COVID-19 Provisions

6/5: President Trump signed into law the Paycheck Protection Program Flexibility Act of 2020 on Friday, June 5th. This law updated some of the key structural elements of the Paycheck Protection Program (PPP) to allow more businesses to receive full forgiveness of the funds received from the program. Continue reading…

5/14: Treasury issued a significant amount of new information on Wednesday, May 13th. In addition to updating their FAQs over the Paycheck Protection Program (PPP), they also issued a new Interim Final Rule dealing with potential Loan increases. Continue reading…

5/13: In recent weeks, Treasury and the SBA have been requesting that companies receiving funds under the Paycheck Protection Program (PPP) review their certification that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Treasury then gave borrowers until May 14, 2020 to return funds, if they believe that the certification was not made in “good faith”. Continue reading…

5/11: In response to the shortage of Personal Protective Equipment (PPE) and other hygiene products such as hand sanitizer caused by the coronavirus pandemic, many companies are pivoting resources toward the manufacture of these much needed products. For companies that have made this change, there may be an opportunity for some of the related expenses to qualify for the Research and Experimentation Tax Credit (R&E Tax Credit). Continue reading…

5/7: The most publicized part of the Coronavirus Aid Relief and Economic Security Act (CARES act), was the Paycheck Protection Program (PPP). This program was designed to help small businesses survive the shutdown and economic uncertainty generated by the Coronavirus. However, the program has been saddled with bad press and implementation issues from the beginning. Continue reading…

5/6: Under the CARES Act, Congress appropriated $349 billion in loans to small businesses under the Payment Protection Program (PPP). When this funding was quickly exhausted, an additional $320 billion in funds was appropriated; which, at the time of writing, appears will be allotted quickly as well. While a third round of funding may or may not become available, there are additional programs and tax provisions that companies should be aware of to use instead of or in conjunction with PPP loans. Continue reading…

5/5: On Thursday April 30th, the IRS issued Notice 2020-32. The notice was prepared to answer how to handle the deductibility of expenses paid for with Paycheck Protection Program (PPP) proceeds. Under Notice 2020-32, the IRS confirms expenses used for forgiveness of a PPP loan could not also be taken as a deduction. Many are asking, Was this the intention of the law? Continue reading…

5/4: The CARES Act contains a variety of advantageous tax provisions to aid taxpayers affected by COVID-19. One of the lesser known provisions of the CARES Act is the refund acceleration for Alternative Minimum Tax (AMT) Credits. The Tax Cuts and Jobs Act of 2017 (TJCA) abolished the Corporate AMT and allowed corporate taxpayers to use AMT Credits against regular federal income tax liability. Continue reading…

5/1: On Thursday April 30th, the IRS issued Notice 2020-32 to provide clarity as to how to handle the tax effect of Paycheck Protection Program (PPP) funds. As most people are now aware the PPP provides funding based on 2.5 months of the prior year’s payroll. Continue reading…

4/24: The Senate recently voted to increase the funding for the Paycheck Protection Program, in doing so exposed some of the issues relating to the program. One key issue: timing. The importance on timing flows to some of the tax provisions in the law as well. In drafting the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) many tax provisions were added to ensure businesses could maximize cash flow in the short term. Continue reading…

4/22: Late on Tuesday, the Senate approved an increase in funding to the Paycheck Protection Program (PPP). As previously reported the initial funding for the PPP ran out last week, and more funding was required in order to keep this program afloat. The Paycheck Protection Program and Health Care Enhancement Act provides additional funding for both the PPP and the Economic Injury Disaster Loan (EIDL) programs. Continue reading…

4/18: Under the Tax Cuts and Jobs Act of 2017 (TCJA) Qualified Improvement Property (QIP) was intended to be a 15-year lived asset eligible for bonus depreciation, but due to a drafting error was erroneously given a 39-year life and was ineligible for the bonus treatment. Under the Coronavirus, Aid, Relief and Economic Security Act (CARES Act) Congress addressed this drafting error making QIP placed in service after 12/31/2017 eligible for bonus depreciation. Continue reading…

4/16: On April 16th the SBA posted on their website that they could not “accept new applications at this time for the Paycheck Protection Program or the Economic Injury Disaster Loan (EIDL)” programs based on a lack of appropriations. In other words, the programs quickly ran through the funding offered in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). While Congress, Treasury, and the President are negotiating additional appropriations above the initial funding of $349 Billion, it begs the question, what do businesses do now? Continue reading…

4/15: Typically when we have a major tax law change we have time to digest and discuss issues associated with the change. With the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) moving at such a rapid pace we have not fully digested some of the tax provisions. The importance of the Paycheck Protection Program and the Economic Injury Disaster Loans have rightfully sifted focus away from the Tax Provisions in the Law. Continue reading…

4/14: The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides new emergency loan funding options for small businesses in the United States via the Small Business Administration (SBA). This funding can be applied for and approved on a case-by-case basis. Continue reading…

4/13: Title IV of the Coronavirus Aid, Relief, and Economic Security (CARES) Act provides $500 billion to the Treasury’s Exchange Stabilization Fund and this includes at least $454 billion to be used for loans, loan guarantees, and investments for eligible businesses, states, and municipalities. Within this fund is a program for direct, low-interest loans for Midsize Businesses. This funding can be applied for and approved on a case-by-case basis. Continue reading…

4/6: COVID-19 has prompted state by state related programs for employers and employees. Review summaries of programs from states below including eligibility requirements, how to access the programs, and anticipated benefits. State and local programs:

Alabama
Georgia
Illinois
Kentucky
Michigan
Ohio
Tennessee