred.

The IRS estimates this tax delay will keep over $300 billion in the economy.

Other taxes that are due April 15th, such as gift tax, excise tax, and payroll tax cannot be deferred under current IRS guidance.


Employer’s Quarterly Federal Tax Return

Employers who are filing Form 941, Employer’s Quarterly Federal Tax Return and claiming an employer tax credit should read the instructions carefully and take their time when completing the form to avoid mistakes.

Form 941, Employer’s Quarterly Federal Tax Return due April 30, 2020 – While most tax and information return due dates were extended until July 15, 2020, the IRS Form 941, Employer’s Quarterly Federal Tax Return, due date was not extended.

  • Taxpayers who have not been approved for PPP loan forgiveness may defer depositing the payment of the employer’s 6.2% share of Social Security taxes and Railroad Retirement Tax for the period March 27, 2020, through December 31, 2020. (CARES Act §2302).
  • Employers claiming the Employee Retention Credit against the employer’s share of Social Security/Railroad Retirement taxes will not claim the credit on their first quarter Form 941. Eligible employers will add the 50% of qualified wages paid to an employee(s) between March 13, 2020, and March 31, 2020, inclusive, to the 50% of any qualified wages paid during the second quarter of 2020 on their second quarter Form 941, 941-SS, or 941-PR.

IRS Collection and Enforcement Relief – People First Initiative 

Update 7/8 – IRS reminds taxpayers who took advantage of the People First Initiative tax relief and did not make previously owed tax payments between March 25 to July 15 that they need to restart their payments.

IRS has announced a “taxpayer relief” program for taxpayers with installment agreements or pending collection action.


IRS Updates

Employers who are filing Form 7200, Advance Payment of Employer Credits Due to COVID-19 should read the instructions carefully and take their time when completing this form to avoid mistakes.


The IRS announced it was extending the authorization to electronically sign a large number of IRS forms until Dec. 31, 2021, and adding a number of new forms.


Emergency financial aid grants made by a federal agency, state, Indian tribe, higher education institution or scholarship-granting organization (including a tribal organization) to a student because of an event related to the COVID-19 pandemic are not included in the student’s gross income.


Businesses can claim a 100% deduction on restaurant meals through the end of 2022, the IRS announced.


The IRS issued Announcement 2021-7 clarifying that the purchase of personal protective equipment, such as masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of coronavirus are deductible medical expenses. These expenses are also eligible to be paid or reimbursed under health flexible spending arrangements (health FSAs), Archer medical savings accounts (Archer MSAs), health reimbursement arrangements (HRAs), or health savings accounts (HSAs).


IRS officials issued an alert concerning amended returns and claims for the Domestic Production Activities Deduction (DPAD). This provision of tax law was repealed as part of the Tax Cuts and Jobs Act for taxable years after December 31, 2017. In the wake of the repeal, the IRS has received a wave of questionable amended returns and claims for tax benefits in the billions of dollars.


Earlier this month, the IRS issued notices to approximately 260,000 taxpayers stating they haven’t filed their 2019 federal tax return. These notices, referred to as CP59 notices, are issued yearly to identified taxpayers who have failed to file a tax return that was due the prior calendar year (Tax Year 2019). Due to pandemic-related shutdowns, the IRS has not completed processing all 2019 returns at this time. Therefore, the CP59 notices should not have been sent because some portion of the recipients may actually have filed a return that is still being processed.

  • People who filed their 2019 return but nevertheless received the CP59 notice, can disregard the letter and do not need to take any action. There is no need to call or respond to the CP59 notice because the IRS continues to process 2019 tax returns as quickly as possible.
  • IRS Statement about CP59 notices

New IRS form available for self-employed individuals to claim COVID-19 sick and family leave tax credits under FFCRA:


The IRS provided a safe harbor under which “eligible educators” can deduct unreimbursed expenses for COVID-19 protective items as educator expenses under Sec. 62(a)(2)(D) ( Proc. 2021-15).


Certain individuals will not be subject to the Sec. 6654 penalty on the underpayment of estimated income taxes if the underpayment is solely attributable to the recent repeal of the excess business loss limitations, the IRS announced on Tuesday


IRS announced that the nation’s tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns.


Opportunity Zone Funds and Investors granted deadline relief in Notice 2021-10.


The IRS will not be sending copies of the new Form 1099-NEC, Nonemployee Compensation, to California or any other state. (The IRS will continue to send all other Forms 1099 to the states.) As a result, businesses must send copies of Form 1099-NEC directly to the FTB, even if a copy was filed with the IRS. This applies only to the Form 1099-NEC.


In response to COVID-19, the IRS is allowing employers to switch from the vehicle lease valuation method to the cents-per-mile method (57.5 cents for 2020, 56 cents for 2021) for determining the value of an employee’s personal use of a vehicle during the pandemic (Notice 2021-7)


IRS announces a delay in processing Form 7200 Advance Payment of Employer Credits:

  • Employers will experience a delay in receiving payments associated with Form 7200, Advance Payment of Employer Credits, processed between late-December and mid-January due to standard end-of-year close out. The IRS will continue to accept and process valid Forms 7200 during this time, and the payment of valid requests during this time will begin to be processed on January 21, 2021. Employers will still receive Letter 6312, Form 7200 Response, if the Form 7200 cannot be processed.

The IRS’s response to the COVID-19 pandemic has included focused relief from tax penalties, but taxpayers and tax professionals should not expect a “blanket” approach:


The IRS reviewed its collection activities to see how it could provide relief for taxpayers who owe taxes but are struggling financially because of the pandemic. The agency is expanding taxpayer options for making payments and other ways to resolve tax debt.


The IRS reminds taxpayers to check tax withholdings now, as the last quarter of 2020 begins, to avoid a surprise when filing next year. Some things to consider that will affect taxes owed in 2020 include: Coronavirus tax relief, Disasters such as wildfires and hurricanes, Unemployment compensation, etc.


The IRS launched a redesigned page on IRS.gov to help business owners navigate the federal tax steps when closing a business.


IRS provides final regulations on income tax withholding on certain periodic retirement and annuity payments made after Dec. 31, 2020.


Estates and Trusts – On Sept 21, the IRS issued final regulations that provide guidance for decedents’ estates and non-grantor trusts clarifying that certain deductions of such estates and non-grantor trusts are not miscellaneous itemized deductions.


The IRS Taxpayer Advocate Service has released an online tool that businesses can use to help determine which relief provisions they can qualify for:


IRS releases draft of new Form 941 to account for temporary deferral of employee social security tax


The IRS reminds taxpayers and tax practitioners of the procedures for requesting expedited handling of requests for letter rulings under Rev. Proc. 2020-1, 2020-1 I.R.B. 1 (January 2, 2020)


6 more IRS forms can be filed with e-signatures: Form 706, U.S. Estate (and Generation-Skipping Transfer) Tax Return; Form 706-NA, U.S. Estate (and Generation-Skipping Transfer) Tax Return; Form 709, U.S. Gift (and Generation-Skipping Transfer) Tax Return; Form 1120-ND, Return for Nuclear Decommissioning Funds and Certain Related Persons; Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts; and Form 3520-A, Annual Information Return of Foreign Trust With a U.S. Owner


The new charitable deduction for non-itemizers – A one-time deduction of up to $300 can be taken directly on individual returns.


The IRS announced it will temporarily allow the use of digital signatures on certain forms that cannot be filed electronically.


With millions of Americans now receiving taxable unemployment compensation, many of them for the first time, the IRS reminded people receiving unemployment compensation that they can have tax withheld from their benefits now to help avoid owing taxes on this income when they file their federal income tax return next year.


IRS updates status of operations:

  • Power of Attorney processing is taking 15 days rather than 5 days. IRS is working on accepting digital signatures by early 2021.
  • Payments submitted to IRS may still be unopened. They will be posted as of date received not the date processed
  • Continued delay in responding to taxpayer correspondence
  • Continued delay in processing paper-filed returns
  • IRS Operations During COVID-19: Mission-critical functions continue

Taxpayers requesting an automatic tax accounting method change need to include their original Form 3115 with the tax return for the year of change. Effective July 31, the required duplicate copy may be FAXed to the IRS instead of mailing it.


Now is a good time for people to begin thinking about next year’s tax return. Here are some suggestions to help taxpayers keep good records:


Rehabilitation Credit – The IRS issued Notice 2020-58 (PDF) that provides additional relief to taxpayers in satisfying the substantial rehabilitation test.


