The SBA has awarded more than $7.5 billion in Shuttered Venue Operator Grants (SVOGs) to about 10,000 live entertainment venues, small businesses, and not-for-profits, the agency announced. With requests for only $12 billion of the $16.25 billion in SVOG funding submitted, the SBA is providing opportunities for applicants to appeal grant denials, request award reconsiderations, and seek supplemental funding. The period to appeal rejected applications will run from Aug. 2–16, while entities that received less funding than they anticipated can apply for reconsideration of their grant amount Aug. 4–18.
PPP Update–In a notice sent July 9 to lenders, the SBA said it would no longer request either version of the Loan Necessity Questionnaire: SBA Form 3509 for for-profit borrowers and SBA Form 3510 for not-for-profit borrowers.
Restaurant Revitalization Fund recipients revealed:
Monthly Child Tax Credit payments began July 15 – Under the American Rescue Plan, each payment is up to $300 per month for each child under age 6 and up to $250 per month for each child ages 6 through 17. Normally, anyone who receives a payment this month will also receive a payment each month for the rest of 2021 unless they unenroll.
The IRS announced it will issue another round of refunds to nearly 4 million taxpayers who overpaid their taxes on unemployment compensation received last year.
The FHFA announced that Fannie Mae and Freddie Mac will eliminate the Adverse Market Refinance Fee for loan deliveries effective August 1, 2021.
SBA officially closes Restaurant Revitalization Fund after awarding the program’s full $28.6 billion appropriation to more than 100,000 restaurants, bars, and other businesses that provide on-site food and drink.
The IRS posted answers to questions that certain transportation companies may have regarding Treasury grants and related taxes.
- IRS provides answers for certain transportation companies eligible for Treasury grants
- Coronavirus Economic Relief for Transportation Services (CERTS) Frequently Asked Questions
Certain businesses that received a first-draw PPP loan and did not deduct on their 2020 tax return expenses that resulted (or were expected at the end of the 2020 tax year to result) in the loan’s forgiveness may deduct the expenses on their 2021 tax return under a safe harbor.
The IRS issued adjusted amounts for the child tax credit, the earned income tax credit (EITC), and the premium tax credit (PTC) for 2021 to reflect changes enacted in the American Rescue Plan Act of 2021:
Applications launched July 8, 2021 for zero percent interest loans of up to $100,000 for new and existing San Francisco small businesses.
SBA may be dropping PPP Loan Necessity Questionnaire requirement when applying for forgiveness on loans of $2 million or more:
The IRS extended the tax relief provided in Notice 2020-46 for calendar year 2021 for employers whose employees forgo sick, vacation or personal leave because of the COVID-19 pandemic.
- IRS extends tax relief for employer leave-based donation programs that aid victims of the COVID-19 pandemic
Employers who are filing Form 7200, Advance Payment of Employer Credits Due to COVID-19 should read the instructions carefully and take their time when completing this form to avoid mistakes.
Supreme Court declines to take up remote worker taxation case involving Massachusetts’s taxation of remote workers during the COVID-19 pandemic. This decision has significant implications for employees that left their “normal” work locations during the pandemic. Massachusetts can continue to tax workers while actually working outside the state.
California budget deal reached – Major tax-related items are included. The provisions are contained in draft legislation (AB 150 and AB 151) that has not yet been enacted, although it is anticipated that these bills will be passed within the next week or two.
- An elective passthrough entity tax (at 9.30%), which provides a work-around to the $10,000 SALT deduction limitation for owners of passthrough entities as the entity will pay and deduct the tax and the passthrough owner will get a California tax credit for the amount so paid
- An extension of the small business Main Street Hiring Credit
- A second round of Golden State Stimulus payments of up to $1,100 for taxpayers with AGI of $75,000 or less
- Increased funding for the California Competes Credit, and enactment of a new California Competes Grant Program
- Additional California Relief Grants for microbusinesses and nonprofit cultural institutions.
- California budget deal reached: More stimulus payments and tax relief
The EDD will begin inviting potentially eligible Californians to apply for the federal Mixed Earner Unemployment Compensation (MEUC) program starting June 30, 2021. The federal program pays an extra $100 per week in supplemental unemployment benefits to those who earned both regular wages and more than $5,000 in self-employment wages.
Governor Newsom signed legislation to extend the state’s eviction moratorium through September 30, 2021 and clear rent debt for low-income Californians that have suffered economic hardship due to the pandemic.
- Governor Newsom Signs Nation-Leading Rent Relief Program for Low-Income Tenants, Eviction Moratorium Extension & Additional Legislation
For small business tenants who qualify for protection under the Santa Clara County’s ordinance, the County’s eviction moratorium has been extended through August 18, 2021. Small business tenants have up to 6 months after the moratorium expires or terminates to repay at least 50% of the past-due rent, and up to 12 months after the moratorium expires or terminates to repay in full the past-due rent.
The IRS posted two sets of FAQs, explaining changes to various credits made by the American Rescue Plan Act:
- New FAQs available to aid families and small business under the American Rescue Plan
- New Child and Dependent Care Tax Credit FAQs
- Discusses changes made by ARPA that increased the maximum amount of work-related expenses for qualifying care that may be taken into account in calculating the Sec. 21 child and dependent care credit, increased the maximum percentage of those expenses for which the credit may be taken, modified how the credit is reduced for higher earners, and made it refundable for 2021.
- Tax Credits for Paid Leave Under the American Rescue Plan Act of 2021 for Leave After March 31, 2021 FAQs
- Addresses ways that ARPA amended and extended paid sick and family leave tax credits. ARPA also provided that leave wages paid to an employee who is seeking or awaiting the results of a test for, or diagnosis of, COVID-19, or is obtaining immunizations related to COVID-19 or recovering from immunization, are leave wages that can be eligible for the credits.
As California Fully Reopens, Governor Newsom Announces Plans to Lift Pandemic Executive Orders
The IRS released a draft revised 2021 version of Form 941, Employer’s Quarterly Federal Tax Return, reflecting further new and updated payroll tax credits. The current official version was released less than three months earlier on March 9, and the impending further changes reflect Congress’s multiple provisions of temporary payroll tax relief to aid businesses’ operations during the lingering effects of the COVID-19 pandemic.
Looking ahead: How the American Rescue Plan affects 2021 taxes:
- Part 1: Child and dependent care credit increased for 2021 only; Workers can set aside more in a dependent care FSA; Childless EITC expanded for 2021
- Part 2: Changes expanding EITC for 2021 and beyond; Expanded child tax credit for 2021 only; Advance child tax credit payments
Shuttered Venue Operator Grants totaling $54.2 million had been awarded to 50 recipients through midday Thursday, the U.S. Small Business Administration (SBA) reported.
The IRS is sending more than 2.8 million refunds this week to taxpayers who paid taxes on unemployment compensation that new legislation now excludes as income.
- IRS sending more than 2.8 million refunds to those who already paid taxes on 2020 unemployment compensation
The Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac will continue to offer COVID-19 forbearance to qualifying multifamily property owners through September 30, 2021, subject to the continued tenant protections FHFA has imposed during the pandemic. This is the third extension of the programs, which were set to expire June 30, 2021.
Governor Newsom Launches California Restaurant Comeback, including expanded outdoor dining in areas such as sidewalks and parking lots:
- Governor Newsom Launches California Restaurant Comeback to Support Restaurants and Bars as State Fully and Safely Reopens
The Commercial Eviction Moratorium is expected to expire in Santa Clara County on June 30. The City of San Jose and other organizations are holding webinars at different times over the coming weeks to help business owners understand what this means for their business and what they can do to prepare.
- OED Small Business Webinar Series, Eviction Moratorium ending 6/30/21 – Are you ready?: Thursday, June 10, at 7 p.m.: Register here
SF New Deal has launched a micro grant program to give grants of $2,500 to 400 small businesses in San Francisco. This grant program is open to all small businesses, including newly opened businesses.
- Applications are due by Wednesday, June 30, 2021: SF New Deal Small Business Debt Relief Grant Program
Restaurant Revitalization Fund stopped accepting applications Monday, May 24 at 5:00 PM. It remained open only to the smallest providers (2019 revenue under $50K) of on-site food and drink as they can qualify as a priority borrower. The program has received 303,000 applications requesting loans of $70 billion but has only $29 billion in funding.
IRS released guidance for employer COBRA premium assistance tax credit authorized under ARPA
IRS begins correcting tax returns for unemployment compensation income exclusion; periodic payments to be made May through summer:
- IRS begins correcting tax returns for unemployment compensation income exclusion; periodic payments to be made May through summer
IRS, Treasury announce families of 88 percent of children in the U.S. to automatically receive monthly payment of refundable Child Tax Credit. The first monthly payment of the expanded and newly-advanceable Child Tax Credit (CTC) from the American Rescue Plan will be made on July 15.
- IRS, Treasury announce families of 88 percent of children in the U.S. to automatically receive monthly payment of refundable Child Tax Credit
SBA Launches “Getting Back on Track: Help Is Here” Webinar Series to Help America’s Small Business Owners & Entrepreneurs
- Thursday, June 17 at 5:00PM PDT: Region 9 Serving – Arizona, California, Guam, Hawaii, and Nevada: Getting Back on Track Tour
The FTB updated its COVID-19 FAQ webpage to let taxpayers and tax professionals know that for paper returns and other documents that must be signed with an original signature by the taxpayer and/or their tax representative, the FTB will not require an original signature through December 31, 2021 (previously June 30, 2021), except for POAs.
PPP Update–The SBA has stopped accepting new PPP applications from most lenders as general funds run out. The only remaining funds available for new applications are $8 billion set aside for community financial institutions (CFIs), which typically work with businesses in underserved communities. The agency also has set aside $6 billion for PPP applications still in review status or needing more information due to error codes.
The FTB has announced that it will automatically adjust California returns for taxpayers who received UI benefits, to reflect the reduced AGI as a result of the $10,200 UI exclusion on the federal return.
SBA unveils initial Restaurant Revitalization Fund results – More than 186,000 restaurants, bars, and other food and beverage businesses applied for assistance during the first two days after the program’s application window opened May 3. The value of the requested grants was not disclosed.
San Francisco has been moved to the least restrictive yellow reopening tier. Beginning Thursday, May 6, San Francisco will reopen indoor bars, indoor family entertainment activities, outdoor organized community sporting events, and will loosen guidelines for a range of activities, including fitness, dining, offices, meetings, and receptions.
