Tax Alert- Employers should be wary of ERC claims that are too good to be true (January 11, 2023) The Employee Retention Credit (ERC) was a valuable tax credit that helped employers that kept workers on staff during the height of the COVID-19 pandemic. While the credit is no longer available, eligible employers that haven’t yet claimed it might still be able to do so by filing amended payroll returns for tax years 2020 and 2021.

Accounting & Audit Alert- Are you ready for the new disclosure requirements for government assistance? (March 1, 2022) Starting in fiscal year 2022, all entities — except nonprofit organizations in the scope of Topic 958, Not-for-Profit Entities, and employee benefit plans — must provide detailed disclosures about government assistance. Here are the details of the new rules.

Accounting & Audit Alert- 10 financial statement areas to watch for COVID-related effects (October 11, 2021) The COVID-19 pandemic is still adversely affecting many businesses and not-for-profit organizations, but the effects vary, depending on the nature of operations and geographic location. Has your organization factored the effects of the pandemic into its financial statements? You might not have considered this question since last year if your organization prepares statements that comply with U.S. Generally Accepted Accounting Principles only at year end.

Emerging Tax Alert- SBA streamlines forgiveness for smaller PPP loans (August 4, 2021) The Small Business Administration (SBA) has released new guidance intended to expedite the forgiveness process for certain borrowers under the Paycheck Protection Program (PPP). The simplified process generally is available for loans of $150,000 or less, which the SBA reports account for 93% of outstanding PPP loans. The guidance comes at a time when many borrowers are nearing a critical deadline regarding their applications for forgiveness.

Accounting & Audit Alert- Liabilities for unused time off mount as pandemic lingers (May 3, 2021) During the pandemic, many employees have postponed using their allotted paid time off until COVID-related restrictions are lifted and safety concerns subside. This situation has caused an increase in accruals for certain employers. Here’s some guidance to help evaluate whether your company is required to report a liability for so-called “compensated absences” and, if so, how to estimate the proper amount.

Accounting & Audit Alert- Updated guidance for impairment testing: When to consider triggering events (April 5, 2021) On March 30, the Financial Accounting Standards Board (FASB) published an updated accounting standard on events that trigger an impairment test under U.S. Generally Accepted Accounting Principles (GAAP). This simplified alternative may provide relief to private companies and not-for-profit entities that have been adversely affected by the COVID-19 pandemic.

Emerging Tax Alert- Extended tax filing deadline provides relief to individual taxpayers and the IRS (March 18, 2021) The IRS has announced that the federal income tax filing deadline for individuals for the 2020 tax year is extended from April 15, 2021, until Monday, May 17, 2021. The IRS extended the deadline to provide relief to taxpayers facing challenges as a result of the pandemic and because it’s grappling with a rising backlog of 24 million unprocessed returns. As part of its announcement, the IRS stated it would soon be issuing additional guidance about the deadline extension.

Emerging Tax Alert- The American Rescue Plan Act provides sweeping relief measures for eligible families and businesses (March 17, 2021) On March 11, 2021, President Biden signed into law the American Rescue Plan Act (ARPA). The $1.9 trillion law is intended to provide far-reaching relief from the economic and other repercussions of the ongoing COVID-19 pandemic. In addition to funding for testing, contact tracing, vaccinations, education, and state and local governments, the ARPA includes extensive relief that could directly impact your finances.

Marc Bello To Be Panelist for COVID-19 Part 2: Lessons learned in Family Law and Our Path Forward (March 16, 2021) On Tuesday, April 6, 2021, Business Valuation & Forensic Accounting Partner, Marc Bello, will be a panelist on, ‘COVID-19 Part 2: Lessons learned in Family Law and Our Path Forward’, an event put on by the Social Law Library.

Emerging Tax Alert- The American Rescue Plan Act has passed: What’s in it for you? (March 11, 2021) Congress has passed the latest legislation aimed at providing economic and other relief from the COVID-19 pandemic that has haunted the country for the last year. President Biden is expected to sign the 628-page American Rescue Plan Act (ARPA), which includes $1.9 trillion in funding for individuals, businesses, and state and local governments.

Accounting & Audit Alert- New law provides option to delay implementing the updated CECL standard (January 11, 2021) The Consolidated Appropriations Act (CAA), signed into law on December 27, 2020, includes a variety of economic relief measures. One such measure allows certain banks and credit unions to temporarily postpone implementation of the controversial current expected credit loss (CECL) standard.

Emerging Tax Alert- How can your business benefit from the Consolidated Appropriations Act? (January 7, 2021) The Consolidated Appropriations Act of 2021 (CAA) was signed into law in late December. The sprawling legislation contains billions of dollars in additional stimulus funding in response to the COVID-19 pandemic, as well as numerous unrelated provisions.

Emerging Tax Alert- The Consolidated Appropriations Act brings COVID-19 relief (and more) to individuals (January 6, 2021) President Trump signed into law billions of dollars in long-awaited COVID-19 and economic relief. The relief package is part of the nearly 5,600-page Consolidated Appropriations Act (CAA), which also contains numerous other tax, payroll and retirement provisions. Here are some of the provisions most likely to affect individual taxpayers.

Emerging Tax Alert – Congress passes COVID-19 aid package (December 23, 2020) After months of negotiations in Washington, an agreement has been struck on a new aid package to address the ongoing fallout from the COVID-19 pandemic. The legislation has been passed by both the U.S. House of Representatives and the U.S. Senate, and President Trump is expected to sign it soon.