The IRS issued a long-awaited package of guidance regarding the Sec. 163(j) limitation on business interest expense deductions:


The IRS has started sending letters to taxpayers who are seeing delays in the processing of their Form 7200, Advance Payment of Employer Credits Due to COVID-19. A taxpayer will receive letter 6312 if the IRS has either rejected their Form 7200 or made a change to the requested amount of advance payment due to a computation error.


During the pandemic, the IRS has released over 500 FAQ’s to provide guidance to taxpayers and often revised these FAQ’s. The Taxpayer Advocate office points out that these FAQ’s are not “legal authority” that can be relied upon to avoid taxpayer penalties. The Advocate is requesting that the IRS identify these FAQ’s as “Internal Revenue Service Information” that can be relied upon to avoid penalties.


Unclaimed income tax refunds worth more than $1.5 billion await an estimated 1.4 million individual taxpayers who did not file a 2016 federal income tax return. In Notice 2020-23, the IRS extended the due date for filing tax year 2016 returns and claiming refunds for that year to July 15, 2020, as a result of COVID-19.


The Treasury and IRS today issued proposed regulations and temporary regulations that provide guidance for consolidated groups regarding net operating losses (NOLs):


IRS announces they will generally not start new audits until July 15, 2020:


The Treasury Department and the Internal Revenue Service provided tax relief for certain taxpayers affected by the COVID-19 pandemic involved in new markets tax credit transactions.


The IRS is extending the due dates on its balance due notices because it wasn’t able to mail out the preprinted letters to taxpayers due to office closures:


The IRS has begun to pause collection activities for many taxpayers – Taxpayers on installment agreements may suspend making any payments normally due between April 1 and July 15, 2020.


The IRS is no longer processing paper filed individual income tax returns. Information Release 2020-68 urges taxpayers to e-file personal tax returns as paper returns are no longer being processed due to staff reductions and closures of processing centers:


A possible benefit from filing a 2019 superseded return – The election made on the original return to apply the overpayment towards 2020 estimated tax can be changed so the overpayment can now be refunded. However, be aware that a superseded return for individual taxpayers must be manually filed so it may take some time to be processed. Superseded business returns can be e-filed, greatly speeding up the process.


The IRS released guidance on May 7th (Rev. Proc. 2020-30) telling taxpayers that business activities conducted overseas during a consecutive 60-day period won’t be taken into account for determining a foreign disregarded entity or a foreign branch.

  • U.S. companies that operate foreign entities and individuals working in foreign branches are required to follow additional tax compliance rules.
  • Rev. Proc. 2020-30

The IRS issued proposed regulations (REG-113295-18) to clarify that certain deductions are allowed to an estate or nongrantor trust because they are not miscellaneous itemized deductions:


IRS announced a “beginning of construction” safe harbor for taxpayers developing renewable energy projects and producing electricity from sources such as wind, biomass, geothermal, landfill gas, trash, and hydropower. Safe harbor is also available for taxpayers using technologies such as solar panels, fuel cells, microturbines, and combined heat and power systems.


IRS reminds taxpayers that Forms 1139 and 1045 can be submitted via FAX and provides instructions for claiming a refund of the corporate Minimum Tax Credit:


Cash payments that employers make to charitable organizations providing relief to victims of the COVID-19 pandemic in exchange for sick, vacation or personal leave that their employees forgo will not be treated as compensation, according to new guidance from the IRS.


IRS allows remote signatures on retirement plan elections:


Qualified Opportunity Funds

The IRS provided guidance for Qualified Opportunity Funds (QOFs) and their investors in response to the COVID-19 pandemic:


Net Operating Loss (NOL)

To assist taxpayers during the COVID-19 pandemic, Congress enacted legislation permitting businesses to elect to carry back net operating losses (NOLs) arising in 2018, 2019, or 2020 five years.

The IRS issued proposed (REG-125716-18) and temporary regulations (D. 9900) to provide guidance for consolidated groups on the treatment of net operating losses (NOLs) after recent statutory changes.

IRS releases FAQ for C Corps carrying back a NOL to a year in which AMT applies:


Mandatory Paid Sick Leave and Family Leave

New IRS form available for self-employed individuals to claim COVID-19 sick and family leave tax credits under FFCRA:

IRS updates FAQs on paid sick leave credit and family leave credit:

The IRS issued temporary and proposed regulations on the recapture of excess employment tax credits under the Families First Coronavirus Response Act and the CARES Act. The regulations cover the reconciling of advance payments of the acts’ refundable employments tax credits and authorize assessments to recapture the credits, when necessary.

IRS explains how employers should report the amount of qualified sick and family leave wages paid to employees under the Families First Coronavirus Response Act:

On April 3, 2020, the IRS has released Form 7200 to claim advance payment of tax credits discussed below.

On March 18, 2020, the President signed H.R. 6201 to provide health benefits and mandatory paid time off to care for an employee’s health needs or a family member’s. Employee compensation would be completely paid by an employer tax credit. The paid leave provisions are effective on April 1, 2020, and apply to leave taken between April 1, 2020, and December 31, 2020. Among the significant provisions are:

  • Increased government funding for unemployment benefits and food assistance
  • Requires health plans to provide free COVID-19 testing
  • Creates new mandatory Emergency Sick Leave and Family/Medical Leave programs through Dec. 31, 2020
    • Employers with less than 500 employees must provide:
      • Eighty hours of paid Sick Leave at 100% of an employee’s pay (capped at $511 per day) when the employee cannot work (or telework) because of quarantine or self-quarantine or experiencing COVID-19 symptoms.
      • Eighty hours of paid Sick Leave at 2/3 regular pay (capped at $200 per day) to care for an individual subject to quarantine, self-quarantine or experiencing COVID-19 symptoms, or care for a child whose school is closed or daycare provider is unavailable.
      • Fifty (50) days of paid Family Leave at 2/3 regular pay (capped at $200 per day) to care for a child whose school is closed or daycare provider is unavailable.
    • Guidance issued by the Department of Labor indicates, to qualify, employees must be employed on April 1, 2020 or later and their employer must have work available that they are prevented from performing (at the normal worksite or virtually) due to one of the qualifying reasons discussed above.
    • Employers of fewer than 50 employees can opt-out of providing Family Leave for child care if it would “prevent the business from continuing as a going concern”. Additional guidance is expected soon.
    • Employers can receive a refundable tax credit up to the daily amounts paid to employees ($511 or $200). Operational guidance is expected soon.
    • Employers can use their payroll tax deposits to fund the benefits in lieu of making the deposit with the IRS. Any shortfall will be covered by a refundable credit. Both employee trust fund amounts and employer payroll taxes can be used to fund these new employee benefit payments.
    • Payments to employees would not be subject to employer payroll taxes but will be treated as compensation to the employee.
    • Employers cannot modify or reduce existing sick leave or PTO policies because of these additional benefits.
    • A tax credit is available to self-employed individuals who are in the same circumstances as employees discussed above.
  • For more information: Families First Coronavirus Response Act (FFCRA)

Employer Aid to Employees

With Notice 2021-26, the IRS explained that dependent care assistance program balances carried forward under temporary COVID-19 relief provisions retain their exclusion from participating employees’ gross income and wages.

The IRS wants to remind employers that they can receive a refundable payroll tax credit when offering paid time off to employees for COVID related time off including time to get vaccinated or recover from vaccine side effects:

Free COBRA Insurance Premiums begin April 1, 2021. The American Rescue Plan Act authorized 6 months of no cost COBRA health insurance coverage for “assistance eligible individuals”. Starting April 1st, the individual’s employer or former employer is responsible for the payment of premiums. The employer will be reimbursed by a refundable federal payroll tax credit. Further guidance is expected “soon” from IRS and Department of Labor even as the program officially begins later this week.

The IRS provided greater flexibility, due to the pandemic, to employee benefit plans offering health flexible spending arrangements (FSAs) or dependent care assistance programs. Under the COVID-related Taxpayer Certainty and Disaster Tax Relief Act of 2020, these plans now have additional discretion in 2021 and 2022 to adjust their programs to help employees better meet the unanticipated consequences of the public health emergency.

Employers looking to assist their employees are able to provide tax-free assistance while still generating a tax deduction. Employers can make tax-free payments to employees, to reimburse for, or pay reasonable and necessary personal, family, or living expenses incurred as a result of a qualifying disaster. Amounts paid cannot be made as income replacement payments. Qualified disaster relief payments can allow employees to receive tax-free income while payments are still deductible expenses of the employer. Eligible expenses can include: medication, medical expenses, hand sanitizer, child care, and home office expenses.

If you are experiencing a reduction in your work force it may be possible to structure a portion of a severance package as a qualified disaster relief payment so employees will receive tax-free income and you can minimize employer payroll taxes.


