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Tax Monitor

PPP Treatment Of Past Size Certifications That Excluded Non-U.S. Employees 

The Small Business Administration clarified the treatment of borrowers that submitted size certifications that excluded the non-U.S. employees of the borrower and its foreign affiliates under the Paycheck Protection Program (PPP). On May 18, 2020, the Treasury Department (Treasury) issued its twelfth interim final rule on the PPP: “Business Loan Program Temporary Changes; Paycheck Protection…

Involuntary Rollovers – Reg BI - What You Need To Know When Participants Have Balances Of $5,000 Or Less And Don't Take Out Their Monies From Retirement Plans

In June 2019, the U.S. Securities and Exchange Commission adopted Regulation Best Interest. Regulation BI (as it is known) imposes a new standard of conduct for broker-dealers when making recommendations of any securities transaction or investment strategy (including account recommendations) to a retail customer. Regulation BI also applies to associated persons of broker-dealers that are natural…

PPP Forgiveness Application

The Forgiveness application produced by Treasury answers several questions about the forgiveness process:

PAYROLL COSTS

The application states that borrowers are eligible for forgiveness for payroll costs paid and payroll costs incurred. This indicates that both costs incurred and costs paid should be eligible for forgiveness. Payroll costs are considered paid on the day that paychecks are…

Heroes Act

Late last night the House passed the Heroes Act, H.B. 6800, which tries to expand the scope of the Paycheck Protection Program and does provide some necessary technical corrections. The Act also changes other key provisions and definitions, the reasonableness of which should be debated and cross-checked carefully. However, one change in the Act should be highlighted to ensure it was intentional:…

UPDATED Certifier Beware: Certifications & Liability Under the False Claims Act

Mark Twain once observed that while history does not repeat itself, “it rhymes.” The federal government’s response to COVID-19 is likely to follow a familiar pattern: (a) the federal government will continue to provide massive amounts of financial aid in an effort to stave off the worst economic effects of the crisis; (b) some of those funds will be allocated to entities that the public perceives…

The Internal Revenue Service Issues New FAQs Regarding the Employee Retention Credit

The Internal Revenue Service (“IRS”) recently updated its frequently asked questions (“FAQs”) regarding the Employee Retention Credit (“ERC”) under the CARES Act. Here are some important highlights.

What is a government order that completely or partially suspends an employer’s operations?

Recall that the ERC allows an Eligible Employer to receive a tax credit in the amount of 50% of the qualified…

Electric Cooperatives May Be Eligible For PPP Loans

Electric cooperatives that are tax exempt under 501(c)(12) of the Internal Revenue Code (Code) are considered business entities organized for profit and therefore eligible for loans under the Paycheck Protection Program (PPP) as long as other eligibility requirements are met.

The Treasury Department published its Eleventh interim final rule: “Business Loan Program Temporary Changes; Paycheck…

CARES ACT - QUICK REFERENCE GUIDE

With the flood of information, we wanted to provide financial advisors and plan sponsors with a summary FAQ quick reference guide for key topics. Here are the Most Commonly Asked Questions and Answers currently available. We will keep you apprised of any further developments. Certainly, feel free to reach out to us with any questions. Jackson Kelly PLLC is here, as we have been for 200 years, to…

PPP FAQ 47 added to 5/13/2020 update

The PPP safe harbor term for “necessary” certification is extended to May 18, 2020.

Late on May 13, 2020, the Treasury updated its Frequently Asked Questions (FAQ) to add Question 47. It provides that the SBA will be revising the interim final rule providing for the safe harbor for repayment of PPP loans. The revision will extend the repayment deadline from May 14 to May 18 to provide borrowers…

PPP Loan Increases Possible For Partnerships And Seasonal Employers If The Initial Loan Has Not Been Reported By The Lender

For Paycheck Protection Program (PPP) loans not yet reported by the lender on Small Business Administration (SBA) Form 1502, certain borrowers may apply to increase the amount of their initial loan. Partnerships that applied for a PPP loan under the rules applied prior to April 28, 2020 and seasonal employers that applied for a PPP loan under the rules applied prior to April 14, 2020 may be…

Internal Revenue Service Updates Cafeteria Plan And Health Flexible Spending Arrangement Rules In The Face Of COVID-19

With the issuance of Notice 2020-29 and Notice 2020-33, the Internal Revenue Service (“IRS”) increased the carryover amount allowed for health flexible spending arrangements and expanded election rules for cafeteria plans. Employers wanting to offer these new options and provide additional flexibility to their employees must amend their plans.

CARRYOVER AMOUNT INCREASED FOR HEALTH FLEXIBLE…

Economic Necessity Safe Harbor

The SBA provided a great deal of relief to PPP loan borrowers today concerning the economic necessity certification. In a new FAQ 46, the SBA provided a safe harbor concerning the economic necessity certification which required borrowers to certify in good faith that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”

The SBA has…

 

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