Tax Guide- Relaxed limit on business interest deductions (December 10, 2020) In previous posts, we have mentioned the implications that the Tax Cuts & Jobs Act have on business interest deductions, along with the impact the CARES Act has on them. In the following post, we provide additional details with respect to the limitation on the business interest deduction and the favorable changes to the limitation that were introduced by the CARES Act.

Accounting & Audit Alert- How COVID-19 could impact year-end inventory counts (November 30, 2020) Many businesses are closed or are limiting third-party access as COVID-19 surges across the United States. These restrictions could still be in place at year end — a time when external auditors traditionally observe physical inventory counts for calendar-year entities. Here’s how you can identify and overcome the challenges associated with inventory counts during the pandemic.

Accounting & Audit Alert- Preparing for the possibility of a remote audit (November 9, 2020) The coming audit season might be much different than seasons of yore. As many companies continue to operate remotely during the COVID-19 pandemic, audit procedures are being adjusted accordingly. Here’s what might change as auditors work on your company’s 2020 year-end financial statements.

Scott Kaplowitch Contributes to Bloomberg Tax Article (November 3, 2020) Managing Partner, Scott Kaplowitch, was an author in the Bloomberg Tax article, “2020 May Hold Unpleasant Tax Surprises for Telecommuters.”

Massachusetts Announces Grant Program for Small Businesses (October 27, 2020) On Thursday October 22, 2020, Massachusetts Governor Charlie Baker announced $50.8 million in grants for small businesses as part of the state’s COVID-19 recovery plan.

Emerging Tax Alert- Year-end tax planning strategies must take business turbulence into account (October 26, 2020) Election years often lead to uncertainty for businesses, but 2020 surely takes the cake when it comes to unpredictability. Amid the chaos of the COVID-19 pandemic, the resulting economic downturn and civil unrest, businesses are on their yearly search for ways to minimize their tax bills — and realizing that some of the typical approaches aren’t necessarily well-suited for this year.

2020-2021 Tax Planning Guide Released (October 22, 2020) Do your tax strategies need a refresh? With individuals and businesses coping with the impact of the COVID-19 pandemic and some new tax laws going into effect, you probably have questions about tax planning this year. To save the most on your 2020 taxes, you need to plan carefully and take advantage of all deductions, credits and other breaks that current tax law allows.

Accounting & Audit Alert – How to report COVID-19-related debt restructuring (September 23, 2020) Today, many banks are working with struggling borrowers on loan modifications. Recent guidance from the Financial Accounting Standards Board (FASB) confirms that short-term modifications due to the COVID-19 pandemic won’t be subject to the complex accounting rules for troubled debt restructurings (TDRs). Here are the details.

Tax Alert- Tax implications of working from home (September 18, 2020) COVID-19 has changed our lives in many ways, and some of the changes have tax implications. Here is basic information about one common situation.

Accounting & Audit Alert- Reporting discontinued operations today (September 8, 2020) Many businesses have undergone strategic shifts during the pandemic. Here’s how to determine whether that change is within the scope of the accounting rules for discontinued operations and, if so, how to comply.

Emerging Tax Alert- The IRS issues guidance on the executive action deferring payroll taxes (September 2, 2020) On August 28, the IRS issued guidance that provides some explanation of how employers can defer withholding and remitting an employee’s share of Social Security tax when wages are below a certain amount. The guidance in Notice 2020-65 was issued to implement President Trump’s executive action signed in early August.

Multi-state residency due to the pandemic (September 1, 2020) Under ordinary circumstances you may become a statutory resident of a state if you are physically present in that state for 183 days or more. Meanwhile, your state of permanent domicile may not change, thereby creating a situation where you may be treated as a resident in multiple states.

With Virtual Learning on the Horizon, Does Your Home Have Enough Bandwidth? (August 27, 2020) With colleges, universities, high schools, middle schools and elementary schools all either started or starting soon, virtual learning seems to be incorporated throughout the educational system in some form. That means technology at home, if you have students, will become more in demand.

Emerging Tax Alert- Executive action deferring payroll taxes (August 11, 2020) On August 8, 2020, President Trump signed an executive memorandum that defers an employee’s portion of Social Security and Medicare taxes from September 1 through December 31, 2020.

New FAQs address PPP loan forgiveness issues– (August 5, 2020) The U.S. Small Business Association and Treasury shared 23 FAQ’s regarding the forgiveness of loans under the Paycheck Protection Program (PPP).

Accounting & Audit Alert- Reporting CAMs in the COVID-19 era– (August 3, 2020) Regardless of where you are in the implementation process, anticipating the CAMs that will appear in your auditor’s report may be especially challenging given the uncertainty caused by the COVID-19 crisis.

COVID-19 Webinar Recording – (July 15, 2020) Last month, Sapers & Wallack hosted a third Town Hall webinar regarding COVID-19 related topics.  Managing Partner, Scott Kaplowitch, was an expert panelist discussing the Paycheck Protection Program (‘PPP’) Loan and forgiveness.

Jason Pierce to be panelist on Boston Bar Association webinar – (July 10, 2020) On Friday, July 17, 2020, Jason Pierce will be an expert panelist on the Boston Bar Association’s webinar, Sophisticated Financial Issues in Divorce Matters and the Impact of COVID-19.