The IRS released Notice 2020-29 that allows for mid-year changes to employer-sponsored health care coverage, healthcare FSAs and dependent care accounts. The new rules for 2020 will help workers modify the plan choices they made for tax year 2020 last year, however, it is up to the employer to allow these changes. Employees may want to:


Business Loan Modifications

On March 22, 2020, the federal financial institution regulatory agencies and the state banking regulators issued a joint statement providing some relief for borrowers by easing restrictions one might normally face when seeking loan modifications. Borrowers should reach out to their institutions as soon as possible as loans must be current and not in default to qualify for this benefit.


Home Owners

The Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac will continue to offer COVID-19 forbearance to qualifying multifamily property owners through September 30, 2021, subject to the continued tenant protections FHFA has imposed during the pandemic. This is the third extension of the programs, which were set to expire June 30, 2021.

The FHFA announced that Fannie Mae and Freddie Mac will extend some temporary loan origination flexibilities until May 31, 2021. All temporary flexibilities were originally set to expire on April 30, 2021.

FHFA announced that Fannie Mae and Freddie Mac are extending the moratoriums on single-family foreclosures and real estate owned (REO) evictions until June 30, 2021

Multifamily property owners with mortgages backed by Fannie Mae or Freddie Mac who enter into a new or modified forbearance agreement must inform tenants in writing about tenant protections during the multifamily property owner’s forbearance and repayment periods.

FHFA announced that Fannie Mae and Freddie Mac are allowing servicers to extend forbearance agreements for multifamily property owners with existing forbearance agreements for up to three months, for a total forbearance of up to six months.

The Federal Housing Finance Agency (FHFA) is extending several loan origination flexibilities currently offered by Fannie Mae and Freddie Mac designed to help borrowers during the COVID-19 national emergency.

The Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the Enterprises) have issued temporary guidance regarding the eligibility of borrowers who are in forbearance, or have recently ended their forbearance, looking to refinance or buy a new home:

Freddie Mac Announces COVID-19 Payment Deferral – The Payment Deferral solution returns a homeowner’s monthly mortgage payment to its pre-COVID amount by adding up to 12 months of missed payments, including escrow advances, to the end of the mortgage term without accruing any additional interest or late fees.

Mortgage lenders are offering mortgage relief options if COVID-19 has impacted your ability to make your monthly mortgage payment.

Residential Mortgage Forbearance – The Federal Housing Finance Agency (FHFA) wants homeowners in forbearance to know they are not required to make lump sum repayments if their mortgages are backed by Fannie Mae or Freddie Mac.


Rental Property Owners

Freddie Mac And Fannie Mae Extend Ban On Evictions And Foreclosures Until June 30th. The current moratorium was set to expire on May 17th:

On March 23, 2020, The Federal Housing Finance Agency announced Fannie Mae and Freddie Mac will offer multifamily property owners mortgage forbearance with the condition that they suspend all evictions for renters unable to pay rent due to the impact of COVID-19.


Retirement Plans 

Partial plan termination relief provided by Congress – The Consolidated Appropriations Act, 2021 (CAA), includes a temporary rule providing COVID-related relief from certain partial plan terminations.

IRS Releases Draft Form for Coronavirus-related Distributions: The IRS has released a draft of Form 8915-E [Qualified 2020 Disaster Retirement Plan Distributions and Repayments (Use for Coronavirus-Related Distributions)], which is used by taxpayers who were adversely affected by a qualified 2020 disaster and received a qualified 2020 disaster distribution. According to the IRS, the coronavirus is the only qualified 2020 disaster reportable on Form 8915-E. However, Congress has been considering legislation that would provide disaster relief for certain 2020 disasters other than the coronavirus.

COVID-19 and withdrawals from retirement plans – Taxpayers under financial duress caused by the pandemic can avoid penalties.

Californians who borrow up to $100,000 from their 401(k) retirement accounts won’t face state tax penalties if they repay the loans within five years under a new state law. Governor Newsom signed B. 276 on September 11, to bring California’s tax treatment of retirement account loans in line with the federal coronavirus relief law.

  • The law took effect immediately to match the CARES Act (Public Law 116-136), which allows individuals to borrow up to $100,000 from their 401(k) retirement accounts and repay within five years without penalty.
  • Without the law, the second $50,000 of such a loan would be considered a distribution subject to income tax and early withdrawal penalties

IRS reminds taxpayers that favorable tax treatment is available to access funds from retirement accounts:

The IRS reminds seniors and retirees that they are not required to take money out of their IRAs and workplace retirement plans this year. The CARES Act, waives required minimum distributions during 2020 for IRAs and retirement plans, including beneficiaries with inherited accounts. This waiver includes RMDs for individuals who turned age 70 ½ in 2019 and took their first RMD in 2020.

Guidance issued Monday (Notice 2020-52) allows plan sponsors who maintain safe harbor 401(k) plans to suspend or reduce contributions by Aug. 31 without conflicting with existing notification requirements. Safe harbor plans are qualified retirement programs funded primarily by employers, rather than traditional 401(k)’s that employees fill with their own money. Current law requires that safe harbor plan sponsors notify participants of any changes at least 30 days before they take effect.

IRS announced that anyone who already took a required minimum distribution (RMD) in 2020 from certain retirement accounts now has the opportunity to roll those funds back into a retirement account following the CARES Act RMD waiver for 2020 and the rollover date has been extended to August 31, 2020.

IRS expands eligibility criteria for taxpayers receiving COVID-19 related distributions from retirement plans and IRA’s. Eligible taxpayers now include an individual who experiences adverse financial consequences as a result of:

  • the individual having a reduction in pay (or self-employment income) due to COVID-19 or having a job offer rescinded or start date for a job delayed due to COVID-19;
  • the individual’s spouse or a member of the individual’s household (as defined below) being quarantined, being furloughed or laid off, or having work hours reduced due to COVID-19, being unable to work due to lack of childcare due to COVID-19, having a reduction in pay (or self-employment income) due to COVID-19, or having a job offer rescinded or start date for a job delayed due to COVID-19; or
  • closing or reducing hours of a business owned or operated by the individual’s spouse or a member of the individual’s household due to COVID-19.
  • Caution – CA has conformed to the COVID-19 distribution changes but currently does not conform to the new $100,000 maximum loan amount. A taxpayer receiving a $100K loan will be treated as receiving the maximum loan allowed of $50K and a $50K distribution.
  • Notice 2020-50 – Guidance for Coronavirus-Related Distributions and Loans from Retirement Plans Under the CARES Act
  • Relief for taxpayers affected by COVID-19 who take distributions or loans from retirement plans

Crowdfunding

SEC temporarily expands access to crowdfunding – The SEC is expediting the offering process for Regulation Crowdfunding for eligible companies by providing relief from certain rules with respect to the timing of a company’s offering and the financial statements required.


Student Loans

Options for student loans during the pandemic:

  • Under the CARES Act, borrowers with Direct Loans or Federal Family Education Loans (FFEL) held by the ED do not need to make any payments until Sept. 30th. Interest on these loans has also been waived through Sept. 30th.
  • To find out whether student loans are covered by the CARES Act, borrowers can contact their loan servicers or visit studentaid.gov.
  • For student loans that aren’t covered by the CARES Act, there are other options:
  • Journal of Accountancy – Options for clients with student loans during the pandemic

Start Small Think Big (SSTB)

Start Small Think Big (SSTB) is offering regional free legal assistance to all small businesses and nonprofits as part of its Rapid Response Project. Through SSTB’s network of professional volunteers, businesses can consult on legal issues related to COVID-19 such as lease agreements, contracts, employment matters, licensing, and regulations. In addition, businesses can speak with financial experts about money issues.


Health Care Entities

New frequently asked question guidance for health care entities on pandemic-related questions have been added to a list that was first posted Aug. 3:

Nongovernmental health care entities’ pandemic-related issues Technical Q&A:

Pandemic-related FAQs for health care entities:


Remote Working 

Supreme Court declines to take up remote worker taxation case involving Massachusetts’s taxation of remote workers during the COVID-19 pandemic. This decision has significant implications for employees that left their “normal” work locations during the pandemic.  Massachusetts can continue to tax workers while actually working outside the state.

The IRS wants individuals to consider taking the home office deduction if they qualify.