- San Francisco Reopens and Expands Businesses and Activities as it Moves into the State’s Yellow Tier
Applications for the SBA’s Restaurant Revitalization Fund opened today, May 3, 2021. Every applicant is eligible to apply during the first 21 days, but in that time, the SBA will only process and fund applicants from priority groups. All eligible businesses are encouraged to apply as soon as possible.
Since the $10,200 UI exclusion was enacted by the American Rescue Plan Act, the big question has been how to treat the exclusion in community property states. The IRS has confirmed that the UI benefits are community income that are split equally between the two spouses and each spouse may claim up to the $10,200 exclusion.
- IRS issues guidance on UI exclusion and community property
- 2020 Unemployment Compensation Exclusion FAQs
A summary of the American Rescue Plan Act’s tax provisions, including unemployment benefits, recovery rebates, COBRA continuation coverage, child tax credit, earned income tax credit, Child and dependent care credit, Family and sick leave credits, employee retention credit, premium tax credit, and student loans:
President Biden announced his “American Families Plan, an investment in our kids, our families, and our economic future”. The plan contains many revenue raising tax provisions to fund the plan:
Some people got more than one notice about their Economic Impact Payments. Here are some details about each notice and what action some people may need to take:
PPP Update–Governor Newsom signed AB 80 this afternoon:
SBA sets opening dates for the Restaurant Revitalization Fund–Registration for the program will open at 6:00 AM PDT on April 30, with the doors opening for application submissions starting at 9:00 AM PDT on May 3. In preparation for the May 3 opening of the application window, the SBA advised eligible entities to familiarize themselves with the application process in advance. Specific steps recommended include:
- Registering for an account in advance at sba.gov starting Friday, April 30, 2021, at 6:00 AM PDT
- Reviewing the official guidance, including the program guide, frequently asked questions, and application sample.
- Preparing the required documentation.
- Working with a point-of-sale vendor or visiting sba.gov to submit an application when the application portal opens. (Note: If an applicant is working with a point-of-sale vendor, they do not need to register beforehand on the site.)
- Attending a virtual training webinar.
- SBA sets opening dates for Restaurant Revitalization Fund
Round 6 of the California Small Business COVID-19 Relief Grant Program will open on Wednesday, April 28 at 9:00 AM and close on Tuesday, May 4 at 5:00 PM.
- Eligible applicants: current waitlisted small businesses and/or nonprofits not selected in Rounds 1, 2, 3, or 5 and new applicants that meet eligibility criteria.
- California Small Business COVID-19 Relief Grant Program
The IRS issued adjusted amounts for the child tax credit, the earned income tax credit (EITC), and the premium tax credit (PTC) for 2021, to reflect changes enacted in the American Rescue Plan Act of 2021:
The SBA launched a new round of Economic Injury Disaster Loan (EIDL) assistance – called Supplemental Targeted Advances – on April 22, 2021 that will provide $5 billion in additional assistance to 1 million small businesses and nonprofit organizations that have been most severely affected by the economic effects of the COVID-19 pandemic. The Supplemental Targeted Advance program is the latest SBA relief program to launch as part of the American Rescue Plan Act.
The IRS wants to remind employers that they can receive a refundable payroll tax credit when offering paid time off to employees for COVID related time off including time to get vaccinated or recover from vaccine side effects:
PPP Update–The California General Assembly sent AB 80 to Gov. Newsom, and he is expected to sign it. AB 80 generally conforms to the federal treatment of PPP loan forgiveness and EIDL grants, with one major exception:
- To deduct expenses paid with PPP loan forgiven amounts, the taxpayer must have a 25% reduction in gross receipts in any 2020 calendar quarter as compared to the comparable 2019 calendar quarter. If the taxpayer does not meet this threshold reduction, the expenses cannot be deducted on the California return.
- 2021-32: California’s partial PPP conformity bill sent to Governor
Expenses paid with 2020 PPP loans can be deducted on 2021 tax returns–The IRS announced a limited safe harbor for certain businesses that received first-round Paycheck Protection Program (PPP) loans but did not deduct any of the eligible expenses because they relied on (previously) current IRS guidance. This safe harbor is available only for taxpayers that filed their 2020 federal tax returns prior to Dec 27, 2020.
- Treasury Department and IRS provide safe harbor for small businesses to claim deductions relating to first-round Paycheck Protection Program loans
- Revenue Procedure 2021-20
SBA to Reopen Shuttered Venue Operators Grants for Applications on April 24 at 12:30 p.m. EDT:
Comcast RISE is a multi-year commitment to provide marketing, creative, media, and technology services to Black, Indigenous and People of Color (BIPOC)-owned business across the country. Businesses that qualify will receive marketing consultations, media placements, commercial creative production services, and/or technology services from Effectv and Comcast Business.
- Applications are due by Friday, May 7: Comcast RISE
San Francisco Venue Fund will provide grants of $10,000 or more to help San Francisco-based live music and entertainment venues stay in business. NOTE: This fund is distinct from the SBA Shuttered Venue Operators Grant (SVO Grant) program.
- Applications are due by Wednesday, May 5 at 11:59 PM: SF Music and Entertainment Venue Recovery Fund
SBA Restaurant Revitalization Fund (RRF) website is now live:
- Sample application and program guide are now online so applicants can begin to prepare for the program’s opening
- SBA did not announce an official opening date for accepting applications
- For the first 21 days that the program is open, the SBA will prioritize reviewing applications from small businesses owned by women, veterans, and socially and economically disadvantaged individuals. Following the 21-day period, all eligible applicants are encouraged to submit applications.
- Restaurant Revitalization Funding Application Sample
- Sign-up for RRF emails and updates
- Restaurant Revitalization Funding Program Guide
- Reporting Paycheck Protection Program (“PPP”) Proceeds on the Federal Form 990 and Other Changes You Can Expect on the 2020 Form
- Changes to the 2020 Form 990-PF
- Form 990-T Redesigned for 2020
SBA aims to reopen Shuttered Venue Operators Grant portal this week. The SBA said in a news release that its technology team and vendors are focused on testing the portal, which was forced to shut down due to technical issues only hours after it opened on April 8.
AB 80, the California bill to allow deductions for expenses paid with forgiven PPP debt, has been amended to include significant changes. Bill has not yet been enacted:
- The proposed $150,000 of allowed expenses has been eliminated
- All eligible expenses paid with a PPP loan can be deducted only if the borrower suffered a 25% decline in gross receipts in one quarter of 2020 vs the same quarter of 2019
- 2021-28: Big changes to AB 80
San Francisco Community Investment Loan Program– This new loan program, to be launched in May, is aimed at supporting businesses by providing working capital, especially to those left out of existing relief programs. The program will offer San Francisco small businesses very low to zero-interest loans ranging up to $100,000.
Santa Clara County Commercial Eviction Moratorium extended through June 30, 2021 – Protected small business tenants have up to 6 months after the moratorium expires or terminates to repay at least 50% of the past-due rent, and up to 12 months after the moratorium expires or terminates to repay in full the past-due rent.
SBA Restaurant Revitalization Grants—Congresswoman Anna Eshoo is hosting a webinar to provide important information about this $29 billion grant program established under the recently passed American Rescue Plan Act. An SBA representative will be joining the webinar to answer questions. The SBA is expected to launch the program this month.
- Thursday, April 15, 2021 at 10:00 AM, register here: Federal Aid for Restaurants Webinar with Congresswoman Anna Eshoo
The San Francisco Relief Grant Fund provides immediate relief to help stabilize small business operations with grants of $5k to $25k based on the business’ number of employees prior to the pandemic. The funds will be split into two programs:
- The Small Business Storefront Equity program focuses on businesses that have been most impacted by shelter-in-place mandated closures, and those that have not been able to access other local, state, and federal resources, and those serving low-income, historically disinvested neighborhoods: Apply for a small business storefront equity grant
- The Community Anchor Storefront program focuses on long-running businesses and those that contribute to the culture and vibrancy of San Francisco and its commercial corridors: Apply for a community anchor storefront grant
IRS extends additional tax deadlines to May 17:
- Individual retirement arrangements (IRAs)
- Health savings accounts
- Archer medical savings accounts
- Coverdell education savings accounts
- The deadline for reporting and paying the 10% additional tax on amounts included in gross income from 2020 distributions from IRAs or workplace-based retirement plans is now May 17, 2021
- The due date for Form 5498 series returns related to these accounts is now June 30, 2021
- The law provides a three-year window to claim a refund. Normally, April 15, 2021, is the deadline to claim a refund from tax year 2017 but, the IRS has extended it to May 17, 2021
- Foreign trusts and estates with federal income tax filing or payment obligations, who file Form 1040-NR, now have until May 17, 2021.
- IRS extends additional tax deadlines to May 17
- Note: April 15, 2021 is still the deadline to make first quarter estimated tax payments. However, a bill to postpone the due date to May 17 has been introduced in Congress:
Businesses can claim a 100% deduction on restaurant meals through the end of 2022, the IRS announced.
JoA Podcast: PPP and tax advice for not-for-profits:
PPP Update–the US Treasury has released guidance, allowing states to enact tax reduction legislation conforming to federal tax provisions and not violate the provisions of the American Rescue Plan Act. This will allow the CA legislature to once again work on PPP conformity.
City of San Jose-hosted webinar on Rebuilding Your Business – Getting Your Customers and Employees to Come Back:
- April 15th at 3:30 pm, register here: Tips on Getting Your Customers and Employees to Come Back
The IRS announced that it will take steps to automatically refund money this spring and summer to people who filed their tax return reporting unemployment compensation before the recent changes made by the American Rescue Plan.
- The legislation allows taxpayers who earned less than $150,000 in modified adjusted gross income to exclude unemployment compensation up to $20,400 if married filing jointly and $10,200 for all other eligible taxpayers.
- IRS to recalculate taxes on unemployment benefits; refunds to start in May
Employee Retention Credit Update—On April 2nd, the IRS issued guidance (Notice 2021-23) for employers claiming the credit in Quarter 1 and 2 of 2021. The notice highlighted the changes made to the ERC rules in 2021 vs 2020:
- Guidance for the changes applicable in Qtr 3 and Qtr 4 will be issued at a later date.
- Employers can claim a refundable tax credit equal to 70% of the qualified wages they pay to employees during Quarter 1 and 2 of 2021.
- Qualified wages are limited to $10,000 per employee per calendar quarter in 2021. The maximum employee retention credit available is $7,000 per employee per calendar quarter.