5-week PPP extension signed – (July 6, 2020) Over the weekend, President Trump signed a bill extending the Paycheck Protection Program (‘PPP’) application window by 5 weeks. This extension will allow a source of funding for small businesses to remain open until August 8th while Congress continues t

Senate approval of PPP extension – (July 1, 2020) On Tuesday night, the U.S. Senate unanimously passed a five-week extension of the Paycheck Protection Program (PPP), hours before the application window was set to close. Before the extension can take effect, it will need to be passed by the House of Representatives and signed by President Trump.

Tax Alert- What qualifies as a “coronavirus-related distribution” from a retirement plan? – (June 26, 2020) As you may have heard, the Coronavirus Aid, Relief and Economic Security (CARES) Act allows “qualified” people to take certain “coronavirus-related distributions” from their retirement plans without paying tax.

Scott Kaplowitch to be a panelist on upcoming webinar – (June 25, 2020) On Tuesday, June 30, 2020, Sapers & Wallack will be hosting a third Town Hall webinar in which panelists will share their latest insights around the SBA Paycheck Protection Program (“PPP”) and office re-opening best practices. Edelstein’s Managing Partner, Scott Kaplowitch, will address questions around PPP loan forgiveness and more.  He’ll be joined by other experts to discuss matters pertinent to attendees.

Accounting & Audit Alert – Asset impairment is expected to hit 2020 financial statements – (June 22, 2020) Some companies are expected to report impairment losses in fiscal year 2020 because of the COVID-19 crisis. Depending on the nature of your operations and assets, the pandemic could be considered a “triggering event” that warrants interim impairment testing.

Accounting & Audit Alert – Is it time to outsource finance and accounting? – (June 15, 2020) Outsourcing may appeal to organizations that are currently struggling with mounting overhead costs during the COVID-19 crisis. By outsourcing, you convert certain fixed overhead costs associated with compensating and supporting employees into variable costs that can be scaled back in an economic downturn — or dialed up in times of growth and transition.

Jason Pierce to present Business Accounting and Risk Mitigation during COVID-19 – (June 12, 2020) On Tuesday, June 16, 2020, Partner Jason Pierce will be presenting Business Accounting and Risk Mitigation during COVID-19 for the Business Lawyers Network.

Emerging Tax Alert – PPP borrowers get concessions, additional guidance on forgiveness – (June 5, 2020) The U.S. Senate has passed the bipartisan Paycheck Protection Program Flexibility Act of 2020, which loosens several of the Paycheck Protection Program’s (PPP’s) more onerous restrictions regarding loan forgiveness. President Trump has signed the bill into law.

Accounting & Audit Alert – Revenue recognition and leases: FASB gives certain entities more time – (June 1, 2020) Private companies and most nonprofits were supposed to implement updated revenue recognition guidance in fiscal year 2019 and updated lease guidance in fiscal year 2021. In the midst of the novel coronavirus (COVID-19) crisis, the Financial Accounting Standards Board (FASB) has decided to give certain entities an extra year to make the changes, if they need it.

Accounting & Audit Alert – Overcoming the challenges of remote auditing during the COVID-19 crisis – (May 26, 2020) Many people are currently working from home to help prevent the spread of the novel coronavirus (COVID-19). Your external auditors are no exception. Fortunately, in recent years, most audit firms have been investing in technology and training to facilitate remote audit procedures.

Technologies for returning to the office – (May 21, 2020) As plans continue to come together for offices to reopen after the COVID-19 pandemic, our IT Consultants have compiled the following ideas to share with you. During these times, there are technologies available to make returning to work safer for everyone.

Retirement and RMD Refresh – (May 19, 2020) In times like these, it helps to refresh what we know on two important topics: retirement planning and Required Minimum Distributions (“RMDs”).  Recent legislative developments and the COVID-19 pandemic response have created opportunities with these two topics.

Paycheck Protection Program Loan Forgiveness Application Released – (May 18, 2020) On May 15, 2020, the Small Business Administration (SBA), in consultation with the Department of the Treasury, released the Paycheck Protection Program (PPP) Loan Forgiveness Application.

PPP Guidance Update – (May 14, 2020) The Small Business Administration (SBA), in consultation with the Department of the Treasury, continues to provide additional guidance with respect to the implementation of the Paycheck Protection Program (PPP).  A list of Frequently Asked Questions (FAQs) has been created and is regularly updated to provide this guidance. On May 13, 2020, FAQ #46 was issued to address the good-faith certification concerning the necessity of a borrower’s loan request.

Accounting & Audit Alert – COVID-19: A reminder of why cross-training your accounting staff is key – (May 11, 2020) Is your accounting department prepared for the unexpected? Find out why cross-training is invaluable in situations such as the COVID-19 crisis and how to implement it.

PPP & CARES Act Webinar Recording – (May 8, 2020) Last week, our friends at Sapers & Wallack hosted a Town Hall webinar about the SBA Paycheck Protection Program (PPP) and The CARES Act. Managing Partner, Scott Kaplowitch, joined as a panelist to answer questions around the PPP.

Emerging Tax Alert – SBA extends the PPP repayment deadline for self-certification – (May 7, 2020) The Small Business Administration (SBA) has extended the repayment deadline for Payroll Protection Program (PPP) borrowers that wish to take advantage of the “good faith” self-certification of eligibility option. The deadline is now automatically extended from May 7, 2020, to May 14, 2020.