FTB updates FAQs to announce California’s treatment of telecommuting employees for franchise tax nexus purposes:

  • California will not treat an out‐of‐state corporation whose only connection to California is the presence of an employee who is currently teleworking in California due to Executive Order N‐33‐20 (shelter in place order) as being actively engaged in a transaction for the purposes of financial or pecuniary gain or profit.
  • California will not include the compensation attributable to an employee who is currently teleworking due to Executive Order N‐33‐20 in the minimum payroll threshold set forth in California Revenue & Taxation Code section 23101(b)(2)(4).
  • Teleworking and the “Stay at Home” order FAQ

Journal of Accountancy podcast: Teleworking and state and local taxes – the huge implications for state and local taxes raised by workers more often untethered from the employer’s physical location, sometimes in another state.


California

Tax Filing & Payments

California will follow the IRS filing and payment extension date of May 17, 2021, for individual taxpayers only. Like the IRS extension, the California extension will not apply to the estimated tax Q1 payment date of April 15, 2021. Taxpayers must pay their California estimated tax by April 15, 2021, to avoid penalties.

Victims of the California wildfires that began on September 4 now have until January 15, 2021, to file various individual and business tax returns and make tax payments:

IRS released additional guidance outlining the tax filing and payment relief for taxpayers impacted by California wildfires.

Victims of the California wildfires that began Aug. 14 now have until Dec. 15, 2020 to file various individual and business tax returns and make tax payments. Currently, this includes Lake, Monterey, Napa, San Mateo, Santa Cruz, Solano, Sonoma and Yolo counties in California, but taxpayers in localities added later to the disaster area will automatically receive the same filing and payment relief.

The Franchise Tax Board announced that it will be complying with the federal three-month deferral so individual, corporate and LLC tax payments due April 15, 2020 can be delayed until July 15, 2020 without penalty or interest charges. In addition, 2020 individual estimated tax payments normally due April 15th and June 15th can be delayed as well. Corporate estimates normally due between March 12th and July 15th can be deferred to July 15th.

California corporate estimated tax payments can be deferred, corporate estimates normally due between March 12th and July 15th can be deferred to July 15th.

Gov. Newsom signed budget bills that contain new tax provisions effective this year:

  • Suspends personal and corporate NOL deductions from Jan 1, 2020 to Dec 31, 2022 for taxpayers with modified AGI or business income over $1 million
  • Caps business tax credits to $5 million annually
  • Exempts new limited liability companies and limited partnerships from the $800 annual minimum franchise tax for the first year of business
  • More budget/tax changes likely to come in August
  • Governor signs tax bill included in budget deal – no CARES Act conformity

Property Tax

Governor Newsom announced property tax relief for individuals and businesses – Executive order for property tax relief providing for a waiver of the required 10% penalty for late payments for those who experienced hardship due to COVID-19. The waiver is in effect until May 2021.

Due date delayed for filing Business Property Statements (Form 571-L) to May 30th (from May 7th)


Housing

Governor Newsom signed legislation to extend the state’s eviction moratorium through September 30, 2021 and clear rent debt for low-income Californians that have suffered economic hardship due to the pandemic.

CA COVID-19 Rent Relief program – Landlords who participate in the program can get reimbursed for 80% of an eligible renter’s unpaid rent between April 1, 2020, and March 31, 2021, if they agree to waive the remaining 20% of unpaid rent during that specific time period. Eligible renters whose landlords choose not to participate in the program may apply on their own and receive 25% of unpaid rent between April 1, 2020, and March 31, 2021.

  • Note for landlords who don’t participate in the program: While the Rental Assistance Program is optional, if landlords later sue the tenant for damages based on the tenant’s rental arrears without participating, judges in those cases do have the discretion to make a finding on how much the landlord’s requested rent was available to the landlord via the Program and could reduce the landlord’s damages based on the funding available via this program.
  • California’s COVID-19 Rent Relief

Governor Newsom signed an executive order extending authorization for local governments to halt evictions for commercial renters impacted by the COVID-19 pandemic through June 30, 2021.

California recently extended its qualified statewide residential eviction moratorium to June 30, 2021. The new law, SB 91, replaces California’s COVID-19 Tenant Relief Act of 2020 (AB 3088 / “the Act”), signed by Governor Newsom on August 31, 2020, and adds several new features beneficial to both landlords and tenants:

  • Landlords MUST Notify Tenants of the New Law By February 28, 2021 to Preserve Landlords’ Right to Relief
  • SB 91 provides instructions for allocating $1.4 billion in federal emergency rental assistance funds: soon, landlords providing housing to residential tenants have the option to apply for government funding covering up to 80% of rent accumulated during the specified period of April 1, 2020 and March 31, 2021, for tenants who demonstrated they could not pay their rent due to the COVID-19 pandemic.
  • New Eviction Moratorium and Rental Assistance

Governor Newsom announced an agreement to extend the eviction moratorium in California through June 30, 2021 – protecting tenants and small landlords.

CA residents who owe rent from March 2020 through today because they were affected by COVID – lost their job, got sick, or had hours cut – are protected from being evicted by taking a few simple steps:

Gov. Newsom signed an executive order to extend authorization for local governments to halt evictions for commercial renters impacted by COVID-19 through March 31, 2021

New relief for renters, homeowners, and small landlords. Legislation took effect August 31 that protects many Californians who are unable to pay their rent or mortgage because of the COVID-19 pandemic.

Californians who haven’t paid their rent since March 1 because of the coronavirus can stay in their homes through at least Jan. 31 under a new state law Gov. Gavin Newsom signed late Monday — one day before statewide eviction protections are set to expire.

Gov. Newsom issued an executive order extending authorization for local governments to halt evictions for renters impacted by COVID-19, through September 30.

Various Bay Area cities have enacted legislation based on this order.

On March 25, 2020 the Governor announced more than 200 banks including, Wells Fargo, Citibank, JPMorgan Chase and US Bank, have agreed to a 90-day grace period for mortgage payments in CA.


CA Updates for Employees and Employers

Governor Newsom Launches California Restaurant Comeback, including expanded outdoor dining in areas such as sidewalks and parking lots:

Governor Newsom unveiled another component of his $100 billion California Comeback Plan: making historic investments in small business relief. Governor Newsom’s Plan expands the state’s COVID-19 Small Business Relief Grant program to a total of $4 billion.

Governor Newsom signed two bills February 23, 2021, that will provide cash grants to qualified small businesses impacted by COVID-19 and cash (stimulus) payments to lower-income families. The Legislature is still negotiating a PPP/EIDL conformity bill that would allow businesses to deduct expenses paid with these loans/grants. It is hoped that this bill will be passed by the end of this week.

Governor Newsom proposes $4.5B for Equitable Recovery for California’s Businesses and Jobs in 2021 Budget:

  • Mitigating the SALT deduction limitation for S-corporation shareholders by allowing S corporations to elect to pay a 13.3% state income tax. This would reduce the amount of income passed on to shareholders, who would get a state tax credit equal to 13.3% of their passed-through income. The mechanism would allow the S-Corp to deduct the state tax that would have been paid by the shareholder in effect avoiding the $10K SALT cap.  IRS has issued guidance indicating this is an acceptable approach to avoid the $10K SALT cap imposed on individual taxpayers.
  • COVID-19 Relief Grant Program – The proposal would double the size of the state’s current COVID-19 Relief Grant Program for small businesses, with a plan to add another $575 million to the program. The expansion would bring the total size of the program to $1.1 billion in grants to help small businesses (see #1 above)
  • The second round of funding is expected to launch, though the state has not yet set a date for when the application window will begin.
  • Fee Waivers – The Budget proposes $70.6 million for fee waivers to individuals and businesses most impacted by the pandemic – including barbers, cosmetologists, manicurists, bars and restaurants. These waivers will assist those who have not been able to operate or are operating at reduced capacity during the pandemic.
  • California Jobs Initiative:
    • $430 million for the California Competes Tax Credit
    • $100 million to expand the Main Street Tax Credit (Small Business Hire Credit) to encourage hiring new employees and rehiring former employees
    • $100 million for small business loans and disaster loans through the California Infrastructure and Economic Development Bank’s (IBank)
    • $100 million to expand the sales tax exclusions to reduce the cost of manufacturing equipment in order to promote innovation and meet the state’s climate goals
  • Governor Newsom to Propose $4.5 Billion for Equitable Recovery for California’s Businesses and Jobs in 2021 Budget

California law, AB 685 (COVID-19 notifications) went into effect Jan. 1, 2021 and expires in two years:

  • Imposes new reporting requirements for employers regarding COVID-19 cases. AB 685 requires that employers provide a written notice to all employees and employers of subcontracted employees who were on the premises at the same time as a “qualifying individual” within the “infectious period” that they may have been exposed, as well as information about COVID-19 related benefits available under federal, state, and local laws like workers compensation benefits, COVID-19-related leaves, company sick leave, state-mandated leave, supplemental sick leave and anti-retaliation protections. Further it requires companies to notify their local public health agency of an “outbreak” within 48 hours, defined as at least three probable or confirmed COVID-19 cases within a 14-day period.
  • AB-685 COVID-19: imminent hazard to employees: exposure: notification: serious violations

Governor Newson signed two new laws (SB 1159 and AB 685) impacting cases of COVID-19 in the workplace.