- Wages used for the 2021 ERC cannot be used to claim the R & D credit (and a few additional credits)
- IRS provides guidance for employers claiming the Employee Retention Credit for first two quarters of 2021
- ERC Overview on the ASL website: 2020 and 2021 Employee Retention Credit (ERC) Overview
IRS letters explain why some 2020 Recovery Rebate Credits are different than expected:
Here’s how the third Economic Impact Payment is different from earlier payments:
- It is an advance payment of the 2021 Recovery Rebate Credit.
- It will be larger for most eligible people.
- More people qualify as dependents.
- Income phase-out amounts are different for the third payments.
- Some people may be eligible for a Supplemental Payment.
- Changes to earlier eligibility requirements.
- Here’s how the third Economic Impact Payment is different from earlier payments
Newsom announced June 15 as the date to fully reopen California’s economy if two criteria are met:
- If vaccine supply is sufficient for Californians 16 years and older who wish to be inoculated; and
- If hospitalization rates are stable and low
- Governor Newsom Outlines the State’s Next Step in the COVID-19 Pandemic Recovery, Moving Beyond the Blueprint
San Jose’s Al Fresco dining program, which has allowed restaurants and small businesses to operate outside during COVID-19 restrictions, will be extended until the end of the year.
PPP Update—President Biden signed H.R. 1799, the PPP Extension Act of 2021. The Act extends the application deadline for both first and second draw PPP loans from March 31 to May 31, 2021. The PPP Extension Act does not provide any additional funding for the current round of the PPP.
- Patrick Kelley, associate administrator for the SBA’s Office of Capital Access, said that at the current lending rate, the PPP should have enough funding to last through mid-April.
- Biden signs PPP deadline extension into law
Emergency financial aid grants made by a federal agency, state, Indian tribe, higher education institution or scholarship-granting organization (including a tribal organization) to a student because of an event related to the COVID-19 pandemic are not included in the student’s gross income.
The IRS and Treasury Department announced that they anticipate payments will begin to be issued this weekend to Social Security recipients and other federal beneficiaries who do not normally file a tax return, with the projection that the majority of these payments would be sent electronically and received on April 7.
- IRS projects stimulus payments to non-filer Social Security and other federal beneficiaries will be disbursed later this week
Free COBRA Insurance Premiums begin April 1st. The American Rescue Plan Act authorized 6 months of no cost COBRA health insurance coverage for “assistance eligible individuals”. Starting April 1st, the individual’s employer or former employer is responsible for the payment of premiums. The employer will be reimbursed by a refundable federal payroll tax credit. Further guidance is expected “soon” from IRS and Department of Labor even as the program officially begins later this week.
IRS extends additional tax deadlines for individuals to May 17:
- Time to make contributions to IRAs and health savings accounts extended to May 17
- 2017 unclaimed refunds – deadline extended to May 17
- 2021 AFSP deadline postponed to May 17
- Estimated tax payment still due April 15
- IRS extends additional tax deadlines for individuals to May 17
The IRS issued Announcement 2021-7 clarifying that the purchase of personal protective equipment, such as masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of coronavirus are deductible medical expenses. These expenses are also eligible to be paid or reimbursed under health flexible spending arrangements (health FSAs), Archer medical savings accounts (Archer MSAs), health reimbursement arrangements (HRAs), or health savings accounts (HSAs).
- Face masks and other personal protective equipment to prevent the spread of COVID-19 are tax deductible
Unemployment benefit exclusion for married taxpayers—If a married couple’s combined AGI (calculated without any UI compensation) is below $150,000, then MFJ taxpayers may exclude up to $20,400 of unemployment income even if one of the spouses had less than $10,200 in UI and the other spouse had more than $10,200. That is because California is a community property state and the Tax Court has recognized that UI is treated as community property.
- If AGI is over $150,000 taxpayer should consider filing separate returns in order to qualify for the exclusion as the income limitation remains $150,000 per taxpayer.
- Spidell – UI exclusion for married taxpayers
Senate passes PPP deadline extension (from March 31 to May 31). The legislation goes to President Biden next.
- However, a measure to amend the bill was narrowly defeated 52–48. The amendment would have restricted the SBA’s ability to prioritize certain PPP borrowers over others.
- Journal of Accountancy – Senate passes PPP deadline extension
The SBA is targeting early April to launch a phased rollout of the $28.6 billion Restaurant Revitalization Fund (RRF). The ARPA, created the RRF to provide restaurants with grants equal to their pandemic-related revenue loss, up to $10 million per entity, or $5 million per physical location.
SBA to Increase Lending Limit for COVID-19 Economic Injury Disaster Loans – Starting the week of April 6, 2021, the SBA is raising the loan limit for the COVID-19 EIDL program from 6-months of economic injury with a maximum loan amount of $150,000 to up to 24-months of economic injury with a maximum loan amount of $500,000.
The SBA announced that it will start taking Shuttered Venue Operators Grant applications on April 8, 2021. These grants are available to qualified theaters, performing arts organizations, museums, etc. Grants may be awarded up to the lesser of 45% of the grantee’s 2019 gross earned revenue or $10 million (alternative formulas apply to those businesses not in operation in 2019).
- Interested organizations may register for an informational webinar on Tuesday, March 30, 2021, from 11:30AM to 1:00PM PDT, register here: SVOG Application Informational Webinar
The deadline for Round 4 of the California Small Business COVID-19 Relief Grant Program has been extended to Friday, March 26 at 5:00PM. Eligible applicants: Only nonprofit cultural institutions with any revenue size that meet eligibility criteria found at CAReliefGrant.com/arts-and-culture/
- New applications are now being accepted in Round 5, which started today, March 25, and runs through Wednesday, March 31. Waitlisted applicants will automatically be considered and should not reapply.
- California Small Business COVID-19 Relief Grant Program
Oakland Businesses–AEO and Fiserv have launched the Fiserv Back2Business Grant Program, which will make grants of up to $10,000 to Black- and minority-owned businesses in Oakland and other select cities across the country to help relieve the impacts of COVID-19.
- Applications are due by Wednesday, April 21: Fiserv Back2Business Grant Program
The due date for certain single audits to be submitted to the Federal Audit Clearinghouse has been delayed six months as a result of challenges related to the coronavirus pandemic. The memorandum states that awarding agencies should allow recipients and sub-recipients with fiscal year ends through June 30, 2021, that have not yet filed their single audits with the Federal Audit Clearinghouse to delay the completion and submission of the single audit reporting package to six months beyond the normal due date.
The IRS announced today that the next batch of Economic Impact Payments will be issued to taxpayers this week, with many of these coming by paper check or prepaid debit card.
- More Economic Impact Payments set for disbursement in coming days; taxpayers should watch mail for paper checks, debit cards
CA COVID-19 Rent Relief program – Landlords who participate in the program can get reimbursed for 80% of an eligible renter’s unpaid rent between April 1, 2020, and March 31, 2021, if they agree to waive the remaining 20% of unpaid rent during that specific time period. Eligible renters whose landlords choose not to participate in the program may apply on their own and receive 25% of unpaid rent between April 1, 2020, and March 31, 2021.
- Note for landlords who don’t participate in the program: While the Rental Assistance Program is optional, if landlords later sue the tenant for damages based on the tenant’s rental arrears without participating, judges in those cases do have the discretion to make a finding on how much the landlord’s requested rent was available to the landlord via the Program and could reduce the landlord’s damages based on the funding available via this program.
- California’s COVID-19 Rent Relief
The American Rescue Plan Act granted a $10,200 per taxpayer exclusion for unemployment compensation for tax year 2020:
- The IRS plans to automatically process refunds for taxpayers that filed returns before ARPA was enacted.
- IRS released a worksheet for taxpayers to use to calculate the exclusion amount: IRS.GOV New Exclusion of up to $10,200 of Unemployment Compensation
New PPP guidance from the SBA incorporates changes to the program made by the American Rescue Plan Act and establishes that entities that receive a Shuttered Venue Operators Grant (SVOG) cannot subsequently receive a PPP loan.
- In a 26-page IFR released Thursday afternoon, the SBA clarified that if a venue operator receives first- and second-draw loans during the current PPP round and then receives an SVOG, the amount of the SVOG will be reduced by the total of the two PPP loans.
- Venue operators and other eligible SVOG applicants do not have to subtract out any PPP funding received before Dec. 27, 2020.
- Journal of Accountancy – New PPP guidance implements changes from American Rescue Plan Act
SBA Launches Portal to Begin Accepting Shuttered Venue Operators Grant Applications on April 8th:
- SBA Press Release – SBA Launches Portal to Begin Accepting Shuttered Venue Operators Grant Applications on April 8
- Shuttered Venue Operators Grant Application Portal
The Employment Development Department is taking action to roll out expanded federal unemployment benefits – including continuing, without interruption, the extra $300 weekly payment for people collecting state unemployment insurance.
- Department Issues Update on Launching the American Rescue Plan of 2021 to Continue Helping Unemployment Insurance Claimants
California will follow the IRS filing and payment extension date of May 17, 2021, for individual taxpayers only. Like the IRS extension, the California extension will not apply to the estimated tax Q1 payment date of April 15, 2021. Taxpayers must pay their California estimated tax by April 15, 2021, to avoid penalties.
Tax Day for individuals extended to May 17, 2021: Treasury, IRS extend filing and payment deadline. Please note:
- Corporations and Trusts with an April 15th due date have not been deferred to May 17th
- This relief does not apply to estimated tax payments for the first quarter of 2021. These payments are still due on April 15th
- State tax conformity is not known at this time
- Tax Day for individuals extended to May 17: Treasury, IRS extend filing and payment deadline
House passes PPP deadline extension (from March 31 to May 31) Tuesday night. Next, it goes to the Senate for consideration.
California’s COVID-19 rent relief application portal went live on Monday, which will help eligible landlords and tenants cover unpaid rent from the past year.
- Here’s the application: CA COVID-19 Rent Relief
For Oakland Businesses–The Keep It Caring, Keep It Oakland COVID-19 Recovery Fund will make 17 grants of $5,000 each to independent businesses in Oakland that have been negatively impacted by COVID-19.
- Applications are due by Friday, March 19 at noon: Keep It Caring, Keep It Oakland COVID-19 Recovery Fund
Small businesses that received a COVID-19 Economic Injury Disaster Loan (EIDL) won’t have to start making payments on the loan until 2022, the SBA announced.
- For all SBA disaster loans made in 2020, the first payment due date is 24 months, extended from 12 months, from the date of the note.
- For all SBA disaster loans made in 2021, the first payment due date is 18 months, extended from 12 months, from the date of the note.