Tax Alert- Tax questions related to COVID-19 – (May 6, 2020) The coronavirus (COVID-19) pandemic has affected many Americans’ finances. Here are some answers to questions you may have right now.

Accounting & Audit Alert – Benchmarking: Why normalizing adjustments are essential – (May 4, 2020) Financial statements aren’t particularly meaningful without a relevant basis of comparison. There are two types of “benchmarks” that a company’s financials can be compared to — its own historical performance and the performance of other comparable businesses.

IRS Clarifies Question of Deductibility of Expenses that Lead to PPP Loan Forgiveness – (May 1, 2020) In regards to the Paycheck Protection Program (PPP), a question still remained as to whether or not a deduction would be allowed for otherwise deductible expenses funded by the forgivable portion of these loans.

Accounting & Audit Alert – Going, going, gone: Going concern assessments in the midst of COVID-19 – (April 27, 2020) The novel coronavirus (COVID-19) pandemic has adversely affected the global economy. Companies of all sizes in all industries are faced with closures of specific locations or complete shutdowns; employee layoffs, furloughs or restrictions on work; liquidity issues; and disruptions to their supply chains and customers. These negative impacts have brought the “going concern” issue to the forefront.

Scott Kaplowitch on NBC 10 Boston – (April 23, 2020) Our Managing Partner, Scott Kaplowitch, was asked to share his expertise around stimulus checks by NBC 10 Boston.

Tax Alert – Answers to questions you may have about Economic Impact Payments – (April 22, 2020) Millions of eligible Americans have already received their Economic Impact Payments (EIPs) via direct deposit or paper checks, according to the IRS. Others are still waiting. The payments are part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Here are some answers to questions you may have about EIPs.

Marc Bello presents Impact of COVID-19 on Business Valuations for Divorce Webinar – (April 21, 2020) On Wednesday, April 29, 2020, Business Valuation partner, Marc Bello, will be presenting the Impact of COVID-19 on Business Valuations for Divorce. The Greater Newburyport Bar Association has put together this webinar opportunity to share these important insights with you.

Accounting & Audit Alert – Adjusting your financial statements for COVID-19 tax relief measures – (April 20, 2020) The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020, contains several tax-related provisions for businesses hit by the novel coronavirus (COVID-19) crisis. Those provisions will also have an impact on financial reporting.

Scott Kaplowitch on WHDH Channel 7 News – (April 16, 2020) Managing Partner, Scott Kaplowitch, shared some helpful insights about stimulus checks on WHDH Channel 7 News Boston.

Emerging Tax Alert – The IRS announces new COVID-19 related assistance for taxpayers – (April 15, 2020) The IRS and U.S. Department of Treasury have announced new relief for federal tax payers affected by the coronavirus (COVID-19) pandemic.

Accounting & Audit Alert – Questions to ask when making COVID-19 risk disclosures – (April 13, 2020) Efforts to contain the spread of the novel coronavirus (COVID-19) have led to suspension of many economic activities, putting unprecedented strain on businesses. The Securities and Exchange Commission (SEC) recently issued guidance to help public companies provide investors and other stakeholders with useful, accurate financial statement disclosures in today’s uncertain marketplace.

Tax Alert- CARES ACT changes retirement plan and charitable contribution rules – (April 10, 2020) The Coronavirus Aid, Relief, and Economic Security (CARES) Act contains a variety of relief, notably the “economic impact payments” that will be made to people under a certain income threshold. But the law also makes some changes to retirement plan rules and provides a new tax break for some people who contribute to charity.

COVID-19 Relief Comparison Chart – (April 6, 2020) The volume of news and articles on coronavirus relief options is overwhelming for many business owners. It is difficult to understand which options are best or applicable to your company. Our COVID-19 Relief Comparison Chart details the loan programs, credits and provisions enacted in recent coronavirus legislation. Additionally, it specifies which provisions are mutually exclusive and which may be cross utilized.

Emerging Tax Alert – CARES Act provides COVID-19 pandemic relief to businesses – (March 31, 2020) The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) represents the third phase of Congress’s legislative efforts to address the financial and health care crisis resulting from the coronavirus (COVID-19) pandemic. In addition to providing relief to individuals and mustering forces to shore up the medical response, the CARES Act includes numerous provisions intended to help affected businesses, including eligible self-employed individuals, weather the crisis.

BREAKING: Massachusetts Filing Deadline Extension – (March 27, 2020) Earlier today, it was announced by Massachusetts government leaders that the state income tax filing deadline has been officially extended to July 15, 2020 for filing federal individual income taxes.

COVID-19 Business Update– (March, 25, 2020) Check out our COVID-19 Business Update which includes a summary of pressing topics to consider as you make business operation decisions resulting from the COVID-19 economic impacts and mandates.

Emerging Tax Alert- The IRS announces that income tax payments due April 15 can be deferred to July 15, regardless of the amount– (March, 23, 2020) The IRS and the U.S. Treasury Department have been making a series of announcements to provide tax relief in the wake of the coronavirus (COVID-19) pandemic. After previously announcing that taxpayers could defer making federal income tax payments up to certain limits for three months, the IRS has now announced that taxpayers can postpone payments without penalties or interest “regardless of the amount.”

Emerging Tax Alert- What you need to know about the Families First Coronavirus Response Act– (March 23, 2020) President Trump has signed into law the Families First Coronavirus Response Act. Among other things, the new law temporarily requires certain employers to provide expanded paid sick and family leave for employees affected by the coronavirus (COVID-19) pandemic. Employers’ increased costs will be offset by new tax credits, which also may be available to self-employed individuals.