Governor Newsom signed SB 1383, which ensures that California workers affected by COVID-19 can take time to care for themselves or a sick family member and keep their workplaces and communities healthy and safe.

FTB updates FAQs to announce California’s treatment of telecommuting employees for franchise tax nexus purposes:

  • California will not treat an out‐of‐state corporation whose only connection to California is the presence of an employee who is currently teleworking in California due to Executive Order N‐33‐20 (shelter in place order) as being actively engaged in a transaction for the purposes of financial or pecuniary gain or profit.
  • California will not include the compensation attributable to an employee who is currently teleworking due to Executive Order N‐33‐20 in the minimum payroll threshold set forth in California Revenue & Taxation Code section 23101(b)(2)(4).
  • Teleworking and the “Stay at Home” order FAQ

Governor Newsom signed bills to support small businesses:

  • SB 1447 – allows businesses with fewer than 100 employees to claim a credit against their personal and corporate income taxes each taxable year, beginning this year, of $1,000 for each “net increase (FTE) in qualified employees”, up to $100,000. New employees must be hired during July 1 to Nov 30 so a portion of the eligible hiring period has passed. This credit offers a benefit to unprofitable businesses as it can be used to offset sales and use tax liability starting in 2021. To claim the credit taxpayers must register their request with CDTFA. The application period is scheduled to open Dec 1, 2020.
  • AB 1577 – allows small businesses to exclude amounts of PPP loan forgiveness from gross income for state taxes but expenses paid with forgiven amounts are not deductible. This bill was enacted to create conformity with federal law and current IRS guidance.
  • SB 115 – accelerates $561 million in state bond funding to help jumpstart construction projects
  • Governor Newsom Signs Bills to Support Small Businesses Grappling with Impact of COVID-19 Pandemic, Bolster Economic Recovery

Gov. Newsom signed AB 1867 September 10, legislation that immediately extends critical paid sick days protections to California’s workforce.

AB 2257 – Gov. Newsom has signed into law a bill that exempts more occupations from AB 5. The changes in AB 2257 exempt many occupations in media, music and other industries from AB 5’s requirements.

California has a new blueprint for reducing COVID-19 in the state with revised criteria for loosening and tightening restrictions on activities. Find out how businesses and activities can open in your county on August 31:

Covered California has announced another 30-day grace period for small businesses to make premium payments on their employees’ health care plans for the months of April and May:

Workers’ Comp Benefits – Governor Newsom announced an expansion of workers’ comp benefits to workers who contracted COVID-19 since March 19, 2020. Workers can now file a workers’ comp claim under the assumption the virus was caught on the job. Employers can also present evidence against an employee’s claim of infection. This Executive Order is temporary and will expire in 60 days.

California State Treasurer’s Small Business Resource List

The Governor’s Office of Business and Economic Development (GO-Biz) has compiled helpful information for employers, employees, and all Californians relating to COVID-19:

Summary of resources for businesses and employers:

Employment Development Department Strike Team – Gov. Newsom announced a series of actions to better serve workers that have experienced job loss during the COVID-19 pandemic, including the formation of an Employment Development Department (EDD) strike team, and a renewed focus on processing unpaid claims.

OnwardCA – the one-stop resource for the people of California impacted by job loss during the COVID-19 Pandemic:

California insurance commissioner orders premium refunds, credits, and reductions for policyholders impacted by the pandemic:

Governor Newsom signed an executive order that temporarily broadens the capability of counties to enroll persons into the California Work Opportunity and Responsibility to Kids (CalWORKs) program using various eligibility verification methods due to social distancing requirements.

Governor Newsom Launches California Connected – California’s Contact Tracing Program and Public Awareness Campaign:


CA Childcare Providers

Governor Newsom announces website to help parents locate available childcare providers:


The Employer Playbook – Governor Newsom announced new support for California’s workforce, including preventative measures, employer education and long-lasting worker. The Employer Playbook provides guidance for employers to support a safe, clean environment for workers and customers.


Golden State Stimulus

Updated May 11, 2021 – Governor Newsom announced he will expand the state’s economic stimulus program to middle income families, which means the Golden State Stimulus now provides at least $600 to two-thirds of Californians.

Governor Newsom Announces Golden State Stimulus – Golden State Stimulus $600 rapid cash support will go to recipients of the state’s Earned Income Tax Credit in 2019, as well as those filing with Individual Taxpayer Identification Numbers this year who meet the eligibility criteria.

  • Governor Newsom also proposes extending the state’s eviction moratorium and expediting distribution of California’s $2.6 billion share of federal rental assistance to assist low-income tenants
  • Governor Newsom Announces Golden State Stimulus

Up & Running California – Unfortunately the application period for this program has closed

Up & Running California–A New eBay Program Offering Free Ecommerce Training for Small Businesses. Through the program, up to 300 California small businesses will be selected to participate in this six-week interactive e-commerce training program designed to help them get and grow online.


The California Work Sharing Program – As more businesses begin to open and rehire staff, they may not return to full staffing levels. The California Work Sharing Program can benefit both employers and employees. Employers can participate in the Work Sharing Program so employees with reduced wages can receive partial unemployment benefits.

Impacted employees can qualify for disability or unemployment.

Employers can apply for 60-day deferral of payroll tax deposits.


Unemployment Insurance

Since the $10,200 UI exclusion was enacted by the American Rescue Plan Act, the big question has been how to treat the exclusion in community property states. The IRS has confirmed that the UI benefits are community income that are split equally between the two spouses and each spouse may claim up to the $10,200 exclusion.

Unemployment benefit exclusion for married taxpayers—If a married couple’s combined AGI (calculated without any UI compensation) is below $150,000, then MFJ taxpayers may exclude up to $20,400 of unemployment income even if one of the spouses had less than $10,200 in UI and the other spouse had more than $10,200. That is because California is a community property state and the Tax Court has recognized that UI is treated as community property.

The American Rescue Plan Act granted a $10,200 per taxpayer exclusion for unemployment compensation for tax year 2020:

EDD has enhanced their Form 1099-G website to include what taxpayers should do if they are the victim of unemployment compensation fraud.

Californians impacted by COVID-19 are now starting to see the availability of up to 11 weeks of additional unemployment benefits from two federal programs. The California Employment Development Department (EDD) is automatically re-opening Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Assistance (PEUC) claims for those who had a balance remaining on those claims when the federal CARES Act expired on December 26.

California’s Employment Development Department says it will start paying out the sixth and final week of the Lost Wages Assistance program during the week of October 12.

The EDD started processing payments under the Lost Wage Assistance (LWA) program on Monday, Sept. 7. This extra $300 weekly benefit funded by the federal government will be available for 5 weeks retroactively to July 26 so the maximum benefit will be $1,500:

The President’s Memo on Aug 8th authorized the Lost Wage Assistance program to give unemployed workers an extra $400 weekly benefit. CA has been approved for $4.5 billion of funding to provide workers a $300 benefit. CA will not be providing any portion of the extra $100 benefit that states must fund. It is uncertain when the benefit will be received by workers currently collecting benefits and how long this extra benefit will last (EDD indicated at least 3 weeks).

Unemployment insurance is available for Californians who are business owners, self-employed, independent contractors, have limited work history, and others not usually eligible for regular state UI benefits:


‘Shelter in Place’ Order

Starting June 18, Californians must wear face coverings in common and public indoor spaces and outdoors when distancing is not possible:

Essential Services

The Governor’s statewide order allows specific “Essential Services” to continue to operate. To determine if your business is an “essential service” check the Governor’s list:

On March 31, 2020, Bay Area Health Officers issued an updated ‘stay-at-home’ order with new social distancing protocols for essential services:


Small Business Hiring Tax Credit

In September 2020, California enacted Senate Bill 1447, the Small Business Hiring Tax Credit (SBHTC) to provide financial relief to qualified businesses and encourage hiring and retaining employees. The tax credit is $1,000 per increase in full-time equivalent (FTE) employee up to a maximum credit of $100,000 per employer. Unlike most tax credits, this credit can benefit unprofitable businesses that do not have an income tax liability as the credit can also be applied to offset the payment of sales and use tax deposits.


