COVID-19 and Tax Changes

New Developments – 10/21/20

FHFA announced that Fannie Mae and Freddie Mac (the Enterprises) will extend several loan origination flexibilities until November 30, 2020.

COVID-19 Lessons for Nonprofits Podcast:

Employment Development Department – Updated Top Unemployment Insurance FAQs of the Week (updated Oct. 16).

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:

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.

Now that San Francisco is assigned to the State’s Yellow tier, the City will move forward on reopening offices and expanding capacity at business, including fitness, dining, places of worship, personal services, recreation, and more

The Contra Costa County Micro-Enterprise Relief Fund to make grants of $1,000 to $10,000 to micro-businesses impacted by COVID-19. Eligible businesses are for-profit entities with a maximum of 5 employees and less than $250,000 in annual revenue that are operating in Contra Costa County cities (with the exception of Walnut Creek, Concord, Pittsburg, and Antioch, which are not covered by the Contra Costa CDBG service area).

Tips for single audits amid pandemic uncertainty:


New Developments – 10/13/20

FAQs on PPP Loan Forgiveness Updated October 13, 2020: The PPP loan forgiveness application forms (3508, 3508EZ, and 3508S) display an expiration date of 10/31/2020 in the upper-right corner, but this does not mean October 31, 2020 is the deadline for borrowers to apply for forgiveness. Borrowers may submit a loan forgiveness application any time before the maturity date of the loan, which is either two or five years from loan origination. However, if a borrower does not apply for loan forgiveness within 10 months after the last day of the borrower’s loan forgiveness covered period, loan payments are no longer deferred and the borrower must begin making payments on the loan. Note—these loan terms apply even if the original note signed by the borrower contain different terms that were applicable when the note was signed.

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

The deadline to register for an Economic Impact Payment using the Non-Filers tool is extended to November 21, 2020.

The California Department of Public Health (CDPH) released new guidance Friday that now allows private gatherings to include up to three households. The guidance states the gatherings must take place outdoors and keeping the gathering smaller as it lowers the risk of contracting COVID-19.

As of October 13, 2020, Santa Clara County announced the County is in the Orange Tier (Tier 3) of the State’s COVID-19 framework. This means the County Risk Reduction Order will go into effect on October 14, 2020.

  • Orange Tier under the revised County order would allow indoor dining and indoor gatherings to resume locally, but with the Red Tier’s limitations of 25% capacity or 100 people, whichever is fewer.
  • Indoor gatherings will be allowed including social, religious, political, ceremonial, athletic, and other types of gatherings under the Orange Tier.
  • Santa Clara County announced the County is in the Orange Tier

San Francisco announces plan to expand elements of the Shared Spaces program beyond the pandemic, support businesses with grants to support reopening, delay impact fees, initiate a basic income program for arts:

The Oakland CARES Act Home-Based Business Grant Program is making grants of $2,000 to $4,000 to home-based, for-profit small businesses in Oakland that have been negatively impacted by COVID-19.


New Developments – 10/9/20

PPP Update – The SBA issued a new PPP Forgiveness Application Form 3508S and 3508S Instructions for those small businesses that secured a PPP loan of $50,000 or less. The most significant benefit of the new form is that employee reductions and salary reductions are no longer penalized. Additionally, the new form does not require submitting mathematical calculations on how the funds were spent, but it still requires the borrower to submit to the lender evidence (bank statements, invoices, etc) that the funds were properly spent. Interestingly, the SBA also reduced the lender’s responsibility to “verify” the evidence submitted.

  • Because the maximum PPP loan amount is $50,000, this new loan forgiveness application will be most beneficial to self-employed,  gig workers and businesses with just a few employees. There are approximately 3.57 million outstanding PPP loans of $50,000 or less, totaling approximately $62 billion of the $525 billion in PPP loans.
  • There is still a possibility that the SBA/Congress may authorize a streamline forgiveness process for loans over $50K and under $150K.
  • SBA just recently began approving PPP forgiveness applications and remitting forgiveness amounts to lenders last week on October 2, 2020.
  • New PPP Loan Forgiveness Application Form 3508S
  • New PPP Loan Forgiveness INSTRUCTIONS for Form 3508S​​​​​
  • New IFR for Loan Forgiveness of Small Loans

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.

Employment Development Department – Updated Top Unemployment Insurance FAQs of the Week (updated Oct. 9).

