Under the Consolidated Appropriations Act of 2021, which was signed into law by President Trump on December 27, 2020 (the “Act”), significant changes were made the employee retention tax credit (“ERC”) enacted under the CARES Act. Originally, companies were forced to choose between receiving a PPP loan or taking the ERC. As a result, the
The Internal Revenue Service (“IRS”) has recently released guidance regarding methods for reporting partnership tax capital accounts. Partnerships & limited liability companies filing Form 1065 for tax year 2020 must calculate partner capital accounts using the transactional approach for the tax-basis method. According to IRS data, most partnerships already use the tax basis method, but
Taxpayers who reasonably expect their Paycheck Protection Program (PPP) Loans to be forgiven cannot deduct otherwise eligible expenses in 2020 if they used their PPP loan to pay the expenses. Background & More Information On April 30, 2020, the Internal Revenue Service (IRS) issued Notice 2020-32, providing that a taxpayer that receives a PPP Loan
This year has been an unprecedented year for us all, and we have faced unforeseen challenges in the wake of the pandemic. To attempt to alleviate a portion of the financial impact from the pandemic, the government passed the Coronavirus Aid, Relief & Security Act (the “CARES Act”) and continued to implement the taxpayer friendly
Deduction Limitation for Expenses Paid with PPP Funds: The IRS issued additional guidance on Wednesday, November 18, 2020, which expands on their prior position that otherwise deductible expenses that are paid using PPP loan funds are not deductible[1]. Revenue Ruling 2020-27 provides that if you received a PPP loan in 2020 and expect the loan
On Tuesday, October 13, 2020 the U.S. Small Business Administration (SBA) released guidance confirming that the Paycheck Protection Program (PPP) loan forgiveness applications are not due on October 31st, 2020 as originally stated on the loan forgiveness application forms. Instead, anyone who received a PPP loan may submit a loan forgiveness application any time before
President Trump announced four executive orders on Saturday, August 8th, 2020. One of the Orders included a payroll tax holiday that will start September 1st, and go through December 31st, 2020. The President directed the Secretary of the Treasury to defer the withholding deposit, and payment of Social Security taxes. Typically, employees and employers each
Every year the Internal Revenue Service (“IRS”) announces a list of twelve of the worst tax scams that taxpayer may encounter that year, it is referred to as the Dirty Dozen. This year’s list contains a special emphasis on scams related to Coronavirus tax relief. Taxpayers are encouraged to look out for these scams throughout
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The Paycheck Protection Program Flexibility Act was signed into law on June 5, 2020. The act contains the following provisions that will change how PPP borrowers can maximize forgiveness of their loans. 1. Repayment Period Extension For new PPP loans, the repayment period has been extended from two years to five years from the date