- SBA defers EIDL payments until 2022
The SBA expects to begin accepting applications in early April for the Shuttered Venue Operators Grant (SVOG) program.
2021 Economic Impact Payments are now being sent.
- Individuals can check their payment status in the Get My Payment tool: Get My Payment
The FHFA announced that Fannie Mae and Freddie Mac will extend temporary loan origination flexibilities until April 30, 2021. All temporary flexibilities were set to expire on March 31, 2021.
On March 12, 2021, the Governor’s office announced that AB 80 has been put on hold. AB 80, as initially drafted, would provide at least partial conformity to the federal provision allowing Paycheck Protection Program loan borrowers to deduct expenses paid with PPP forgiven loan amounts.
- Due to provisions of the American Rescue Plan Act, the state is awaiting additional guidance from the U.S. Treasury Department to see if AB 80 can be enacted.
- 2021-18: AB 80 in limbo: Now what?
President Biden signed the $1.9 trillion American Rescue Plan Act of 2021 (ARPA) into law on March 11, 2021.
- We have compiled a summary of the tax related provisions here: American Rescue Plan Act of 2021 – Relief for Individuals, Employees, and Businesses
What employers need to know about repayment of deferred payroll taxes:
The AICPA reiterated its recommendation that the SBA delay the end of the PPP application period by at least 60 days and also urged the SBA to make retroactive new rules issued this week changing the formula sole proprietors use to calculate their maximum loan amounts.
Senate passes amended $1.9 trillion COVID-19 stimulus bill. Known as the American Rescue Plan Act, H.R. 1319, the bill will be sent to President Biden’s desk to be signed into law if it passes the House without changes.
The SBA recently released fresh guidance for the Shuttered Venue Operators Grant (SVOG) program, but the agency still cannot say when the $15 billion program will start accepting applications.
Employee Retention Credit Update–In March 2021, the IRS issued Notice 2021-20 containing a series of FAQs to provide guidance for employers claiming the Employee Retention Credit for calendar quarters in 2020. In the guide below, are references to the FAQs addressing specific areas of the 2020 ERC. The Notice addresses only 2020 ERC rules as the IRS plans to release additional guidance for 2021 ERC soon.
FHFA announced that Fannie Mae and Freddie Mac will continue to offer COVID-19 forbearance to qualifying multifamily property owners through June 30, 2021, subject to the continued tenant protections FHFA has imposed during the pandemic. The programs were set to expire March 31, 2021.
Governor Newsom signed an executive order extending authorization for local governments to halt evictions for commercial renters impacted by the COVID-19 pandemic through June 30, 2021.
PPP Updates–The PPP FAQs have been updated to reflect changes made by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act enacted on December 27, 2020. The FAQs are in the process of being revised to reflect changes made by the Interim Final Rule on Revisions to Loan Amount Calculation and Eligibility posted on SBA’s website on March 3, 2021.
- Paycheck Protection Program Loans Frequently Asked Questions (FAQs)
- Borrower Application Form (revised 3/3/2021)
- Borrower Application Form for Schedule C Filers Using Gross Income (3/3/2021)
- Paycheck Protection Program (PPP) Information Sheet: Borrowers (3/3/2021)
PPP Update—Today, the SBA issued an Interim Final Rule outlining the rules for sole proprietors, gig workers, and independent contractors to qualify for a PPP loan based on their 2019 or 2020 gross receipts instead of their net income. Loans are still limited to $20K but this rule will enable borrowers to obtain larger loans than the prior rules allowed. If gross receipts exceed $150K, the “certification of need” will not be covered by the safe harbor.
- Business Loan Program Temporary Changes; Paycheck Protection Program – Revisions to Loan Amount Calculation and Eligibility
Didn’t get Economic Impact Payments? Check eligibility for Recovery Rebate Credit:
AICPA urges Congress to extend PPP deadline by at least 60 days. The current deadline for PPP applications is March 31, but many applications have run into problems in the SBA’s PPP processing platform.
There will be four new rounds of the California Small Business COVID-19 Relief Grant Program–On February 23rd, Governor Newsom signed into law a comprehensive package providing urgent relief for the small businesses of CA. The package provides an additional $2 billion – a four-fold increase over the $500 million currently being distributed – for grants up to $25,000 for small businesses impacted by the pandemic, and allocates $50 million of this total for non-profit cultural institutions.
- Round 3 (waitlisted applicants from Rounds 1 and 2): Friday, March 5th through Thursday, March 11th, 2021
- Round 4 (non-profit cultural institutions only): Tuesday, March 16th through Tuesday, March 23rd, 2021
- Round 5: Thursday, March 25th through Wednesday, March 31st
- Round 6: Date to be announced soon
- Update California Small Business COVID-19 Relief Grant Program
Santa Clara, San Francisco, and Napa counties have been moved to the less-restrictive red reopening tier, allowing limited-capacity for indoor dining, gyms and movie theaters. The changes go into effect today (Wednesday).
March 1, 2021, IRS released Notice 2021-20 updating previously issued FAQs for changes made by CAA-2021 and addressing additional issues.
- Interaction of PPP eligible expenses and wages eligible for the ERC for 2020 for borrowers that have submitted forgiveness applications.
- Notice 2021-20 also provides answers to questions such as: who are eligible employers; what constitutes full or partial suspension of trade or business operations; what is a significant decline in gross receipts; how much is the maximum amount of an eligible employer’s employee retention credit; what are qualified wages; how does an eligible employer claim the employee retention credit; and how does an eligible employer substantiate the claim for the credit.
- While the Relief Act also extended and modified the employee retention credit for the first two calendar quarters in 2021, Notice 2021-20 addresses only the rules applicable to 2020. The IRS plans to release additional guidance soon addressing the changes for 2021.
Tax provisions in the year-end coronavirus relief act – Pandemic relief, tax extenders, and much more were included in yearend legislation.
IRS officials issued an alert concerning amended returns and claims for the Domestic Production Activities Deduction (DPAD). This provision of tax law was repealed as part of the Tax Cuts and Jobs Act for taxable years after December 31, 2017. In the wake of the repeal, the IRS has received a wave of questionable amended returns and claims for tax benefits in the billions of dollars.
FHFA announced that Fannie Mae and Freddie Mac are extending the moratoriums on single-family foreclosures and real estate owned (REO) evictions until June 30, 2021
The 2021 FedEx Small Business Grant Contest is now open, offering small business owners across the country a chance to apply for grants of up to $50,000 in addition to FedEx Office print services.
- Applications are due by Tuesday, March 9: FedEx Small Business Grant Contest
The AICPA Tax Executive Committee urged Treasury and the IRS to announce any pending tax filing and payment deadline postponements by March 1, 2021.
- Their recommendation included, If Treasury and the IRS determine they cannot hold to the April 15 deadline, that decision should be announced by March 1 and the postponed date should be June 15.
- The AICPA also requested underpayment and late-payment penalty relief, a delay in collection activities, and an expansion of the temporary e-signature relief.
- AICPA seeks certainty on filing deadline and relief for 2020 tax year
EDD has enhanced their Form 1099-G website to include what taxpayers should do if they are the victim on unemployment compensation fraud.
The Marin County Small Business Loan Fund will be making 0%-interest loans to small businesses located in Marin County and financially impacted by the COVID-19 pandemic.
- This program is not on a first-come, first-served basis. Businesses will have until March 15 to submit a Loan Inquiry Form and be included in the program lottery.
- Marin County Small Business Fund
Governor Newsom signed two bills today that will provide cash grants to qualified small businesses impacted by COVID-19 and cash (stimulus) payments to lower-income families. The Legislature is still negotiating a PPP/EIDL conformity bill that would allow businesses to deduct expenses paid with these loans/grants. It is hoped that this bill will be passed by the end of this week.
- Governor Newsom Signs Legislative Package Providing Urgent Relief to Californians Experiencing Pandemic Hardship
Victims of this month’s winter storms in Texas will have until June 15, 2021, to file various individual and business tax returns and make tax payments, the IRS announced today:
Up & Running California–A New eBay Program Offering Free Ecommerce Training for Small Businesses. Through the program, up to 300 California small businesses will be selected to participate in this six-week interactive e-commerce training program designed to help them get and grow online.
- Applications are open until 11:59PM PT on Thursday, March 11: Up & Running California
Earlier this month, the IRS issued notices to approximately 260,000 taxpayers stating they haven’t filed their 2019 federal tax return. These notices, referred to as CP59 notices, are issued yearly to identified taxpayers who have failed to file a tax return that was due the prior calendar year (Tax Year 2019). Due to pandemic-related shutdowns, the IRS has not completed processing all 2019 returns at this time. Therefore, the CP59 notices should not have been sent because some portion of the recipients may actually have filed a return that is still being processed.
- People who filed their 2019 return but nevertheless received the CP59 notice, can disregard the letter and do not need to take any action. There is no need to call or respond to the CP59 notice because the IRS continues to process 2019 tax returns as quickly as possible.
- IRS Statement about CP59 notices
President Biden early Monday announced a series of changes to the Paycheck Protection Program designed to make the program more accessible to underserved borrowers. The changes:
- Starting Wednesday, for a two week period only, businesses with fewer than 20 employees can apply for loans
- The way loans are calculated will be revised so businesses without employees get more relief. Details to be announced later.
- Set aside $1 billion in PPP loan funds for businesses without employees in low- and moderate-income areas.
- The elimination of an exclusion that prevents business owners with non-fraud felony convictions from accessing the program.
- The elimination of an exclusion that prevents business owners who are delinquent on federal students loans from accessing the program.
- Non-citizen small-business owners who are lawful U.S. residents will be able to apply for loans using individual taxpayer identification numbers.
- The SBA reported Monday that it approved more than 1.9 million PPP loans for a total of $40 billion from Jan. 11 through Feb. 21. The application window for the current, $284 billion iteration of PPP is scheduled to close March 31.
- FACT SHEET: Biden-Harris Administration Increases Lending to Small Businesses in Need, Announces Changes to PPP to Further Promote Equitable Access to Relief
PPP processing delays continue. Measures implemented by the SBA to screen for potential fraud in PPP applications continue to cause stress and delays in the system. The discussion about processing delays took place before the White House issued their statement Monday morning regarding the changes coming to the PPP.
San Mateo County Restaurant, Brewery, and Winery Relief Program is now accepting applications. The Relief Program will provide grants of up to $10,000 each to qualifying establishments to ensure continued operation and assist in covering current business operating expenses, including, for example: rent, payroll, and facility modifications needed to accommodate on-site indoor and outdoor dining.