Sales Tax

The California Department of Tax and Fee Administration (CDTFA) has implemented Governor Newsom’s request for sales tax payment and filing relief:

  • Taxpayers’ returns due between December 1, 2020, and April 30, 2021, for all but the largest taxpayers, will be extended. Taxpayers reporting less than $1 million in tax on a return originally due during this timeframe are not required to seek an extension from CDTFA; relief will be provided automatically.  Additionally, for these taxpayers, interest and penalties will not accrue on return amounts due, provided payments are made and returns are filed within three months of the original due date.
  • Fourth quarter 2020 and first quarter 2021 returns, for all but the largest taxpayers, will be extended and are now due April 30, 2021, and August 02, 2021, respectively. For taxpayers required to make monthly prepayments against their fourth quarter tax and fee obligations, the October prepayment remains due on November 24, 2020. The November prepayment that is normally due on December 24 is now due on March 24, 2021.
  • Annual filers scheduled to file returns in January 2021 or April 2021, the filing deadlines will be extended and are now due April 30, 2021, and July 15, 2021, respectively.
  • Return due dates for taxpayers reporting less than $1 million in tax on their return that file on a monthly basis with an original due date between December 1, 2020, and April 30, 2021, have been extended for three months. Interest and penalties will not accrue provided the returns are filed and amounts due are paid within three months of the original due date. Taxpayers below the $1 million threshold are not required to seek an extension from CDTFA; relief will be provided automatically.  The due date for monthly filers’ October 2020 return remains November 30, 2020.
  • Taxpayers with a liability of $1 million or more must request an extension if they are unable to file and pay by their due date. These requests are evaluated on a case-by-case basis and they will be notified if their extension has been approved or denied.
  • Effective December 1, 2020, small business taxpayers with less than $5 million in taxable annual sales, can take advantage of a 12-month, interest-free, payment plan for up to $50,000 of sales and use tax liability only. All payment plans must be paid in full by April 30, 2022, to qualify for zero interest. Businesses with $5 million or more in annual taxable sales in sectors particularly impacted by operational restrictions due to the pandemic may also apply for this 12-month interest-free payment plan. Please note: This relief only applies to sales and use tax due on returns with original due dates between December 1, 2020 and April 30, 2021. A business that previously took advantage of the 12-month, interest-free payment plan that must be paid in full by July 31, 2021, may also request to participate in this new 12-month interest-free payment plan.
  • Small Business Relief Payment Plans for Sales and Use Tax

On April 2, 2020, Governor Newsom announced small CA businesses (less than $5 million in taxable annual sales) can take one year to gradually remit up to $50,000 in sales tax collections due to the COVID-19 pandemic.

Businesses must file their returns to be eligible. Once filed, businesses can enter into payment plans that spread the tax liability over 12 months, interest-free.

This new relief is in addition to Governor Newsom’s March 30th executive order allowing the California Department of Tax and Fee Administration (CDTFA) to offer a 90-day extension for tax returns and tax payments for all businesses filing a return for less than $1 million in taxes. That means small businesses will have until the end of July to file their first-quarter returns.

Previously, the California Department of Tax and Fee Administration has been given authority to grant extensions for filing of returns and payment of sales taxes.


California Rebuilding Fund Loan Program

Santa Clara County Launches Loan Program for Small Businesses – a low-interest loan program of up to $100,000 now available for qualifying establishments.

  • Three- or five-year term options with a 4.25 percent interest rates for small businesses with 50 or fewer full-time employees.
  • Qualifying businesses also require revenues of under $2.5 million in 2019 and at least a 25 percent reduction in revenues compared to a prior one-year period
  • California Rebuilding Fund

California Competes Tax Credit

Governor’s Office of Business and Economic Development announce the fiscal year application periods for the California Competes Tax Credit. With fewer taxpayers hiring and expanding, there may be less competition for funding. Application periods:


California COVID Relief Grant program

On February 23rd, Governor Newsom signed into law a comprehensive package providing urgent relief for the small businesses of CA. The package provides an additional $2 billion – a four-fold increase over the $500 million currently being distributed – for grants up to $25,000 for small businesses impacted by the pandemic, and allocates $50 million of this total for non-profit cultural institutions.

  • Round 3 (waitlisted applicants from Rounds 1 and 2): Friday, March 5 through Thursday, March 11, 2021
  • Round 4 (non-profit cultural institutions only): Tuesday, March 16 through Friday, March 26, 2021
  • Round 5: Thursday, March 25 through Wednesday, March 31, 2021
  • Round 6: Wednesday, April 28 at 9:00 AM through Tuesday, May 4 at 5:00 PM.
    • Eligible applicants: current waitlisted small businesses and/or nonprofits not selected in Rounds 1, 2, 3, or 5 and new applicants that meet eligibility criteria.
  • Update California Small Business COVID-19 Relief Grant Program

The California Small Business COVID-19 Relief Grant Program has announced that it will take applications from California small businesses impacted by COVID-19 for grants of between $5,000 and $25,000.

  • Eligible businesses are those with between $1,000 and $2.5 million in annual gross revenues based on their most recently filed tax return, and include sole proprietorships and nonprofits, and have been operating since at least June 1, 2019.
  • Owners of multiple businesses, franchises, locations, etc. will be considered for only one grant and are required to apply for the business with the highest revenue.
  • California Small Business COVID-19 Relief Grant Program

Recorded Webinar to Help Guide Applications to California Relief Grants for Small Businesses. In this webinar available on YouTube, the Small Business Development Center explains the application process, and answers questions from business owners.


California Disaster Relief Loan Guarantee Program 

The Small Business Finance Center partnered with Financial Development Corporations (FDC’s) and Community Development Financial Institutions (CDFIs) to provide loan guarantees for small businesses (less than 750 employees). The program is already in place and businesses can apply immediately:


Local – Bay Area

Bay Area Small Business Resources

Small Business help offered by local companies and the Chamber of Commerce: How Silicon Valley’s small businesses can find help from other companies and chambers of commerce

The Lead Center for the NorCal Small Business Development Center hosts webinars four times per week to share the latest updates on the SBA funding and all the financing programs related to COVID-19. The webinars have Q&A sessions where business owners have the opportunity to directly ask experts questions on various financial relief programs.

Santa Clara County

Santa Clara County Commercial Eviction Moratorium extended through June 30, 2021 – Protected small business tenants have up to 6 months after the moratorium expires or terminates to repay at least 50% of the past-due rent, and up to 12 months after the moratorium expires or terminates to repay in full the past-due rent.

Possible Property Tax Relief for Commercial Landlords – Santa Clara County Assessor’s office presented a webinar last week to discuss reassessment of commercial property that has declined in value due to the pandemic.

Under the new risk reduction order, all businesses and governmental entities in Santa Clara County must submit a revised social distancing protocol using the online webform, available at covid19prepared.org

  • All businesses must complete, submit and implement the revised social distancing protocols by October 28, 2020.
  • Businesses must do so even if they have already completed a social distancing protocol under a prior Health Officer Order. Businesses may not operate after October 28 without first submitting a Revised Social Distancing Protocol.

Santa Clara County Businesses – If one of your employees is sick and is exhibiting symptoms of COVID-19, they must stay home from work and get tested for COVID-19. If an employee tests positive, you are required to report the case within four (4) hours.

On September 1, the Santa Clara City Council approved funding for several programs. After securing funds from the CARES Act fund of $1.59 million and allocating an additional $1.5 million, the Council is now investing a total of $3.1 million in more local relief efforts to support residents and businesses in Santa Clara.

You can now search the County of Santa Clara’s business database to see which businesses are following Social Distancing Protocols.

Santa Clara County will impose fines on businesses and individuals that violate health orders, following the lead of other Bay Area neighbors to enforce mask-wearing, social distancing, and other rules aimed at stopping the spread of coronavirus.

San Jose

City of San Jose to host free BizChatSJ online forum for small business owners: Get tips and answers to questions from experts, and share best practices with other business owners. BizChatSJ sessions are hosted by the City of San Jose every other week, beginning Thursday, April 22, from 3:30 to 5:00 PM.

  • This week’s BizChatSJ topics include the American Rescue Plan (ARP) Restaurant Revitalization grants, California Small Business Relief Grant final round, safe reopening, and anything else that the group wants to discuss.
  • Registration is recommended: BizChatSJ Meeting Registration

San Jose’s Al Fresco dining program, which has allowed restaurants and small businesses to operate outside during COVID-19 restrictions, will be extended until the end of the year.