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


New Developments – 10/8/20

PPP Update – The SBA released guidance Wednesday clarifying that lenders must recognize the previously established extended deferral period for payments on the principal, interest, and fees on all PPP loans, even if the executed promissory note indicates only a six-month deferral.

The Employment Development Department (EDD) on Tuesday announced the successful installation of a new ID.me identity verification tool that is helping speed the processing of new claims.

Californians impacted by wildfires that started in August, in several California counties, now have an extended deadline of November 30, 2020, to file for federal Disaster Unemployment Assistance (DUA).

Nonprofit Grant – The City of San Jose Emergency Operations Center (EOC) is releasing a grant application for nonprofit organizations that serve San Jose communities negatively impacted by COVID-19. Awards to organizations will range from $5,000 to $150,000.


New Developments – 10/6/20

New guidance issued by the SBA describes the procedures required for changes of ownership of an entity that has received Paycheck Protection Program funds.

The IRS is giving individuals who do not normally file a tax return and have not received an economic impact payment an additional five weeks to enter their information on the Non-Filer: Enter Payment Info Here tool on the IRS website.

The Employment Development Department is set to begin accepting new claims after a two-week pause.


New Developments – 10/2/20

New Developments – 9/30/20

New Developments – 9/28/20

New Developments – 9/24/20


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

Bay Area Economic Relief

Business Loan Modifications

Business Valuations

California Economic Relief

CARES Act

Community Advantage (CA) Recovery Loans

Crowdfunding

Economic Stimulus Payments

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 9/22/20

Student Loans


Federal

CARES Act 

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:

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 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.

The IRS released a FAQ for retirement plan changes included in CARES Act. New Form 8915-E will be released to be used to calculate the taxable portion of eligible “coronavirus related distributions”. Distributions up to $100K can be taken in 2020 and are taxable ratably over three years. Amounts can be rolled over within the 3-year period. If previously taxed amounts are later rolled over, amended returns will be required.

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

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

Employers obtaining a Payroll Protection Loan are not eligible for this credit

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

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, 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.

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

Artist Relief is an emergency initiative organized to distribute grants of $5,000 to artists facing dire financial emergencies due to COVID-19.


Business for All

Hello Alice is offering $10,000 grants being distributed on a rolling basis.

Small businesses can apply for grants up to $50,000 to support business growth including $10,000 emergency COVID-19 Business for All Grants to help small businesses in crisis.

  • General Business for All Grant applications are due November 10, 2020, at 12:00 AM PT
  • Additional info and application: Business for All

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:


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 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.


Save Small Business Fund – Unfortunately, due to overwhelming interest, the grant program has reached its capacity and is not accepting new applicants at this time.

A grantmaking initiative offering short-term relief for small employers in the United States. Funded by corporate and philanthropic partners, the Save Small Business Fund is a collective effort to provide $5,000 grants to as many small employers as they can.


Economic Stimulus Payments

The deadline to register for an Economic Impact Payment using the Non-Filers tool is extended to November 21, 2020.

Later this month (September), the IRS will start mailing letters to roughly nine million Americans who typically don’t file federal income tax returns who may be eligible for, but have not registered to claim, an Economic Impact Payment.

The IRS has reopened the registration period for individuals who receive Social Security, Supplemental Security Income, Railroad Retirement or veteran’s benefits, but didn’t receive $500 per child earlier this year when they received their own Economic Impact Payment.

The IRS will soon send catch-up Economic Impact Payment checks to about 50,000 individuals whose portion of the EIP was diverted to pay their spouse’s past-due child support.

Economic Impact Payment Updates as of Aug. 11, 2020:

  • The IRS will continue to process 2019 tax returns and issue payments to individuals who have not already received a payment and have not already been determined to be ineligible based on their 2018 tax returns.
  • If the IRS has determined that a taxpayer was not eligible for a payment based on the taxpayer’s 2018 tax return, and then the taxpayer files a 2019 tax return that shows eligibility, the IRS will not issue a payment in 2020 based on the 2019 tax return.
  • If the IRS used an individual’s 2018 tax return to determine the amount of the individual’s payment, and the individual later files a 2019 tax return that indicates the individual is eligible for a higher amount, the IRS will not issue an additional payment for the difference.
  • IRS Economic Impact Payment Information Center

People who aren’t required to file a U.S. tax return have until Oct. 15 to alert the IRS if they haven’t yet received a $1,200 stimulus payment:

IRS sent $1.4 billion in stimulus checks to deceased individuals (which accounts for 1.1 million economic stimulus payments). An EIP made to someone who died before receipt of the EIP should be returned to the IRS. If a taxpayer cannot deposit the EIP because it was issued to both spouses and one spouse is deceased, the taxpayer should return the check, and once the IRS receives and processes the returned payment, an EIP will be reissued to the living spouse.