- Applications are due by Monday, March 8, 2021 at 12:00pm: San Mateo County Strong – Restaurant, Brewery & Winery Relief Grants
Create a Safe Online Sales Presence: a Free Webinar for Small Businesses – Learn how to sell to new and current customers online:
- Feb 25, 2021 at 3:30 PM, Register here: Webinar Registration
As required by law, all first and second Economic Impact Payments issued; eligible people can claim Recovery Rebate Credit
- As required by law, all first and second Economic Impact Payments issued; eligible people can claim Recovery Rebate Credit
The IRS provided greater flexibility, due to the pandemic, to employee benefit plans offering health flexible spending arrangements (FSAs) or dependent care assistance programs. Under the COVID-related Taxpayer Certainty and Disaster Tax Relief Act of 2020, these plans now have additional discretion in 2021 and 2022 to adjust their programs to help employees better meet the unanticipated consequences of the public health emergency.
- PPP Borrower Application Form revised 2/17/2021
- Second Draw Borrower Application Form revised 2/17/2021
Governor Newsom announced a package of immediate actions that will provide needed relief to individuals, families, and businesses during the COVID-19 pandemic:
- The agreement partially conforms California tax law to new federal tax treatment for loans provided through the Paycheck Protection Program, allowing companies to deduct up to $150,000 in expenses covered by the PPP loan. All businesses that took out loans of $150,000 or less would be able to maximize their deduction for state purposes. Larger firms that took out higher loans would still be subject to the same ceiling of $150,000 in deductibility. More than 750,000 PPP loans were taken out by California small businesses. This tax treatment would also extend to the Economic Injury Disaster Loans as well. With this agreement in place, it seems unlikely AB 281 (addressing PPP conformity) will be enacted.
- Immediate Relief for Small Businesses Quadrupled – from $500 million to more than $2 billion, for grants up to $25,000 for small businesses impacted by the pandemic, and also allocates $50 million for cultural institutions
- The agreement provides for two years of fee relief for roughly 59,000 restaurants and bars licensed through the state’s Department of Alcoholic Beverage Control that can range annually from $455 to $1,235.
- Governor Newsom, Legislative Leaders Announce Immediate Action Agreement for Relief to Californians Experiencing Pandemic Hardship
The California EDD released new information resources to help people who received a Form 1099G prepare their 2020 tax returns.
FHFA announced that Fannie Mae and Freddie Mac are extending the moratoriums on single-family foreclosures and real estate owned (REO) evictions until March 31, 2021.
Taxpayers who don’t have their Notices 1444 and/or 1444-B, Your Economic Impact Payment, can view the amounts of their Economic Impact Payments through their personal IRS online account.
- Recovery Rebate Credit — Finding the Economic Impact Payment Amount to Calculate the Recovery Rebate Credit
FASB responded to an urgent pandemic-related accounting concern by voting to provide private companies and not-for-profits with an alternative to the requirement to monitor and evaluate goodwill impairment triggering events throughout the fiscal year and potentially measure a goodwill impairment at the date of triggering events.
The IRS provided a safe harbor under which “eligible educators” can deduct unreimbursed expenses for COVID-19 protective items as educator expenses under Sec. 62(a)(2)(D) ( Proc. 2021-15).
New IRS form available for self-employed individuals to claim COVID-19 sick and family leave tax credits under FFCRA:
- New IRS form available for self-employed individuals to claim COVID-19 sick and family leave tax credits under FFCRA
KKR Small Business Builders program will make grants of $10,000 to eligible small businesses across the country through the Hello Alice platform. To be eligible, a business must have between 5 and 50 employees, less than $7 million USD in annual revenue, demonstrated need for support, a strong plan for moving forward, and be in good standing with the IRS or their local regulatory body.
California recently extended its qualified statewide residential eviction moratorium to June 30, 2021. The new law, SB 91, replaces California’s COVID-19 Tenant Relief Act of 2020 (AB 3088 / “the Act”), signed by Governor Newsom on August 31, 2020, and adds several new features beneficial to both landlords and tenants:
- Landlords MUST Notify Tenants of the New Law By February 28, 2021 to Preserve Landlords’ Right to Relief
- SB 91 provides instructions for allocating $1.4 billion in federal emergency rental assistance funds: soon, landlords providing housing to residential tenants have the option to apply for government funding covering up to 80% of rent accumulated during the specified period of April 1, 2020 and March 31, 2021, for tenants who demonstrated they could not pay their rent due to the COVID-19 pandemic.
SBA issues FAQs for Shuttered Venue Operators Grants
A taxpayer who receives a Form 1099-G from the EDD but never received unemployment insurance (UI) or pandemic unemployment assistance (PUA) benefits is likely a victim of fraud.
- The EDD is directing taxpayers to report the fraud by: EDD – Help Fight Fraud
CA Relief Grant is now accepting a second round of applications. Round 2 closes Monday, February 8 at 6 pm PST
States’ rolling conformity to the Code and CARES Act – Further analysis must be undertaken in some rolling conformity states, such as Colorado, Maryland, and Oregon, to determine whether and to what extent specific CARES Act provisions are in fact adopted on a rolling basis.
PPP Application Update—Second draw borrowers need to experience a 25% decline in gross receipts for one quarter of 2020 vs the same quarter of 2019. The gross receipts test should include the gross receipts of any affiliated entities.
The SBA announced that it is taking steps to improve the agency’s first-draw PPP loan review process so that small businesses seeking a second-draw loan have as much time as possible to access those funds. If clients are applying for a second PPP loan they should consider submitting their Forgiveness Application for the First Draw after the Second Draw is approved.
IRS updates FAQs on paid sick leave credit and family leave credit:
- The updates to the FAQs cover how the COVID-related Tax Relief Act of 2020, enacted December 27, 2020, extends the availability of the tax credits created by the FFCRA to eligible employers for paid sick and family leave provided through March 31, 2021, as well as other amendments to the credits.
- IRS updates FAQs on paid sick leave credit and family leave credit
- COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs
The FTB has just clarified that EIDL (Economic Injury Disaster Loan) advance grants are taxable to California:
Employee Retention Credit Updates—
- The IRS posted information Friday on how businesses that didn’t get the PPP loan they requested can instead claim the Employee Retention Credit for 2020 when they file a Form 941, the employer’s quarterly federal tax return, for the fourth quarter. More guidance is expected regarding how to claim the credit and interaction with PPP expenses.
- The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted Dec. 27, 2020, made a number of changes to the employee retention tax credits, including modifying and extending the Employee Retention Credit for six months through June 30, 2021. Several of the changes apply only to 2021, while others apply to both 2020 and 2021.
SBA created a website for the Shuttered Venue Grant Program:
- The Shuttered Venue Operators (SVO) Grant program was established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, signed into law on December 27, 2020. The program includes $15 billion in grants to shuttered venues.
- Eligible applicants may qualify for SVO Grants equal to 45% of their gross earned revenue, with the maximum amount available for a single grant award of $10 million. $2 billion is reserved for eligible applications with up to 50 full-time employees.
- Shuttered Venue Operators Grant
Governor Newsom announced an agreement to extend the eviction moratorium in California through June 30, 2021 – protecting tenants and small landlords.
San Mateo County to Consider $1M Fund for Restaurants, Breweries, Wineries
- Qualifying restaurants could receive grants of up to $10,000 each to offset revenue losses due to the COVID-19 pandemic and continue operations.
- San Mateo County to Consider $1M Fund for Restaurants, Breweries, Wineries
Round 2 of the Small Business COVID-19 Relief Grant Program will begin accepting applications for one week only from February 2 through February 8, 2021.
- The City of San Jose will be offering a seminar on how to apply for a new business grant program for up to $25,000. The seminar will be hosted on Thursday, January 28 at 4:00pm
- Register here: Small Business COVID-19 Relief Grant Program Webinar
Possible Property Tax Relief for Commercial Landlords – Santa Clara County Assessor’s office presented a webinar last week to discuss reassessment of commercial property that has declined in value due to the pandemic.
- View the recording: Assessor Property Tax Workshop for Commercial Property Owners
Opportunity Zone Funds and Investors granted deadline relief in Notice 2021-10.
- Investors—if the last day of the 180 day investment period falls after April 1, 2020 and before March 31, 2021 then the last day is postponed until March 31, 2021. This will allow investors to defer gains realized after October 5, 2019.
- QOF’s—relief granted for various time-sensitive requirements.
- Notice 2021-10 – Extension of Relief for Qualified Opportunity Funds and Investors Affected by Ongoing Coronavirus Disease 2019 Pandemic
PPP Conformity–Legislation has been introduced (AB 281) to conform California law to federal law allowing the deduction of expenses paid with forgiven PPP debt. The author of the legislation is the same assemblywoman that introduced the prior California conformity bill.
EDD starting to send 7.8 million Forms 1099-G reporting unemployment benefits paid in 2020:
- Unemployment Insurance Tax Forms Being Sent to Californians What the Public Needs to Know, and What to do Next
Main Street America and Brother International have teamed up to launch the ‘At Your Side’ Small Business Grant Program to provide grants of $5,000 to $10,000 to brick-and-mortar small businesses in designated Main Street districts as they work to adapt and recover from COVID-19.
- In the Bay Area, designated Main Street districts include the downtown areas of: Richmond, Fremont, Livermore, Pleasanton, Brentwood, Martinez, Benicia, and Gilroy.
- Applications are due by Thursday, January 28 at 4:59 pm.
- The “At Your Side” Small Business Grant Program
2019 Forms 5471 and 5472 – Taxpayers Receiving Penalty Notices in Error
- Some taxpayers who have timely filed their 2019 Form 5471, Information Return of U.S. Persons With Respect To Certain Foreign Corporations, and/or Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business, are receiving IRS late filing penalty notices in error. The issue appears to be caused by the IRS’s system not accounting for the extended time to file returns due to COVID-19 and automatically generating the penalty notices. The AICPA has made the IRS aware of this system error. If you encounter this issue, the AICPA recommends a call to the Practitioner Priority Service line and provide proof of a timely-filed extension
PPP Updates – The SBA and Treasury on Tuesday published updated Paycheck Protection Program loan forgiveness guidance and forms, including a one-page application for borrowers that received a PPP loan of $150,000 or less.