Access to Capital for Small Businesses in San Jose – Help With Recovery in the Time of COVID:

The City of San Jose Parks, Recreation and Neighborhood Services will provide eligible residents information and resources on affordable and low-cost home internet services, $10 to $20 per month, with the first two months free.

San Jose Al Fresco Expands: New City-owned public space is being made available for business operations — Parks and Plazas, City-owned Parking Lots, and Street Closures.

The San Jose Public Library Offers Hotspot Checkout to Members. This service is available to all SJPL members at select SJPL locations at no cost.

Electricity bill discounts are available for San José Clean Energy Customers impacted by COVID-19:

Notice to San Jose building owners – The annual reporting deadline for the San Jose Energy and Water Building Performance Ordinance (BPO) is coming up quickly.  Due to COVID-19, this year’s deadline was extended until July 1, 2020.  In future years, the deadline will return to May 1.

The City of San Jose has compiled a list of funding sources available to small businesses ranging from disaster loans discussed above to grants to low-interest commercial loans.

The Mayor of San Jose announced the launch of a website to be a central clearinghouse for the community’s response to the economic changes caused by the pandemic.

The city’s Office of Economic Development has set up an email for businesses related information and support:

San Francisco 

Mayor London Breed Announces New $62 Million Relief Plan for Small Businesses – The $62 million plan will provide a combination of grants and very low to zero-interest loans, which will complement and expand existing local, state, and federal initiatives.

  • Proposed Grant Program ($12.4 million): The proposed grant program will provide immediate relief to help stabilize small business operations by offering grants of $5,000 to $20,000, based on the number of employees that each employer had in February 2020.
  • Proposed Loan Program (Up to $50 million): This planned loan program is aimed at supporting businesses by providing working capital, especially to those left out of existing relief programs. This will include businesses that normally generate more than $2.5 million in annual revenue, including many restaurants.
  • Mayor London Breed Announces New $62 Million Relief Plan for Small Businesses

Mayor London Breed’s legislation to provide $5 million in fee and tax waivers and deferrals for San Francisco businesses passed at the Board of Supervisors. The legislation gives businesses additional time to pay certain business taxes and fees, and also fully waives some fees for a subset of small businesses that have been particularly hard-hit by COVID-19, including entertainment and nightlife venues and restaurants.

In March 2020, Mayor Breed extended the deadline for businesses to pay their 2020 Unified License Fee from April 30, 2020 to March 1, 2021. Given the pandemic’s continued impact on businesses, Mayor Breed announced the deferral of the Unified License Fee for 2020 will further extend until October 31, 2021. To provide additional relief and time, the Unified License Fee for 2021 will also be deferred from March 1, 2021 to October 31, 2021.

San Francisco Shared Spaces:

San Francisco Restaurants, gyms, and personal services must post a checklist of their ventilation methods.

Mayor London Breed announced the delivery of over one million surgical masks, 600,000 face shields, and 150,000 bottles of hand sanitizer for distribution to businesses and workers in the city’s most vulnerable communities, including in the Mission, Bayview, and Chinatown.

The San Francisco Office of Economic and Workforce Development (OEWD) is offering virtual info sessions on Tuesdays from 2:00PM-  3:15PM to provide support to businesses impacted by COVID-19 and considering work stoppages, layoffs, or furloughs, and employees experiencing a layoff.

City of Santa Clara

The Santa Clara City Manager recently issued direction to the Community Development Department to allow the outdoor operation of salons and recreational uses in Santa Clara that are in compliance with State and County health safety protocols.


COVID-19 Child Care Project

Eligible private family childcare providers will receive emergency funding to cover staff salaries, rent and other operating expenses that are usually covered by tuition:


Eviction Moratorium 

Santa Clara County Commercial Eviction Moratorium extended through June 30, 2021 – Protected small business tenants have up to 6 months after the moratorium expires or terminates to repay at least 50% of the past-due rent, and up to 12 months after the moratorium expires or terminates to repay in full the past-due rent.

Mayor London Breed authorized a 60-day extension of the San Francisco’s commercial eviction moratorium, from September 30 to November 30, 2020.

San Mateo County Extends Eviction Moratorium for Residential and Commercial Renters Through End Of August:

The city of San Jose Extends Eviction Moratorium to August 31, 2020. The moratorium prevents evictions based on non-payment of rent for residential tenants affected by the COVID-19 pandemic. Affected tenants must pay at least 50% of unpaid rent that accrues during the moratorium within six months of the end of the eviction moratorium, and the remaining 50% must be paid within one year of the end of the moratorium. Landlords may not charge affected tenants any penalties, fees or interest on unpaid rent that accrues during the eviction moratorium.

San Francisco landlords will be permanently barred from evicting tenants if they can’t pay rent due to coronavirus-related issues, like job loss or getting sick from the virus, under legislation passed by the Board of Supervisors Tuesday.

Businesses or residents having difficulty with rent and eviction associated with COVID-19 can connect with the Law Foundation. An attorney can answer questions about the Santa Clara County eviction moratorium, completely free of charge.


Great Plates Delivered Program

The program encourages restaurant recovery, bolsters food distribution efforts, and provides up to 30,000 meals per week to eligible seniors and high-risk vulnerable populations.


Mandatory Emergency Paid Sick Leave Ordinances

April 7, 2020 – San Francisco and San Jose officials approved local mandatory emergency paid sick leave ordinances for essential employees within the city, affected by the coronavirus. The ordinance is aimed at filling gaps created by the Families First Coronavirus Response Act.

Update January 8, 2021 – San Jose extends paid sick leave protections. Under the new emergency ordinance, employees will receive 80 hours of paid sick leave per year and part-time employees can receive leave two-weeks worth of leave. The leave can be used regardless of how long a local employee has worked for a company.

The San Francisco Emergency Paid Leave Ordinance applies to private employers who have 500 or more employees nationally. An “employee” is any person providing labor or services for remuneration who is an employee under California Labor Code Section 2750.3, including part-time and temporary employees who perform work as an employee within the geographic boundaries of the City. Employers that are covered by the FFCRA are not covered by the Ordinance.


Marin County Small Business Loan Fund – Unfortunately the period to receive Loan Inquiry Forms has passed.

The Marin County Small Business Loan Fund will be making 0%-interest loans to small businesses located in Marin County and financially impacted by the COVID-19 pandemic.

  • This program is not on a first-come, first-served basis. Businesses will have until March 15 to submit a Loan Inquiry Form and be included in the program lottery.
  • Marin County Small Business Fund

Grants for Oakland Entrepreneurs

The Alameda County-Oakland Community Action Partnership and Renaissance Entrepreneurship Center are offering relief grants of $1,500 each to 60 qualifying Oakland business owners. Grants will be awarded on a first-come, first-served basis.


Fiserv Back2Business Grant Program – Unfortunately the application period has closed. 

Oakland Businesses–AEO and Fiserv have launched the Fiserv Back2Business Grant Program, which will make grants of up to $10,000 to Black- and minority-owned businesses in Oakland and other select cities across the country to help relieve the impacts of COVID-19.


 San Francisco Hardship and Emergency Loan Program (SF HELP) – Unfortunately the period to receive Loan Inquiry Forms has passed.

Mayor London Breed announced a $3.5 Million expansion of the San Francisco Hardship and Emergency Loan Program (SF HELP). The program will provide zero interest loans of up to $50,000 to approximately 80 small businesses as San Francisco continues on the road to economic recovery.


San Francisco Relief Grant Fund

The San Francisco Relief Grant Fund provides immediate relief to help stabilize small business operations with grants of $5k to $25k based on the business’ number of employees prior to the pandemic. The funds will be split into two programs:

  • The Small Business Storefront Equity program focuses on businesses that have been most impacted by shelter-in-place mandated closures, and those that have not been able to access other local, state, and federal resources, and those serving low-income, historically disinvested neighborhoods: Apply for a small business storefront equity grant
  • The Community Anchor Storefront program focuses on long-running businesses and those that contribute to the culture and vibrancy of San Francisco and its commercial corridors: Apply for a community anchor storefront grant

San Francisco Shared Spaces Permit Holders

There are 2 grants available to Shared Spaces permit holders:

  • SF Shines for Reopening for individual businesses
  • Shared Spaces equity grant for individual business or groups with a Shared Space permit

San Francisco Small Business Recovery Loan

You can apply for both, but individual businesses will not receive more than $5,000 in all from both SF Shines for Reopening and Shared Spaces equity. Sponsors of group-operated Shared Spaces may receive more.

Applications launched July 8, 2021 for zero percent interest loans of up to $100,000 for new and existing San Francisco small businesses.


