News and Ideas to Keep Your Business on
The Cutting Edge
|
|
Taxability of PPP Forgiveness
Many businesses received a Payroll Protection Plan (PPP) loan with the expectation that the amount forgiven will be tax-free income. The rules are clear that the amount forgiven is tax-free, but that is only half the story. The payroll, rent and other expenses used in the forgiveness calculation are not deductible. The end result is that any PPP forgiven will be taxable income. The head of the AICPA Tax Executive Committee put it this way: “Why waste the ink to say that for purposes of the [IRS] code, the loan forgiveness is not includible in income, if the government will just take away deductions in the same amount. Denying deductions of expenses forgiven under the PPP program is contrary to Congress’s intent."
Allowing expenses used for forgiveness is on the table for the next stimulus package, but the longer we wait for the next round of stimulus, the more skeptical many become that a change will be made. What should PPP recipients do now? We would suggest that you keep money to the side and be ready to pay the tax on the PPP forgiveness and hope that Congress comes through.
(Source: Davies, Goldstein & Associates, CPA's Newsletter, Nov., 2020)
|
|
NLBMDA Submits Comments on Proposed DOL Independent Contractor Rule
In late October, National Lumber and Building Material Dealers Association (NLBMDA) submitted comments to the Department of Labor (DOL) on their recently proposed rule to clarify the definition of employee under the Fair Labor Standards Act (FLSA) as it relates to independent contractors. The proposal aims to bring clarity and consistency to the determination of who is an independent contractor under the Fair Labor Standards Act.
NLBMDA supports efforts by the DOL to clear up uncertainty surrounding the status of independent contractors and urged the Department to allow employers and workers to have the freedom and flexibility to engage in work arrangements that meet the specific needs and preferences of all parties involved.
(Source: NLDBMA E-Update, Nov., 2020)
|
|
Social Security Increases for 2021
- Social security payments will increase 1.3% for 2021. This increase is based on the increase in the Consumer Price Index from the 3rd quarter of 2019 through the 3rd quarter of 2020.
- The social security wage limit will increase by $5,100 from $137,700 up to $142,800. This increase means that employees earning more than $142,800 will pay an extra $316 in 2021 ($5,100 x 6.2% FICA rate).
- There is also an increase in earnings before you lose any benefits. In 2021 individuals 62-65 years old can earn up to $18,960 before losing any benefits.
(Source: Davies, Goldstein & Associates, CPA's Newsletter, Nov., 2020)
|
|
Federal Reserve Reduces Minimum Loan Size for Main Street Lending Program
Recently, the Federal Reserve Board adjusted the terms of the Main Street Lending Program to provide more targeted support to small and medium-sized businesses. The minimum loan size for three Main Street facilities available to for-profit and non-profit borrowers has been reduced from $250,000 to $100,000 and the fees have been adjusted to encourage the provision of these smaller loans. More information on how to apply for a loan through the Main Street Lending Program can be found here.
The Board and Department of the Treasury also clarified that Paycheck Protection Program (PPP) loans of up to $2 million may be excluded for purposes of determining the maximum loan size under the Main Street Lending Program, if certain requirements are met.
The Main Street Lending Program supports lending to small and medium-sized for-profit businesses and nonprofit organizations that were in sound financial condition before the COVID-19 pandemic but lack access to credit on reasonable terms. To allow borrowers time to recover from the pandemic, the program offers several five-year loan options, with deferred principal and interest payments for qualified businesses and nonprofits. Loan documents reflecting the new terms are expected to be available to registered lenders within the next week.
To date, the Main Street Lending Program has made almost 400 loans totaling $3.7 billion. The program was established with the approval of the Treasury Secretary and with $75 billion in equity provided by the Treasury Department from the CARES Act.
(Source: NLDBMA E-Update, Nov., 2020)
|
|
Ohio BWC Board Approves $5 Billion Dividend For Ohio Employers
The Ohio Bureau of Workers' Compensation (BWC) Board of Directors approved Governor Mike DeWine’s request to send $5 billion in dividends to Ohio employers to ease COVID-19’s continued impact on the state’s business community and workforce.
This is BWC’s third dividend in 2020, bringing total dividend dollars for employers to nearly $8 billion this year, all at the request of Governor DeWine. “This is about keeping businesses open and people employed,” Governor DeWine said in announcing his proposal.
BWC will apply the dividend to an employer’s unpaid balances first, then send a check for the remainder in mid-December. The agency issued a $1.54 billion dividend in late April and $1.34 billion in October. At $5 billion, the latest dividend is approximately four times the total premiums BWC collected from its employer members in policy year 2019.
Read the full press release here.
(Source: Ohio BWC Press Release, Nov., 2020)
|
|
School is Open – Opt to Stay Home on FFCRA Leave?
Question
Does an employee, who has opted to stay home with her school aged child, who chose to virtually learn, when the school is open, and the other 2 children are in school, still qualify for extended leave under the Emergency Families First Coronavirus Response Act?
Answer
No, you are not eligible to take paid leave under the FFCRA because your child’s school is not 'closed' due to COVID–19 related reasons; it is open for your child to attend. FFCRA leave is not available to take care of a child whose school is open for in-person attendance. If your child is home not because his or her school is closed, but because you have chosen for the child to remain home, you are not entitled to FFCRA paid leave. However, if, because of COVID-19, your child is under a quarantine order or has been advised by a health care provider to self isolate or self-quarantine, you may be eligible to take paid leave to care for him or her.
(Source: Federated Insurance HR Question of the Month, Oct. 2020)
|
|
Toolbox Talks
BMSA's most requested safety service!!
|
BMSA's Toolbox Talk Safety Program is an annual subscription that includes everything you need to conduct a year's worth of safety meetings:
- 12 Industry specific, 1-page handouts
- Manager instruction/resource page for regulatory support
- Sign in sheets to satisfy documentation requirements
- 3-Ring binder to keep it all together
Special 2020 Introductory Offer: $199
Annual renewals $225
(2021 pricing: $250 for series 1)
|
|
|
|
|
|
|
|
|