- PPP Loan Forgiveness Application Form 3508S
- Journal of Accountancy – Updated PPP loan forgiveness applications and rules unveiled
The SBA and Treasury released two other PPP loan forgiveness applications:
- Form 3508
- Form 3508EZ
- Borrowers must submit payroll and nonpayroll documentation when applying for loan forgiveness with those forms, which provide lists of the required documents.
In addition, the SBA and Treasury released Form 3508D, which certain individuals must use to disclose controlling interest in an entity applying for a PPP loans.
60,000 Paycheck Protection Program loans approved in first week submitted by nearly 3,000 lenders, for over $5 billion:
The IRS has issued guidance (Notice 2021-11) to address how employers who elected to defer certain employees’ payroll taxes can withhold and pay the deferred taxes throughout 2021 instead of just the first four months of the year.
Certain individuals will not be subject to the Sec. 6654 penalty on the underpayment of estimated income taxes if the underpayment is solely attributable to the recent repeal of the excess business loss limitations, the IRS announced on Tuesday
- Notice 2021-8
- Journal of Accountancy – Some individual taxpayers get relief from underpayment penalty
The SBA and Treasury issued an 18-page document detailing how Paycheck Protection Program borrowers should calculate revenue reduction and maximum loan amounts for second-draw PPP loans.
- Second Draw Paycheck Protection Program (PPP) Loans: How to Calculate Revenue Reduction and Maximum Loan Amounts Including What Documentation to Provide
- Journal of Accountancy – PPP calculations guidance released
In addition, the SBA and Treasury issued three pieces of guidance over the weekend:
- A 12-page document detailing calculation processes and required documentation for first-draw PPP loans by business type.
- A procedural notice explaining what PPP borrowers must do if they or their lender made an application error that resulted in a borrower receiving a PPP loan amount that exceeds the borrower’s correct maximum loan amount.
- A procedural notice establishing the requirements and processes for borrower resubmission of a loan forgiveness application using SBA Form 3508S when forms 3508 or 3508EZ were previously submitted.
The FHFA announced that Fannie Mae and Freddie Mac will extend the moratoriums on single-family foreclosures and real estate owned (REO) evictions until February 28, 2021.
IRS announced that the nation’s tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns.
Round 2 of California Small Business COVID-19 Relief Grant Program Opens Feb. 2 Through Feb. 8, 2021
- Note: If you applied during the first round, received a confirmation email and were notified of the outcome, you do NOT need to re-apply. Your application will be included for consideration in the second round.
- California Relief Grants
Californians impacted by COVID-19 are now starting to see the availability of up to 11 weeks of additional unemployment benefits from two federal programs. The California Employment Development Department (EDD) is automatically re-opening Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Assistance (PEUC) claims for those who had a balance remaining on those claims when the federal CARES Act expired on December 26.
The application window for the Paycheck Protection Program will open Friday for lenders with $1 billion or less in assets. The opening, which will take place at 6:00AM PT, applies for both first- and second-draw PPP loans.
- The program will begin accepting applications for first- and second-draw loans from large lenders on Tuesday, Jan. 19.
- Journal of Accountancy – PPP application dates announced
- Additional info: New Paycheck Protection Program Launched This Week By SBA
The IRS will not be sending copies of the new Form 1099-NEC, Nonemployee Compensation, to California or any other state. (The IRS will continue to send all other Forms 1099 to the states.) As a result, businesses must send copies of Form 1099-NEC directly to the FTB, even if a copy was filed with the IRS. This applies only to the Form 1099-NEC.
Mayor London Breed Announces New $62 Million Relief Plan for Small Businesses – The $62 million plan will provide a combination of grants and very low to zero-interest loans, which will complement and expand existing local, state, and federal initiatives.
- Proposed Grant Program ($12.4 million): The proposed grant program will provide immediate relief to help stabilize small business operations by offering grants of $5,000 to $20,000, based on the number of employees that each employer had in February 2020.
- Proposed Loan Program (Up to $50 million): This planned loan program is aimed at supporting businesses by providing working capital, especially to those left out of existing relief programs. This will include businesses that normally generate more than $2.5 million in annual revenue, including many restaurants.
- Mayor London Breed Announces New $62 Million Relief Plan for Small Businesses
Partial plan termination relief provided by Congress – The Consolidated Appropriations Act, 2021 (CAA), includes a temporary rule providing COVID-related relief from certain partial plan terminations.
Deterring and detecting fraud at a time of heightened risk
PPP Update – The SBA and Treasury released borrower loan application forms on January 8, for the rebooted Paycheck Protection Program. The program is expected to be open to all (non preferential) borrowers “soon”.
- Form 2483 – Paycheck Protection Program Borrower Application Form – updated from previous iterations that started with the original PPP program
- Form 2483-SD – PPP Second Draw Borrower Application Form – a new form for qualified PPP borrowers to seek a second draw of a forgivable loan
- Journal of Accountancy – PPP application forms released
The Fearless Fund COVID-19 Relief Business Grant Program is making grants of $10,000 to women of color entrepreneurs across the country.
- Applications are due by Thursday, January 21: Fearless Fund COVID-19 Relief Business Grant
The SBA has announced that the Paycheck Protection Program will reopen the week of January 11 (The closing date for the new PPP is March 31). The following new PPP funds will be available to borrowers:
- New “second draw PPP loans” for businesses with fewer than 300 employees and have experienced a 25% decline in gross receipts in any quarter of 2020 vs 2019. (Top-line Overview of Second Draw PPP 1/8/2021)
- Supplemental funding for original PPP loans where the loan amount would have changed due to new rules that have been released; or businesses that did not originally apply for first draw PPP loans. (Top-line Overview of First Draw PPP 1/8/2021)
- Only community financial institutions (Community Development Financial Institutions, minority deposit institutions, certified development companies, microloan intermediaries) will be able to submit first draw PPP loan applications to the SBA on Monday, January 11, and second draw PPP loan applications on Wednesday, January 13. The PPP program will then open to all other participating lenders “shortly thereafter”.
- It is uncertain how many “community financial institutions” will be participating as PPP lenders.
- Anticipated new application forms have not yet been released by the SBA.
The SBA and Treasury issued guidance late Wednesday night for the reconstituted Paycheck Protection Program. The guidance came in the form of two interim final rules:
- Business Loan Program Temporary Changes; Paycheck Protection Program as Amended – consolidates the rules for PPP forgivable loans for first-time borrowers and outlines changes made by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act
- Business Loan Program Temporary Changes; Paycheck Protection Program Second Draw Loans – lays out the guidelines for new PPP loans to businesses that previously received a PPP loan.
Guidance on Accessing Capital for Minority, Underserved, Veteran and Women-Owned Business Concerns:
San Jose extends paid sick leave protections. Under the new emergency ordinance, employees will receive 80 hours of paid sick leave per year and part-time employees can receive leave two-weeks worth of leave. The leave can be used regardless of how long a local employee has worked for a company.
- San Jose’s ordinance takes effect immediately and expires on June 30, 2021.
- San Jose Extends COVID-19 Paid Sick Leave Benefits Through June 30, 2021
Mayor London Breed’s legislation to provide $5 million in fee and tax waivers and deferrals for San Francisco businesses passed at the Board of Supervisors. The legislation gives businesses additional time to pay certain business taxes and fees, and also fully waives some fees for a subset of small businesses that have been particularly hard-hit by COVID-19, including entertainment and nightlife venues and restaurants.
- Mayor London Breed’s Legislation Providing Fee Waivers and Deferrals for Small Businesses Passes at Board of Supervisors
San Jose Contractors and subcontractors are required to comply with the December 16, 2020 Revised Santa Clara County Mandatory Directive for Construction Projects. Under the directive, contractors/subcontractors are responsible for submitting a jobsite-specific social distancing protocol; providing personal protective equipment; reporting COVID-19 positive cases and complying with contact-tracing efforts; designating and supporting the work of a jobsite-specific COVID-19 supervisor; and more.
Recorded Webinar to Help Guide Applications to California Relief Grants for Small Businesses. In this webinar available on YouTube, the Small Business Development Center explains the application process, and answers questions from business owners.
NBC Nonprofit Grant Program – Project Innovation will award exceptional non-profit programs that are addressing one of the four community issue areas: Culture of Inclusion, Youth Education and Empowerment, Next Generation Storytellers, and Community Engagement.
- Applications will be accepted from January 8, 2021 – February 12, 2021: https://www.nbcuprojectinnovation.com/
The Treasury Department and IRS issued Revenue Ruling 2021-2 today withdrawing previous guidance and conforming to the deduction of expenses paid with forgiven PPP loans authorized by the CAA of 2021.
- Guidance: Rev. Rul. 2021-2
- NOTE: California has not conformed to CAA so expenses continue to be non-deductible.
SBA Extends COVID-19 Economic Injury Disaster Loan Application Deadline through Dec. 31, 2021
In response to COVID-19, the IRS is allowing employers to switch from the vehicle lease valuation method to the cents-per-mile method (57.5 cents for 2020, 56 cents for 2021) for determining the value of an employee’s personal use of a vehicle during the pandemic (Notice 2021-7)
California Small Business COVID-19 Relief Grant Program Deadline Extended: Applications for Round 1 are now due by Wednesday, January 13 at 11:59 pm. The start of approval notifications will begin on January 15.
Governor Newsom proposes $4.5B for Equitable Recovery for California’s Businesses and Jobs in 2021 Budget:
- Mitigating the SALT deduction limitation for S-corporation shareholders by allowing S corporations to elect to pay a 13.3% state income tax. This would reduce the amount of income passed on to shareholders, who would get a state tax credit equal to 13.3% of their passed-through income. The mechanism would allow the S-Corp to deduct the state tax that would have been paid by the shareholder in effect avoiding the $10K SALT cap. IRS has issued guidance indicating this is an acceptable approach to avoid the $10K SALT cap imposed on individual taxpayers.
- COVID-19 Relief Grant Program – The proposal would double the size of the state’s current COVID-19 Relief Grant Program for small businesses, with a plan to add another $575 million to the program. The expansion would bring the total size of the program to $1.1 billion in grants to help small businesses (see #1 above)
- The second round of funding is expected to launch, though the state has not yet set a date for when the application window will begin.
- Fee Waivers – The Budget proposes $70.6 million for fee waivers to individuals and businesses most impacted by the pandemic – including barbers, cosmetologists, manicurists, bars and restaurants. These waivers will assist those who have not been able to operate or are operating at reduced capacity during the pandemic.
