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Tax Monitor

PPP New Funding

The Senate approved $483 billion for the Paycheck Protection Program offered through the SBA, and the House is expected to vote later this week. Any application denied because of lack of funds or not submitted, should be resubmitted immediately. Note, some banks are still processing first round loan applications, so if you had not heard anything from your bank, you should confirm your application…

The CARES Act Employee Retention Credit: Another Tool for Employers Experiencing Financial Challenges in the Wake of the COVID-19 Pandemic

In COVID-19 new reality, employers are struggling to balance the retention of their employees with the survival of their business. The Employee Retention Credit under the CARES Act offers some relief.

ERC Basics

The Employee Retention Credit (“ERC”) allows an Eligible Employer to receive a tax credit in the amount of 50% of the Qualified Wages it pays to employees. Understanding the impact of the…

COVID-19 Impact on Pooled Retirement Plans

Business disruptions and market turbulence wrought by COVID-19 have caused many employers to evaluate their qualified retirement plans. This is a prudent step for employers that are named fiduciaries of their plans because the Employee Retirement Income Security Act of 1974 (ERISA) requires fiduciaries to act for the exclusive benefit of plan participants and their beneficiaries, make decisions…

Payment Protection Program (PPP) Update

Interim Rules released today by the SBA clarify that in calculating payroll costs for Paycheck Protection Loan, borrowers should include partner compensation up to $100,000 in these costs. There had been some question as to the appropriate treatment of partner compensation and these rules have answered that question.

These rules go on to clarify that calculation of self-employed individual…

The CARES Act provisions that impact tax-qualified retirement plans, including offering withdrawal options, require action by the employers

The CARES Act offers several withdrawal options for participants in certain defined “eligible retirement plans.” Employers must amend their plans if they want to be able to offer CARES Act withdrawal provisions (and the plan loan provisions described below) to employees, but the CARES Act lets employers implement the withdrawals and loans in operation and wait to amend the plan until as late as…

Additional Guidance on Paycheck Protection Program Loans

The Treasury Department has just issued additional guidance on the Paycheck Protection Program (PPP) loans.  The entire FAQs are available here. The inclusion of benefits in the $100,000 compensation cap has been the source of many questions. The Q&A on this issue appears below for ease of reference.

Question: The CARES Act excludes from the definition of payroll costs any employee compensation in…

The Ins and Outs of the CARE Act Paycheck Protection Program – What Lenders and Borrowers Need to Know

The Paycheck Protection Program(“PPP”) in the CARE Act authorizes up to $349 billion dollars in forgivable loans. What do you really need to know to be a lender or a successful borrower under the PPP? Jackson Kelly’s lawyers have been sorting through the guidelines and available information and layering on years of experience in representing business to help guide our clients through the CARE…

Employer What Ifs for COVID-19

BEFORE YOU ACT ON EMPLOYEE BENEFITS BECAUSE OF COVID-19 STRESSORS, CONSIDER: 

If you are considering terminating your 401(k) plan to end contribution obligations.

This could have adverse consequences since the “successor plan” rule in IRS regulations currently prohibits covering the same employees in a new plan for 12 months following the termination. A plan termination also requires full vesting…

Cash Flow Considerations During the Coronavirus Pandemic

Your business was shut down over night for at least two weeks if not longer. What should you do to help preserve cash flow and help keep the doors open post coronavirus shut down?

Here are a couple of suggestions. Note, with regard to employees and paths taken, please refer to recent articles from Justin Harrison that address a number employee issues.

First, if you have loans, talk to your bank.…

An Update on Taxes During COVID-19 - UPDATED

Breaking News: U.S. Treasury Secretary Steven Mnuchin announced on March 20, 2020 that the IRS is moving Tax Day to July 15, 2020 from April 15. Accordingly, taxpayers can now delay filing and paying taxes until July 15.  Taxpayers can also still delay paying first quarter 2020 estimates until July 15. For details click here.

The Treasury announced yesterday, March 17, 2020, invoking the…

WHAT YOU SHOULD KNOW ABOUT HOW THE SECURE ACT AFFECTS YOU AND YOUR BENEFICIARIES

The SECURE Act1 makes sweeping changes to the required minimum distribution (“RMD”) rules for retirement accounts. Except for a few types of beneficiaries, it eliminates the most popular tax-advantaged planning feature - the ability of a retirement beneficiary to stretch RMDs over the beneficiary’s life expectancy. The elimination of the stretch fundamentally changes how beneficiaries are taxed…

 

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