BREAKING: Tax Filing Deadline Extended– (March 20, 2020) U.S. Treasury Department Secretary Steven Mnuchin announced that the 2019 income tax filing deadline will be moved to July 15, 2020 from April 15, 2020, because of the coronavirus (COVID-19) outbreak.

Update: COVID-19’s Impact on April 15th Tax Deadline– (March 19, 2020) We are constantly monitoring the federal government’s response to the coronavirus with respect to April 15th tax filings and payments.

90-Day Tax Payment Deferral– (March 17, 2020) As the news continues to evolve regarding COVID-19, we wanted to connect with you in an effort to keep you abreast of the changes. Earlier today, Treasury Secretary Steven Mnuchin announced that taxpayers who owe a payment to the IRS may defer that payment for 90 days. He shared that up to $1 million can be deferred by individuals and up to $10 million can be deferred by corporations, without interest and penalties charged on these deferred payments.

Emerging Tax Alert- House passes bill to provide coronavirus relief; Senate expected to act this week- (March 17, 2020) Several arms of the federal government have taken, or are weighing, significant steps to help the country deal with the spread of the coronavirus (COVID-19) and the implications for individuals and businesses.

Our continued response to COVID-19– (March 16, 2020) In compliance with Governor Baker’s press conference on Sunday evening, we are mandating that all employees work remotely at home starting on Tuesday, March 17th as safety and health is our greatest concern. There will also be limited, if any, in-person meetings in or out of our office.

Accounting & Audit Alert- Beware: Coronavirus may affect financial reporting– (March 16, 2020) The coronavirus (COVID-19) outbreak — officially a pandemic as of March 11 — has prompted global health concerns. But you also may be worried about how it will affect your business and its financial statements for 2019 and beyond.

Keeping you informed– (March 13, 2020) As you’re aware, the spread of COVID-19, also known as the Coronavirus, has impacted the United States, New England, and Massachusetts specifically. We wanted to take this time to communicate with you, our valued clients and friends of our firm.

Staffing Considerations

I. Understanding Termination vs. Furlough

a. Termination (“Lay Off”): Termination results in a permanent end to employment. Terminated employees are legally owed any wages for time worked and pay out of their vacation time accrued. While their termination includes loss of health insurance coverage, it does qualify them for COBRA insurance and unemployment benefits.

b. Furlough: Furloughs provide flexibility for employers who want to keep their staff employed during a temporary closure or reduced operations. Furloughs extend emotional assurance that employees will have a job after the mandated closures end. Benefits of a furlough include:

• Employees can be paid or unpaid
• Employees can stay on their employer health insurance plans
• Employees can still work, industry permitting, during a furlough
• Employees can apply for unemployment benefits during the furlough
• Employees may or may not accumulate PTO during a furlough, based on the specific policy plan.
• Employees can be mandated to exhaust their vacation time during a furlough. However, they cannot be mandated to use their sick time.

As an employer, you are not legally required to provide any written details of a furlough to staff but a memo is recommended provided the memo states details are subject to change.

II. Wage Relief Options

a. MA Unemployment during COVID-19

• Formerly, individuals were required to wait to apply for unemployment benefits until their first week of total unemployment. This waiting period is waived effective March 10, 2020 and will expire 90 days after the termination of the State of Emergency.
• The Executive Office of Labor and Workforce Development and Department of Unemployment Assistance filed emergency regulations that allow people impacted by COVID-19 to collect unemployment benefits if their workplace is shut down and expects to reopen within 4 weeks. This applies to all employees (full and part time) who are impacted by such shutdowns.
• Business owners who receive W-2 wages are also eligible to apply for unemployment benefits.
• Employers whose businesses are severely impacted by COVID-19 may request up to a 60-day grace period to file quarterly reports and pay contributions.

b. Massachusetts WorkShare Program:

WorkShare benefits are reduced Unemployment Benefits that are supplemented by reduced regular wages. The program helps employees retain their jobs and employers maintain productivity. However, there has been no COVID-19 leniency regarding the complicated application process. Please reach out to us if you would like to discuss further.

Financing Options

I. Available Opportunities

a. SBA Disaster Assistance Loans: The U.S. Small Business Administration (SBA) created a relief plan to help small businesses affected by Coronavirus by offering affordable loan options up to $2 million. The Disaster Assistance Loans for Small Businesses program (https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/sba-provide-disaster-assistance-loans-small-businesses-impacted-coronavirus-covid-19) offers interest rates of 3.75% for small businesses without credit available elsewhere, and interest rates of 2.75% for nonprofits. The SBA offers long-term repayment options on these loans of up to 30 years. Businesses with credit available elsewhere are not eligible for these loans. To find out if these loan options are available in your region and your business is eligible, visit: https://disasterloan.sba.gov/ela/ for more information.

b. Facebook Small Business Grant Program: Facebook is making $100 million in cash grants and ad credits available to small businesses in over 30 countries. The grant money can be used to cover operational costs, take care of employees, pay rent, and more. Facebook says it will start taking applications in the coming weeks, and businesses can sign up for updates on their grant page. Visit https://www.facebook.com/business/boost/grants?ref=alias for more information.