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.

Individuals receiving Social Security retirement or disability benefits, or Railroad Retirement benefits, are not required to use this new tool to receive payments. The IRS will rely on Form SSA-1099 and Form RRB-1099 for purposes of determining the amount of the payment. However, if these individuals have dependents, and have not filed a return for 2018 or 2019, they should visit the website; otherwise, their payment will only be issued for the $1,200 for the recipient and not their spouse or any of their dependents.

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 home 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

COVID-19 Lessons for Nonprofits Podcast:

The Oakland CARES Nonprofit Grant Program is making unrestricted grants of up to $25,000 to Oakland-based nonprofits that have suffered negative economic impacts due to COVID-19.

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

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

Some tax practitioners have expressed concern that they will not be able to meet the Sept. 15 deadlines for a variety of reasons related to COVID-19. The AICPA understands that the IRS is willing to work with taxpayers who need relief. Practitioners that have made a good-faith effort to meet the filing deadlines on behalf of their clients, but are unable to do so due to COVID-19, should write “COVID-19” in an attachment to the return briefly describing the reason they cannot meet the deadlines, or, if possible, should write “COVID-19” at the top of the tax return to indicate the need for penalty relief.

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

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

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)

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

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

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

FHFA announced that Fannie Mae and Freddie Mac (the Enterprises) will extend several loan origination flexibilities until November 30, 2020.

The FHFA announced that Fannie Mae and Freddie Mac will extend buying qualified loans in forbearance and several loan origination flexibilities until September 30, 2020.

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 (the Enterprises) will extend several loan origination flexibilities until August 31, 2020, to ensure continued support for borrowers during the COVID-19 pandemic.

FHFA approved an extension of the temporary policy that allows for the purchase of certain single-family mortgages in forbearance that meet specific eligibility criteria set by Fannie Mae and Freddie Mac The policy is extended for loans originated through August 31, 2020.

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.

FHFA extends foreclosure and eviction moratorium to enterprise-backed, single-family mortgages until at least August 31, 2020 (the current moratorium was set to expire on June 30, 2020):

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 

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 

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

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

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 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.


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

California’s Employment Development Department says it will start paying out the sixth and final week of the Lost Wages Assistance program next week (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:

California is participating in the Lost Wages Assistance (LWA) program, This will provide an additional $300 per week if your weekly benefit amount was at least $100 per week between July 26 and August 15, even if you received less because you reported wages.

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:


Returning California to Work COVID-19 Safety Protocol Fund

State Fund policyholders in a non-essential business that recently re-opened or are planning to resume operations, may be eligible for a grant to help with safety-related expenses.


‘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:


Sales 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.


The PowerUp Fund

The PowerUp Fund will be making grants of $5,000 to eligible Latinx-owned small businesses in California, Texas, and New York. Grants will be paired with coaching support and resources to help recipients overcome the COVID-19 economic downturn and continue to grow.


California Competes Tax Credit

Governor’s Office of Business and Economic Development announce the fiscal year application periods for the California Competes Tax Credit. Next period opens July 27 – Aug 17 with $80 million of credits available. With fewer taxpayers hiring and expanding, there may be less competition for funding.


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 

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.

As of October 13, 2020, Santa Clara County announced the County is in the Orange Tier (Tier 3) of the State’s COVID-19 framework. This means the County Risk Reduction Order will go into effect on October 14, 2020.

  • Orange Tier under the revised County order would allow indoor dining and indoor gatherings to resume locally, but with the Red Tier’s limitations of 25% capacity or 100 people, whichever is fewer.
  • Indoor gatherings will be allowed including social, religious, political, ceremonial, athletic, and other types of gatherings under the Orange Tier.
  • Santa Clara County announced the County is in the Orange Tier

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

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 City of San Jose offers a Business Tax Amnesty Program to individuals and entities that have never registered their business, are behind on paying their business tax, or have underreported their employee counts, square footage, or number of rental properties. The period to apply for Amnesty runs through September 30, 2020.