- California Jobs Initiative:
- $430 million for the California Competes Tax Credit
- $100 million to expand the Main Street Tax Credit (Small Business Hire Credit) to encourage hiring new employees and rehiring former employees
- $100 million for small business loans and disaster loans through the California Infrastructure and Economic Development Bank’s (IBank)
- $100 million to expand the sales tax exclusions to reduce the cost of manufacturing equipment in order to promote innovation and meet the state’s climate goals
- Governor Newsom to Propose $4.5 Billion for Equitable Recovery for California’s Businesses and Jobs in 2021 Budget
California law, AB 685 (COVID-19 notifications) went into effect Jan. 1, 2021 and expires in two years:
- Imposes new reporting requirements for employers regarding COVID-19 cases. AB 685 requires that employers provide a written notice to all employees and employers of subcontracted employees who were on the premises at the same time as a “qualifying individual” within the “infectious period” that they may have been exposed, as well as information about COVID-19 related benefits available under federal, state, and local laws like workers compensation benefits, COVID-19-related leaves, company sick leave, state-mandated leave, supplemental sick leave and anti-retaliation protections. Further it requires companies to notify their local public health agency of an “outbreak” within 48 hours, defined as at least three probable or confirmed COVID-19 cases within a 14-day period.
- AB-685 COVID-19: imminent hazard to employees: exposure: notification: serious violations
Governor Newsom Announces Golden State Stimulus – Golden State Stimulus $600 rapid cash support will go to recipients of the state’s Earned Income Tax Credit in 2019, as well as those filing with Individual Taxpayer Identification Numbers this year who meet the eligibility criteria.
- Governor Newsom also proposes extending the state’s eviction moratorium and expediting distribution of California’s $2.6 billion share of federal rental assistance to assist low-income tenants
- Governor Newsom Announces Golden State Stimulus
Santa Clara County Launches Loan Program for Small Businesses – a low-interest loan program of up to $100,000 now available for qualifying establishments.
- Three- or five-year term options with a 4.25 percent interest rates for small businesses with 50 or fewer full-time employees.
- Qualifying businesses also require revenues of under $2.5 million in 2019 and at least a 25 percent reduction in revenues compared to a prior one-year period
- California Rebuilding Fund
The California Small Business COVID-19 Relief Grant Program has announced that it will take applications from California small businesses impacted by COVID-19 for grants of between $5,000 and $25,000.
- Eligible businesses are those with between $1,000 and $2.5 million in annual gross revenues based on their most recently filed tax return, and include sole proprietorships and nonprofits, and have been operating since at least June 1, 2019.
- Application period opens December 30, 2020 at 8:00 AM PST and closes January 8, 2021 at 11:59 PM PST
- Round 2 will be announced in the near future. Any applicants who are eligible but are not awarded a grant in Round 1, will automatically be considered for Round 2. (Applying through multiple organizations will delay the application from being processed)
- Owners of multiple businesses, franchises, locations, etc. will be considered for only one grant and are required to apply for the business with the highest revenue.
- California Small Business COVID-19 Relief Grant Program
5 accounting considerations for divestitures and carveouts:
The Office of Management and Budget issued new guidance for Single Program Audits of various COVID-19 relief programs:
Financial fraud risks to watch for amid the pandemic:
President Trump signed into law the $900 billion COVID-19 relief bill passed Dec. 21 by Congress.
Congress just posted the text of its funding bill and bipartisan Covid-19 stimulus plan. Senate Majority Leader Mitch McConnell said the Senate will likely stay and vote tonight on the massive relief package. The House is expected to vote tomorrow with the President is expected to sign the legislation shortly thereafter.
The $900 billion COVID-19 economic relief package includes:
- The legislation clarifies that business owners can write-off expenses paid for with forgiven PPP loans, giving small companies a tax break that could amount to more than $100 billion.
- $284 billion for a new round of Paycheck Protection Plan loans –new borrowers and entities that previously received a loan would be eligible for this program but repeat borrowers would be subject to stricter eligibility requirements.
- $600 direct payments to individuals making less than $75,000 a year or couples making less than $150,000 and $600 per child.
- Federal unemployment insurance benefits will be extended for 10 weeks through mid-March, with each week supplemented by a $300 payment
- $15 billion to reinstate payroll reimbursements to airlines, which expired two months ago, as well as $1 billion for airline contractors.
- An expansion of the business meals deduction.
- A renewal of the employee retention tax credit for businesses that keep workers on their payrolls.
- $25 billion for emergency rental assistance, and it extends the CARES Act’s eviction moratorium until Jan. 31.
- Extends tax credits for renewable energy projects, including wind and solar production.
- Congress to Vote on New COVID-19 Stimulus Deal
The IRS explained how expanded tax benefits can help both individuals and businesses give to charity before the end of this year.
- Year-end reminder: Expanded tax benefits help individuals and businesses give to charity during 2020
As of December 18, people coming in from outside the Bay Area counties must quarantine for 10 days.
Forecasting and impairment tips for an unprecedented time:
FASB proposes goodwill evaluation relief for some private companies, NFPs – evaluating triggering events in interim financials
IRS announces a delay in processing Form 7200 Advance Payment of Employer Credits:
- Employers will experience a delay in receiving payments associated with Form 7200, Advance Payment of Employer Credits, processed between late-December and mid-January due to standard end-of-year close out. The IRS will continue to accept and process valid Forms 7200 during this time, and the payment of valid requests during this time will begin to be processed on January 21, 2021. Employers will still receive Letter 6312, Form 7200 Response, if the Form 7200 cannot be processed.
When taxpayers get ready to file their federal tax return there are new things to consider when it comes to which credits to claim and what deductions to take. These things can affect the size of any refund the taxpayer may receive.
The Bay Area region as a whole on Wednesday dropped below 15% remaining ICU capacity and will be under the state’s stay-at-home order effective just before midnight Thursday.
The CARES Act (Section 1112) authorized SBA to pay lenders 6 months of principal, interest, and fees on behalf of borrowers with loans under the 7(a) and 504 programs and Microloans. On December 8, the SBA released an Informational Notice clarifying the tax treatments of these payments. Payments are taxable income to the borrower and should be reported by the lender on Form 1099-MISC, Box 3. Borrowers can continue to deduct interest and fees.
- SBA Information Notice – Tax Issues Relating to the Payments Made on Behalf of Borrowers under Section 1112 of the CARES Act
The Port of San Francisco Micro-LBE Hardship Emergency Loan Program will provide zero-interest loans of up to $25,000 for eligible Port contractors, subcontractors/subconsultants, and tenants. This program is a collaboration between the Port of San Francisco and service provider Main Street Launch.
- Applications are due by Friday, December 18 at 11:59PM: Micro-LBE Emergency Loan Program
PPP FAQ Updated December 9 – As previously announced, SBA is reviewing all loans of $2 million or more, and other loans as appropriate, for eligibility, fraud or abuse, and compliance with loan forgiveness requirements. As part of this process, SBA is providing a Loan Necessity Questionnaire to lenders for them to provide to PPP borrowers that, together with their affiliates, received loans of $2 million or more. Upon request from their lender, borrowers should return the completed questionnaire to their lender within 10 business days of receipt.
- The questionnaire asks for financial data for periods after the loan was received but the SBA notes–This certification is required to have been made in good faith at the time of the loan application, even if subsequent developments resulted in the loan no longer being necessary. In its review, SBA may take into account the borrower’s circumstances and actions both before and after the borrower’s certification to the extent that doing so will assist SBA in determining whether the borrower made the statutorily required certification in good faith at the time of its loan application.
- Q53: Paycheck Protection Program Loan Frequently Asked Questions
The Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac will extend several loan origination flexibilities until January 31, 2021. The flexibilities were set to expire on December 31, 2020.
Federal unemployment benefits set to expire soon – Federal unemployment payments that have been available for workers who don’t qualify for regular state unemployment benefits and for those who run out of all of their state benefits are set to expire after December 26, 2020.
Lake Tahoe is shutting down to tourists on Friday, December 11, and will remain closed for at least three weeks:
Bay Area Playgrounds Reopening After State Changes Course:
In March 2020, Mayor Breed extended the deadline for businesses to pay their 2020 Unified License Fee from April 30, 2020 to March 1, 2021. Given the pandemic’s continued impact on businesses, Mayor Breed announced the deferral of the Unified License Fee for 2020 will further extend until October 31, 2021. To provide additional relief and time, the Unified License Fee for 2021 will also be deferred from March 1, 2021 to October 31, 2021.
- Mayor London Breed Announces New Measures to Financially Support Local Small Businesses During the COVID-19 Pandemic
San Francisco is launching the San Francisco Latino Small Business Fund, which includes $3.2 million to expand the San Francisco Hardship and Emergency Loan Program (SF HELP) that will provide zero interest loans of up to $50,000 to approximately 80 small businesses. The funds are intended to mitigate the impacts of COVID-19 on Latino-owned businesses and small businesses in neighborhoods that serve the Latino community.
- Loan Inquiry Form will be open until 11:59pm on January 14, 2021: Latino Small Business Fund
San Francisco locally owned businesses that either hold or have applied for a Shared Spaces permit are eligible to receive up to $5,000 in reimbursement from the City, which will help businesses that have been forced to close outdoor operations as a result of the recent Stay at Home Order and prepare for an eventual reopening.
The California Department of Tax and Fee Administration (CDTFA) has implemented Governor Newsom’s request for sales tax payment and filing relief:
- Taxpayers’ returns due between December 1, 2020, and April 30, 2021, for all but the largest taxpayers, will be extended. Taxpayers reporting less than $1 million in tax on a return originally due during this timeframe are not required to seek an extension from CDTFA; relief will be provided automatically. Additionally, for these taxpayers, interest and penalties will not accrue on return amounts due, provided payments are made and returns are filed within three months of the original due date.
- Fourth quarter 2020 and first quarter 2021 returns, for all but the largest taxpayers, will be extended and are now due April 30, 2021, and August 02, 2021, respectively. For taxpayers required to make monthly prepayments against their fourth quarter tax and fee obligations, the October prepayment remains due on November 24, 2020. The November prepayment that is normally due on December 24 is now due on March 24, 2021.
- Annual filers scheduled to file returns in January 2021 or April 2021, the filing deadlines will be extended and are now due April 30, 2021, and July 15, 2021, respectively.
- Return due dates for taxpayers reporting less than $1 million in tax on their return that file on a monthly basis with an original due date between December 1, 2020, and April 30, 2021, have been extended for three months. Interest and penalties will not accrue provided the returns are filed and amounts due are paid within three months of the original due date. Taxpayers below the $1 million threshold are not required to seek an extension from CDTFA; relief will be provided automatically. The due date for monthly filers’ October 2020 return remains November 30, 2020.