II. Opportunities Pending Proposed Legislation

The Senate introduced the CARES Act (S. 3548) on March 19, 2020 and it is currently in negotiations. While the CARES Act covers several areas, provisions relevant to businesses include several options:

a. Forgivable loans for small businesses would potentially cover payroll, leave, mortgage, and other related expenses. The loans would only have to be repaid if funds are spent on other activities, and otherwise convert to grants if spent on the aforementioned expense categories.

b. Businesses would receive loan forgiveness in an amount equal to the expense categories mentioned above for the covered period of March 1, 2020 to June 30, 2020. This would be conditional upon the business retaining their employees and payroll levels during the covered period.

c. The amount of the loan eligible for forgiveness will be reduced proportionally by the number of employees terminated during this period relative to the borrower’s prior employment levels.

Per https://www.lra.org/uploads/1/0/6/5/106519639/phase_three_cares_act_summary_3.20.20.pdf

and https://www.countable.us/articles/43144-s-status-phase-3-coronavirus-relief-bill

Tax Relief Enacted & Proposed

I. Income Tax Relief

a. The IRS has announced that the new income tax filing deadline for individual, trust, corporate, and other non-corporate filers is July 15, 2020.  No forms need to be filed and no payments need to be made by April 15th to qualify for this automatic extension.

b. Additionally, there is currently a proposal in the CARES Act to postpone the need for businesses and individuals to make estimated tax payments for 2020 until October 15th, 2020.

c. Many states have already conformed to the new filing deadline as well, and the Massachusetts Department of Revenue (DOR) has indicated that it is prepared to follow the IRS in offering similar relief to taxpayers regarding tax filing and tax payment obligations.

d. As legislation is still in process, it should be noted that there are many other potential benefits and changes that Congress is considering.  For example, One CARES Act proposal is to allow retirement funds to be distributed by up to $100,000, while waiving the 10% tax penalty, for anyone who is diagnosed with COVID-19, has a spouse or dependent diagnosed, or has suffered financial hardships due to the outbreak in general.

II. Payroll Tax Relief

a. The Family First Coronavirus Act approved provisions for businesses and tax-exempt organizations with fewer than 500 employees that are required to provide emergency paid sick leave and emergency paid family and medical leave. Through payroll tax credits, employers’ re-coup costs due to the emergency paid sick leave and family medical leave. Refundable sick leave credit caps at $5,111 per employee and refundable child-care leave credit caps at $10,000 per employee.

b. For self-employed individuals under similar circumstances, equivalent child-care leave and sick leave credits are also available.

c. The pending CARES Act includes provisions to delay due dates for employer payroll taxes. The employer portion of 2020 payroll taxes would be deferred and due incrementally: 50% on Dec 31, 2021 and 50% on Dec 31, 2022. The employer portion of 2021 quarterly payroll taxes would resume January 1, 2021.

III. Sales Tax Relief

a. For Massachusetts, businesses that paid less than $150,000 in regular sales plus meals taxes in the year ending February 29, 2020 will be eligible for sales and meals tax relief.

b. Business that paid less than $150,000 in room occupancy taxes in the year ending February 29, 2020 will be eligible for room occupancy tax relief. The DOR is currently drafting emergency regulations to implement these administrative relief measures.

c. Many states have also extended the deadline to file sales tax returns interest and penalty free. Please feel free to reach out to us for additional state relief guidance.

Please connect with us to discuss more information specific to your business.  We’re here for you, as we always have been, to provide guidance based on your unique needs.

Filing and payment extension

According to new Notice 2020-18, any person with a federal income tax return or payment due on April 15, 2020, has until July 15, 2020, to file a return or make a payment. Specifically, a “person” includes an individual taxpayer, trust, estate, partnership, association, company or corporation. Taxpayers can defer payment of federal income tax (including any self-employment tax) owed for the 2019 tax year from the normal April 15 deadline until July 15. They can also defer their initial quarterly estimated federal income tax payments for the 2020 tax year (including any self-employment tax) from the normal April 15 deadline until July 15.

Previously, the IRS had issued guidance (in Notice 2020-17) stating that corporations could postpone tax payments up to $10 million and all other taxpayers could postpone payments up to $1 million without penalties or interest. In Notice 2020-18, the IRS now states: “There is no limitation on the amount of the payment that may be postponed.”

Normally, when you file an extension, you must still make a good-faith estimate of your tax liability and, by the normal filing deadline, pay the full amount estimated to be due. The relief in Notice 2020-18 is an exception to the general rule.

Taxpayers don’t need to file any additional forms to qualify for this automatic federal tax filing and payment relief. But, if you’re due a refund, you probably still want to file your income tax return as soon as possible so you can receive your money. The IRS stated that “most tax refunds are still being issued within 21 days.”

We’re here to help

Individual states are also announcing state tax relief measures for their residents. Contact us to learn more about the federal and state tax relief opportunities that are available. We can answer all of your tax filing and payment questions.

Expanded family and medical leave

The new law amends the federal Family and Medical Leave Act (FMLA) for employers with fewer than 500 employees. Those employers generally must provide employees who’ve been on the job for at least 30 calendar days (including those who work under a multiemployer collective agreement and whose employers pay into a multiemployer plan) with up to 12 weeks of job-protected leave, part of it paid.

The new law generally allows the leave in circumstances where an employee is unable to work (or “telework”) due to a need to care for a minor child whose school or paid place of childcare has been closed or is unavailable due to COVID-19.