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 

Now that San Francisco is assigned to the State’s Yellow tier, the City will move forward on reopening offices and expanding capacity at business, including fitness, dining, places of worship, personal services, recreation, and more

San Francisco announces plan to expand elements of the Shared Spaces program beyond the pandemic, support businesses with grants to support reopening, delay impact fees, initiate a basic income program for arts:

Mayor London Breed announced a new temporary permit program to ensure safer outdoor entertainment and amplified sound activity as a part of San Francisco’s gradual reopening. The new JAM or “Just Add Music” permit will help businesses, organizations, and individuals hold responsible entertainment activity at Shared Spaces and other outdoor locations.

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.

Mayor London Breed announced the next steps in San Francisco’s reopening of businesses and activities.

Mayor London Breed Announces Shared Spaces Program to Support Neighborhood Activity and Local Businesses:

  • The program will allow individual businesses or local merchant associations to apply for a no-cost, expedited permit to share the sidewalk or parking lane for business purposes.
  • Shared Spaces Program: Use the sidewalk or parking lane for your business

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 

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

Santa Clara County has extended an eviction moratorium on commercial tenants through August 31, 2020, though it may be extended by the County Board of Supervisors.

The Santa Clara County Board of Supervisors voted to extend the urgency ordinance establishing a temporary moratorium on evictions. In line with an updated Executive Order issued by Governor Gavin Newsom, the urgency ordinance has been extended to July 28.

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.

Santa Clara County has extended a moratorium on small-business evictions through July 28, 2020. Landlords cannot evict tenants for nonpayment of rent, if the tenant can prove they were financially harmed by the COVID-19 pandemic. The moratorium applies to both residential and commercial tenants.

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.

The San Jose Emergency Paid Leave Ordinance applies to employers with more than 500 and less than 50 employees. However, the benefit is only available for employees who leave their residence to perform essential work, and who have worked at least two hours within the geographic boundaries of the City of San Jose.

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.


Regional Nonprofit Emergency Fund – As of July 2020, applicants will be waitlisted due to a low availability of funds.

To streamline grant making and simplify the application process for Santa Clara County nonprofits, Silicon Valley Strong is partnering with Silicon Valley Community Foundation’s Regional Nonprofit Emergency Fund to fund grants to nonprofit organizations serving one or more of the 10 counties.


Oakland CARES Act Home-Based Business Grant Program

The Oakland CARES Act Home-Based Business Grant Program is making grants of $2,000 to $4,000 to home-based, for-profit small businesses in Oakland that have been negatively impacted by COVID-19.


Oakland CARES Act Small Business Grant Program

The City of Oakland CARES Act Small Business Grant Program is making grants of $10,000 to brick-and-mortar businesses located in Oakland that have been adversely impacted by COVID-19.


Oakland CARES Fund for Artists and Arts Nonprofits

The Oakland CARES Fund for Artists and Arts Nonprofits is making grants of up to $3,000 for individual artists and grants of up to $20,000 for small arts nonprofits (based on budget size)


Oakland CARES Nonprofit Grant Program

The Oakland CARES Nonprofit Grant Program is making unrestricted grants of up to $25,000 to Oakland-based nonprofits that have suffered negative economic impacts due to COVID-19.


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 Community Development Block Grant (CDBG) Microenterprise Grant Program

San Jose Community Development Block Grant (CDBG) Microenterprise Grant Program, administered by Opportunity Fund, will make grants of $15,000 to eligible small businesses physically located in the City of San Jose. Applications are due by Friday, August 28 at 5:00 PM


San Jose Nonprofit Grant Program

The City of San Jose Emergency Operations Center (EOC) is releasing a grant application for nonprofit organizations that serve San Jose communities negatively impacted by COVID-19. Awards to organizations will range from $5,000 to $150,000.


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:


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.


Sonoma County Small Business Stabilization Grant – Unfortunately, the application window is now closed.

Sonoma County Small Business Stabilization Grant Program to provide grants of $2,500 to $15,000 to local small businesses.


TMC Small Business, Big Heart Grant Program

The TMC Small Business, Big Heart Grant Program is making grants to small businesses with a physical location in Oakland, San Francisco, and Los Angeles. Community members can nominate a small business for a grant by sharing on TMC’s Facebook or LinkedIn page why they matter to the community and adding #TMCSmallBizBigHeart. Nominated business owners will be entered into a lottery for grants of up to $10,000.


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


Alameda County Business Adaptation Grants

Alameda County is making COVID-19 Business Adaptation Grants to small business owners in unincorporated areas of the county. Grants of up to $5,000 are available to support necessary business adaptations related to new COVID-19 requirements:


Other States

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

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.