San Francisco Venue Fund – Unfortunately this grant application has closed. 

San Francisco Venue Fund will provide grants of $10,000 or more to help San Francisco-based live music and entertainment venues stay in business. NOTE: This fund is distinct from the SBA Shuttered Venue Operators Grant (SVO Grant) program.


Yerba Buena Community Benefit District (YBCBD) has established a Small Business Support Fund

The Yerba Buena Community Benefit District (YBCBD) has established a Small Business Support Fund to provide grants of up to $2,500 to small, ground-level, storefront businesses in the Yerba Buena neighborhood of San Francisco. Grants will be awarded on a first-come, first-served basis until all funds are expended.


San Jose Construction Projects

San Jose Contractors and subcontractors are required to comply with the December 16, 2020 Revised Santa Clara County Mandatory Directive for Construction Projects. Under the directive, contractors/subcontractors are responsible for submitting a jobsite-specific social distancing protocol; providing personal protective equipment; reporting COVID-19 positive cases and complying with contact-tracing efforts; designating and supporting the work of a jobsite-specific COVID-19 supervisor; and more.


San Jose Small Business Rent Relief Grant

The City of San Jose has set aside $3.8M of its federal Coronavirus Relief Funds to provide grants of up to $15,000 to small businesses located in San Jose to cover the business owner’s unpaid or pending rent from March 1, 2020 through December 30, 2020:


San Mateo County Restaurant, Brewery, and Winery Relief Program

San Mateo County Restaurant, Brewery, and Winery Relief Program is now accepting applications. The Relief Program will provide grants of up to $10,000 each to qualifying establishments to ensure continued operation and assist in covering current business operating expenses, including, for example: rent, payroll, and facility modifications needed to accommodate on-site indoor and outdoor dining.


Santa Clara County Financial Assistance Program – Sacred Heart Community Service

Additional funding is now available through the COVID-19 Financial Assistance Program administered by Sacred Heart Community Service. This round will focus on serving those in the community who are most in need of assistance.


Santa Clara Energy Efficiency Grant Program

To help Santa Clara small businesses and nonprofits affected by COVID-19, Silicon Valley Power is offering grants to help fund energy efficiency upgrades. These upgrades will help lower business operating costs by reducing electric consumption.


Santa Clara Small Business Assistance Grant Program

The City of Santa Clara has committed up to $1.1 million in one-time funds to offer immediate financial assistance to nonprofits and small businesses in the City of Santa Clara to aid in maintaining their business and workforce. Awards will be made on a first-come, first-served basis.

  • For a $10,000 grant award, applicants must have at least one and no more than 25 full-time employees that has been deemed non-essential.
  • For a $5,000 grant award, applicants must have at least one and no more than 25 full-time employees that has been deemed essential.
  • City of Santa Clara Small Business Assistance Grant Program

Small Business Relief Fund

The Small Business Relief Fund, hosted by the Silicon Valley Community Foundation, provides technical assistance as well as loan and grant funding to provide relief and/or liquidity for self-employed individuals and small businesses.


Working Solutions Special Recovery Loans

Working Solutions Special Recovery Loans, for start-ups & existing businesses in all nine San Francisco Bay Area counties – 5% fixed interest rate; Waived application fee; Reduced closing fee; Interest-only during the first 12 months (principal deferred); 5-year term; No prepayment penalties


Other States

Victims of this month’s winter storms in Texas will have until June 15, 2021, to file various individual and business tax returns and make tax payments, the IRS announced today:

States’ rolling conformity to the Code and CARES Act – Further analysis must be undertaken in some rolling conformity states, such as Colorado, Maryland, and Oregon, to determine whether and to what extent specific CARES Act provisions are in fact adopted on a rolling basis.

Many states have provided one additional month of filing relief for corporate tax returns beyond the federal Oct. 15 deadline:

  • Five states (Delaware, Kansas, Maine, New Jersey, and Vermont) provided automatic one additional month of filing relief for corporate extended state tax returns filed by Nov. 16, 2020.
  • Eleven states (Alabama, Georgia, Idaho, Mississippi, Missouri, Nebraska, North Carolina, Rhode Island, Tennessee, Utah, and West Virginia) responded that they would consider granting relief on a case-by-case basis for corporate extended state tax returns filed by Nov. 16, 2020, if the taxpayer requests in writing abatement of late-filing penalties due to reasonable cause.
  • Journal of Accountancy – Several states provide one-month filing relief for corporate deadlines

Victims of Hurricane Sally that began on September 14 now have until January 15, 2021, to file various individual and business tax returns and make tax payments:

Victims of the Oregon wildfires and straight-line winds that began on September 7 now have until January 15, 2021 to file various individual and business tax returns and make tax payments.

Victims of the April tornadoes, severe storms and flooding that took place in parts of Mississippi, Tennessee and South Carolina will have until October 15, 2020, to file various individual and business tax returns and make tax payments.

Other states have enacted various measures to delay tax filing and payments beyond April 15th.


Accounting & Advisory Updates

The due date for certain single audits to be submitted to the Federal Audit Clearinghouse has been delayed six months as a result of challenges related to the coronavirus pandemic. The memorandum states that awarding agencies should allow recipients and sub-recipients with fiscal year ends through June 30, 2021, that have not yet filed their single audits with the Federal Audit Clearinghouse to delay the completion and submission of the single audit reporting package to six months beyond the normal due date.

FASB responded to an urgent pandemic-related accounting concern by voting to provide private companies and not-for-profits with an alternative to the requirement to monitor and evaluate goodwill impairment triggering events throughout the fiscal year and potentially measure a goodwill impairment at the date of triggering events.

5 accounting considerations for divestitures and carveouts:

The Office of Management and Budget issued new guidance for Single Program Audits of various COVID-19 relief programs:

Financial fraud risks to watch for amid the pandemic:

Forecasting and impairment tips for an unprecedented time:

FASB proposes goodwill evaluation relief for some private companies, NFPs – evaluating triggering events in interim financials

Assessing audit risks during the pandemic:

Tips for auditing in a COVID-19 environment

Tips for single audits amid pandemic uncertainty:

Provider Relief Fund payments are required to be included in the federal funding that determines whether nonfederal entities meet the $750,000 threshold for single audit requirements and whether for-profit entities are required to meet audit requirements:

To assist preparers and auditors, the AICPA has published nonauthoritative guidance with answers to FAQs for state and local government financial statement accounting and auditing matters related to the COVID-19 pandemic.

FASB issued a proposal July 9, 2020 that would delay the effective date of the board’s new standard on long-duration insurance contracts by one year in an effort to provide relief to insurance companies affected by COVID-19.

FASB issued a staff Q&A document to clarify how to apply the U.S. GAAP Financial Reporting Taxonomy to disclosures related to the effects of the coronavirus pandemic and relief efforts.

The AICPA Peer Review Board has granted CPA firms with original due dates between Jan. 1 and Sept. 30, a six-month peer review deadline delay option to provide them with relief during the coronavirus pandemic…now what?

A nongovernmental entity may account for a Paycheck Protection Program (PPP) loan as a financial liability in accordance with FASB ASC Topic 470, Debt, or under other models, if certain conditions are met

FASB approved a pair of new accounting standards for convertible instruments and nonprofit gifts-in-kind, while also voting to defer the effective date of its long-duration insurance standard:

FASB issued an Accounting Standards Update that grants a one-year effective date delay for certain companies and organizations applying the revenue recognition and leases guidance. Early application continues to be permitted.

4 key COVID-19 audit risks for 2020 year ends:

COVID-19 Pandemic alters lease accounting landscape:

Hedge accounting may be more beneficial after FASB’s changes:

FASB delays revenue recognition effective date for private companies and nonprofits:

Tips for audit committees during the pandemic:

The effective dates of GASB Statement No. 87, Leases, and Implementation Guide No. 2019-3, Leases, have been postponed by 18 months:

CPA firms will be granted six-month extensions for peer reviews, corrective actions, and implementation plans with original due dates between Jan. 1 and Sept. 30 of this year:

The SBA has concluded that PPP Loans issued to nonprofits do not represent federal financial assistance. Therefore, these loans will not be subject to Single Audit requirements. However, loans issued under the EIDL program will be considered as federal financial assistance and are required on the SEFA.

The effective dates of three AICPA ethics interpretations will be extended by one year:

The AICPA made a broad range of legislative recommendations to encourage economic recovery in the wake of the COVID-19 pandemic.

The AICPA Auditing Standards Board formally extended the effective dates of seven new auditing standards, SAS Nos. 134–140 by one year:


Please contact us here at ASL if you have any questions or concerns.