The FMLA generally requires only job-protected leave, not paid leave. For leave under the new law, only the first 10 days of leave may be unpaid. (Those 10 days might, however, qualify for paid sick leave; see below.)

After 10 days, covered employers must provide paid leave at two-thirds of an employee’s usual rate. The pay requirement is limited, however, to $200 per day and $10,000 total per employee.

Be aware that certain exemptions and special rules may apply regarding expanded family and medical leave.

Paid sick leave

Under the new law, employers with fewer than 500 employees must provide 80 hours of paid sick leave for full-time employees in certain situations. Part-time employees are entitled to this paid sick leave for the average number of hours worked over a two-week period.

Employees are eligible regardless of how long they’ve worked with the employer, and employers can’t require an employee to use other paid leave before the paid sick time.

An employee qualifies for the leave when he or she is unable to work (or telework) because the employee:

1. Is subject to a COVID-19-related quarantine or isolation order,
2. Has been advised by a health care provider to self-quarantine,
3. Is experiencing COVID-19 symptoms and seeking a medical diagnosis,
4. Is caring for an individual subject to a COVID-19-related quarantine or isolation order,
5. Is caring for a son or daughter whose school or place of care has been closed, or whose childcare provider is unavailable, due to COVID-19 precautions, or
6. Is experiencing substantially similar conditions specified by the U.S. Secretary of Health and Human Services Alex Azar.

When leave is taken for an employee’s own illness or quarantine (reasons 1 through 3 above), the leave is required to be paid at the employee’s regular rate, but no higher than $511 per day ($5,110 total). For leave taken for reasons 4 through 6 above, the leave is required to be paid at two-thirds of the regular rate, capped at $200 per day ($2,000 total).

Note that certain exemptions and special rules may apply regarding paid sick leave.

Tax credits for employers and the self-employed

Covered employers generally can take a federal payroll tax credit for 100% of the qualified family and sick leave wages they pay each quarter. The credits generally are available only to employers required to provide benefits by the new law.

The amount of wages taken into account for the paid family leave for each employee is capped at $200 per day and $10,000 for all calendar quarters. The amount of wages taken into account for paid sick leave is limited to $511 per day for leave taken for the employee’s own illness or quarantine and $200 for leaves taken to care for others.

Wages taken into account when computing the credit amount won’t be taken into account when computing the existing Section 45S business tax credit for paid family and medical leave.

Note that tax credits may also be available to certain self-employed individuals.

Effective dates

The new law provides that the paid leave provisions must take effect no later than 15 days after enacted. They expire on December 31, 2020. More relief affecting employees and businesses is sure to follow this legislation. Turn to us to for the latest developments.

At President Trump’s direction, Mnuchin announced on Twitter, “We are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.”

Previously, the U.S. Treasury Department and the IRS had announced that taxpayers could defer making income tax payments for 2019 and estimated income tax payments for 2020 due April 15 (up to certain amounts) until July 15, 2020. Now, the federal government is stating that you don’t have to file a return by April 15.

Of course, if you’re due a tax refund, you probably want to file as soon as possible so you can receive the refund money. Contact us with any questions you have about filing your return.

• For individuals, payments up to $1 million can be deferred until July 15th. Interest and penalties will not accrue on these deferred payments between April 15th and July 15th.
• The $1 million deferral limit applies to all income and self-employment taxes due April 15th, including 2019 balances due and Q1 2020 estimated tax payments.
• Any excess tax due over the $1 million should be paid by April 15th if possible, as those amounts will continue to accrue interest and penalties.
• The $1 million limit applies to both single filers and couples filing jointly.
• For corporations, payments up to $10 million can be deferred until July 15th.  As with individuals, interest and penalties will not accrue on these deferred payments between April 15th and July 15th.
• To date, there has been no extension of the due date for filing tax returns. This means we will need to continue to file returns and extensions by April 15th.
• At this point, there is no extension of the second quarter estimated tax payments, so those will still be due June 15th.

We hope you find this information helpful and we will continue to communicate updates as we receive them. Please visit our News & Resources page for more information.

This deferral relates to federal tax payments only and we are still waiting to receive more exact details. We will continue to keep a keen eye on further developments as well as decisions made at the state level.

We are committed to communicating with you and will remain in touch as more information becomes available.

We will continue to navigate this uncertain time as we always have – together.

Sincerely,

Your Edelstein Team

On March 14, the U.S. House of Representatives overwhelmingly passed a bipartisan 110-page bill that has received support from President Trump and, as of this writing, is expected to be taken up by the Senate this week. The Families First Coronavirus Response Act includes a wide range of provisions, including some addressing insurance coverage and reimbursement of diagnostic testing costs and others expanding safeguards for economically disadvantaged individuals. It also includes two significant groups of measures that will affect certain employers and workers through December 31, 2020.

Expanded family and medical leave

The act amends the Family and Medical Leave Act (FMLA) for employees who 1) work for employers with fewer than 500 employees, and 2) have been on the job at least 30 days. Under the bill, these employees (including those who work under a multiemployer collective agreement and whose employers pay into a multiemployer plan) will have the right to take up to 12 weeks of job-protected leave to:

• Comply with a requirement or recommendation to quarantine due to exposure or symptoms of COVID-19,
• Care for an at-risk family member who’s quarantined due to exposure or symptoms of COVID-19, and
• Care for their children if the children’s school or place of care has been closed, or the childcare provider is unavailable, because of COVID-19.