- Taxpayers with a liability of $1 million or more must request an extension if they are unable to file and pay by their due date. These requests are evaluated on a case-by-case basis and they will be notified if their extension has been approved or denied.
- Effective December 1, 2020, small business taxpayers with less than $5 million in taxable annual sales, can take advantage of a 12-month, interest-free, payment plan for up to $50,000 of sales and use tax liability only. All payment plans must be paid in full by April 30, 2022, to qualify for zero interest. Businesses with $5 million or more in annual taxable sales in sectors particularly impacted by operational restrictions due to the pandemic may also apply for this 12-month interest-free payment plan. Please note: This relief only applies to sales and use tax due on returns with original due dates between December 1, 2020 and April 30, 2021. A business that previously took advantage of the 12-month, interest-free payment plan that must be paid in full by July 31, 2021, may also request to participate in this new 12-month interest-free payment plan.
- Small Business Relief Payment Plans for Sales and Use Tax
The IRS is warning people to be aware of a new text message scam. The thief’s goal is to trick people into revealing bank account information under the guise of receiving the $1,200 Economic Impact Payment.
Some Bay Area counties (Alameda, Contra Costa, Marin, Santa Clara, San Francisco and the City of Berkeley) voluntarily implemented the State’s Regional Stay at Home order to significantly reduce gatherings and additional activities in an effort to stabilize COVID-19. The order went into effect Sunday, December 6 at 10PM, and will remain in place until January 4:
To assist taxpayers during the COVID-19 pandemic, Congress enacted legislation permitting businesses to elect to carry back net operating losses (NOLs) arising in 2018, 2019, or 2020 five years.
Updated FAQs: Employee Retention Credit under the CARES Act – Special Issues for Employers: Taxation and Deductibility of Tax Credits
The eBay Up & Running Grant Program will make grants of $10,000 (including cash, eBay credits, coaching through eBay Seller School, and more) to eBay small business sellers.
- Applications are due by Friday, December 11: eBay Up & Running Grant Program
California is developing a new $500 million COVID Relief Grant program for small businesses impacted by the pandemic. The program would provide grants of up to $25,000 to small businesses and nonprofits. The funds would be distributed through community development financial institutions and could arrive by early next year, according to the governor’s office.
San Mateo and San Francisco Counties rolled back to the most restrictive Purple Tier, which means there are new restrictions for retail and restaurants.
Santa Clara County officials announced new changes to existing directives. The newest and most strict addition to restrictive measures strongly discourages leisure and non-essential travel, and requires persons entering the county to quarantine for 14 days upon return from travel of more than 150 miles.
- County of Santa Clara Public Health Department Announces Revisions to the Health Officer’s Mandatory Directives Amid Steeply Rising Cases and Hospitalizations
The IRS issued new FAQs to address eligibility to claim the Employee Retention Credit when an entity acquires a target Company that has participated in the PPP Loan program. Under provisions of the CARES Act, a PPP borrower cannot claim the Employee Retention Credit but special rules will apply for M&A activity.
- COVID-19-Related Employee Retention Credits: Interaction with Other Credit and Relief Provisions FAQs
The IRS reviewed its collection activities to see how it could provide relief for taxpayers who owe taxes but are struggling financially because of the pandemic. The agency is expanding taxpayer options for making payments and other ways to resolve tax debt.
The California Rebuilding Fund will begin accepting applications today (November 20). Loans of up to $100,000 are available and early applications are encouraged.
Gavin Newsom issued a limited stay-at-home order due to the rise in COVID-19 cases. Non-essential work and gatherings must stop from 10pm to 5am in counties in the most restrictive purple tier. This will take effect at 10pm on Saturday and remain for 1 month.
Santa Clara County’s Commercial Tenant Eviction Moratorium has been further extended through March 31, 2021. Once the moratorium expires, all tenants will have up to six months to repay at least 50% of the past-due rent and a further six months to completely pay all past-due rent they owe. The County requires a landlord to inform a tenant of their repayment rights under the moratorium before starting a repayment plan with the tenant.
- Santa Clara County’s Commercial Tenant Eviction Moratorium Has Been Further Extended Through March 31, 2021
The SBA announced the updated interest rates for the 504 Loan Program offered by Certified Development Companies (CDC). The program now allows for 10, 20, and 25-year interest rates at 2.231 percent, 2.364 percent, and 2.399 percent, respectively. Small businesses can now apply for a 504 loan at these low-interest rates.
California has released guidance for people traveling into and out of the state:
Santa Clara County will be moved to the State’s Red Tier beginning Tuesday, November 17, requiring the closure of indoor dining and imposing limits on certain other high-risk activities:
- Santa Clara and Other Bay Area Counties Move to Contain Spread of COVID-19
- Additional Bay Area counties moving to more restrictive tiers
The California Rebuilding Fund has been created to aggregate funding from private, philanthropic, and public sector sources – including an anchor commitment from IBank – to address the capital and advisory needs of California’s small businesses as they re-open and recover from COVID-19. The California Rebuilding Fund is intended to serve the smallest of small businesses that make up an essential part of the California economy.
- Loans to the small businesses could have a 5-year term with a 4.25 percent interest rate, with an interest-only period for the first 12 months and fixed monthly payments for the remainder of the term (these are preliminary terms and subject to change as the Fund is being created, but the goal will be prime +1).
- Small businesses are eligible if they have 50 or fewer full-time employees and less than $2.5 million in annual revenue and meet the Fund’s standard underwriting guidelines.
- Apply here: California Rebuilding Fund
- Webinar with additional details is scheduled for Tuesday, December 1 at 3PM: California Rebuilding Fund Webinar Registration
Salesforce has launched the San Francisco Small Business Grants program to make grants of $10,000 to qualifying small businesses located in San Francisco. Eligible businesses must be for-profit entities; have 2-50 employees; have been in business since at least November 2019; and have annual revenues between $25,000 and $2 million.
- Applications are due by Wednesday, November 25 at 11:59PM: San Francisco Small Business Grants
The Silicon Valley Heritage EXPO on November 20 is an on-line digital event designed to stimulate commerce while showcasing the best of the area’s diverse cultures through food, arts and crafts, entertainment, and business. The event incorporates a marketplace to generate commerce for the region’s small businesses (free to the first 500 businesses).
The IRS reminds taxpayers how the CARES Act changes deducting charitable contributions.
- Note: the $300 deduction allowed for taxpayers that do not itemize is per return, not per taxpayer.
- How the CARES Act changes deducting charitable contributions
To support homeowners and mortgage lenders, the FHFA has approved an extension of the current temporary policy that allows for the purchase of certain single-family mortgages in forbearance that meet specific eligibility criteria as set by Fannie Mae and Freddie Mac. The policy is extended for loans originated through December 31, 2020.
Mayor London Breed announced a $3.5 Million expansion of the San Francisco Hardship and Emergency Loan Program (SF HELP). The program will provide zero interest loans of up to $50,000 to approximately 80 small businesses as San Francisco continues on the road to economic recovery.
- Loan inquiry forms are due by Wednesday, November 25: San Francisco Hardship and Emergency Loan Program (SF HELP)
Due to an increase in COVID-19 cases, San Francisco will roll back the reopening of indoor dining, reduce capacity of fitness centers and movie theaters beginning Saturday, November 14, and will pause approval of plans for indoor instruction for high schools.
SF Shines for Reopening Program – Businesses in certain San Francisco neighborhoods can get up to $5,000 reimbursed for their storefront’s COVID-19 safety measures, such as barriers and furniture.
Contra Costa and Santa Cruz counties have fallen back to the more restrictive red reopening tier:
Emergency Rental Assistance applications for Santa Clara renters are due by November 14, 2020:
The Treasury Department has indicated it will “shortly” be issuing guidance related to the deductibility of expenses paid with PPP funds. Guidance is expected to take the position that at year-end, if a borrower has a “reasonable expectation” of forgiveness, expenses would not be deductible. This guidance would apply even if the borrower did not apply for forgiveness until the following tax year.
- Congress may act to overrule the IRS’s position and allow the deduction of expenses.
- Precedent exists to take a position contrary to the expected Treasury guidance.
The IRS is warning taxpayers of a new text scam created by thieves that trick people into disclosing bank account information under the guise of receiving the $1,200 Economic Impact Payment.
The IRS urged any eligible self-supporting college student who doesn’t need to file a tax return to register by November 21 so they can receive an Economic Impact Payment before the end of the year.
- Many college students may still qualify for an Economic Impact Payment; review the guidelines and register by Nov. 21 at IRS.gov
San Francisco Restaurants, gyms, and personal services must post a checklist of their ventilation methods.
SBA will be “reviewing” PPP loans over $2 million. Part of the review will evaluate the borrower’s “need” for the loan. To assist with this process, the SBA has announced two new PPP forms: Form 3509, Paycheck Protection Program Loan Necessity Questionnaire (For-Profit Borrowers); and Form 3510, Paycheck Protection Program Loan Necessity Questionnaire (Non-Profit Borrowers). The forms will be sent to borrowers with loans totaling more than $2 million, and ask a number of questions to establish the borrower’s need for the PPP funds.
IRS has issued guidance to employers for reporting employee social security tax deferred under President Trump’s August Executive Order. Employers will need to prepare amended W2’s for tax year 2020 when the deferred tax is withheld in 2021. IRS has revised Form 940 to account for payment of the deferred withholding.
The IRS announced a new program, the Taxpayer Relief Initiative, to help taxpayers who are unable to pay their taxes because of the pandemic.
The Federal Reserve Board announced changes designed to make Main Street Lending Program loans available to smaller businesses and not-for-profits. The board reduced the minimum loan amount on three of the five Main Street loan facilities from $250,000 to $100,000. To encourage provision of the smaller loans, the board waived transaction fees for all loans under $250,000.
COVID-19 and withdrawals from retirement plans – Taxpayers under financial duress caused by the pandemic can avoid penalties.
Deducting losses in the CARES Act’s window. Current losses can temporarily be carried back for a quick refund.
The San Mateo County Board of Supervisors launched the Small Property Owner Assistance Program to make grants of up to $6,000 to eligible property owners who have been impacted by the COVID-19 pandemic.
- Applications are due by Friday, November 6: Small Property Owner Assistance Program
FASB’s staff published an educational paper that provides guidance to borrowers on how to account for debt modifications and restructurings, which have been common this year as a result of the coronavirus pandemic.