Although the FMLA generally requires only job-protected leave — not paid leave — the bill mandates paid leave after 14 days at two-thirds of the employee’s usual rate. (The first 14 days are covered under the paid sick leave provisions discussed below).

Note, though, that the bill gives the U.S. Secretary of Labor the power to issue regulations that exempt small businesses with fewer than 50 employees from this expansion if it would jeopardize the viability of the business. Because of this potential exemption and the fact that these provisions don’t apply to employers with 500 or more employees, many American workers won’t be protected by them.

The act will help employers subject to the provisions by allowing them to take a tax credit against their share of Social Security taxes for 100% of the qualified family leave wages they pay each quarter. The amount of wages taken into account for each employee is capped at $200 per day and $10,000 for all calendar quarters. Any excess credit over its Social Security tax liability is refundable to the employer.

No deduction is allowed for the amount of the credit, and no credit is allowed for wages that are subject to the existing Section 45S business tax credit for paid family and medical leave. Employers can elect to not have the credit apply.

The 100% refundable family leave credit also is available for certain self-employed individuals, applicable against income taxes. Self-employed people who would be entitled to paid leave under the expanded FMLA if they were employees of a business are eligible. The qualified leave amount is capped at the lesser of $200 per day or the average daily self-employment income for the taxable year per day. These individuals can count only those days they’re unable to work for reasons covered by the expanded FMLA. The Treasury Department will establish documentation requirements.

Paid sick leave

The act requires employers with fewer than 500 employees to provide two weeks of paid sick leave, at the employee’s regular rate, to quarantine or seek a diagnosis or preventive care for COVID-19. If the employee must take leave to care for a family member for such purposes, or to care for a child whose school has closed or childcare provider isn’t available, these employees must provide leave paid at two-thirds of the employee’s regular rate. Full-time employees are entitled to 80 hours of paid sick leave, and part-time employees are entitled to the typical number of hours that they work in a typical two-week period.

As with expanded family leave, covered employers can claim an elective refundable 100% tax credit for qualified paid sick leave wages, also against Social Security taxes. But the bill makes a distinction between those wages paid for employee who must self-isolate or obtain a diagnosis and those paid for to employees caring for a family member or child. For the former, the amount of wages taken into account per employee is capped at $511 per day; for the latter, it’s capped at $200 per day. The total number of days taken into account per employee can’t exceed the excess of 10 over the total number of days taken into account for all preceding calendar quarters.

Again, any excess credit over their Social Security tax liability is refundable, no deduction is allowed for the amount of the credit and no credit is allowed for wages that are subject to the Section 45S business tax credit.

The self-employed are similarly eligible for the refundable credit at differing amounts — 100% for their personal needs and 67% to care for a family member or child. The amount of wages is capped at $511 per day or the average daily self-employment income for the taxable year per day.

HDHP coverage

The IRS has published new guidance making clear that high-deductible health plans (HDHPs) can pay for COVID-19-related testing and treatment without putting their status at risk. That means individuals with HDHPs that provide such coverage can continue to contribute to their health savings accounts (HSAs) and deduct the contributions on their 2020 tax returns (or make pre-tax contributions their employer-sponsored HSAs).

Health insurance plans generally must satisfy several requirements to qualify as an HDHP. For example, providing nonpreventive health care coverage without a deductible, or with a deductible below the requisite minimum, would forfeit HDHP status. (Vaccinations are considered preventive care.) The IRS is temporarily suspending this rule to avoid administrative delays or other financial disincentives that could impede testing and treating for COVID-19.

Stay tuned

Congress and the Trump administration are weighing other actions to increase access to health care, as well as stabilize and stimulate the economy. We’ll keep you updated as new relief becomes available. Contact us for help to determine how best to minimize the financial impact.

Given these unique current events, there has been talk that the IRS will extend the filing deadline and provide temporary relief for the timing of tax payments.  Some states have started to enact their own extensions.  However, at this time, there has been no official extension granted for Federal tax returns.  For those clients who have already submitted their tax materials, we thank you.  For those who have yet to submit their materials, please do so as soon as possible.  We prefer to be prudent and not operate under the assumption the IRS will offer an extension.  If you are able to provide your materials electronically, please do so through your Client Portal with us.  If you do not have a Portal, please reach out to your Edelstein team member and we can set one up for you.

While this is an unprecedented time, we will continue to deliver the level of service that our clients and friends of our firm have come to expect from us. At the same time, we are committed to the health and safety of our team members and clients, and doing what we can as a firm to help keep COVID-19 from spreading.

As always, please do not hesitate to contact us with any questions or concerns.

Our staff has been provided with the resources to work from home as necessary and we are keeping a keen eye on decisions made throughout the nation. We are leveraging technology to change the format of scheduled in-person meetings. If you currently have meetings scheduled with us in-person, either at our office or elsewhere, you will be contacted by your Edelstein team member to discuss an alternative option. Likewise, if you were planning to deliver something to us in-person, connect with your team member to make the necessary arrangements.

Our job is to provide our clients with solutions whenever possible. As a firm, we are working to make sure our staff and clients are healthy and safe. We will continue to monitor any changes with the utmost care and relay information to you as needed.

We understand some of you may be facing difficult times, whether it be you or a family member directly impacted, or the angst that comes with a situation of this nature. Please do not hesitate to contact us with any questions or concerns.

Thank you for your time,

Your Edelstein Team