MA Clarifies 2020 Tax Treatment of PPP Income, EIDL Grants, & SBA Debt Relief Subsidies Albin, Randall and Bennett

These provisions apply in the same manner to group health plans covering employees in multiple states. For example, the experience of a fully-insured group health plan covering employees in multiple states must be attributed to the state in which the contract for health insurance coverage is issued or delivered as stated in the contract (except for coverage provided through an association). If the plan contracted for coverage with a different issuer in each state, then the relevant experience must be attributed to each of these states. Similarly, the experience of a self-funded group health plan providing benefits to employees in multiple states must be attributed to the state in which the plan sponsor has its principal place of business (or, in the case of an association with no principal place of business, the state where the association is incorporated), as applicable. If data are collected based on the plan year, newly introduced drugs would be reflected in the data for some plans and coverage but not others. If data are collected based on the calendar year, newly introduced drugs will be reflected in the data for every plan, regardless of the start and end date of the plan year.

  • President Trump signed into law billions of dollars in long-awaited COVID-19 and economic relief.
  • Therefore, for such purposes Massachusetts conforms to ARPA’s further limitation of deductions under Code § 162(m) starting with the 2027 taxable year.
  • He is the Practice Leader of both ARB’s Business Tax Services Team and ARB’s Private Client Advisory Services Team.
  • The President’s action only defers Social Security taxes; it doesn’t forgive them, meaning employees will have to pay the taxes later unless Congress passes a law to eliminate the liability.

Note that certain exemptions and special rules may apply regarding paid sick leave. Amount, Interest and Terms
Economic Injury Disaster Loans offer up to $2 million in financial assistance to help small businesses mitigate their revenue losses. You could use the money to pay overhead costs such as utilities and rent, keep up with accounts payable and cover payroll. Waived Required Minimum Distribution Rules
The CARES Act similarly waives the required minimum distribution (RMD) rules for certain defined contribution plans and IRAs for calendar year 2020.

COVID-19 Telehealth Program

The good news for consumers is the revamped electric vehicle (EV) tax credit that is a notable part of the new law’s focus on clean energy which has given rise to the popularity of electric vehicles. However, there are some rules and restrictions that apply and nuances to consider, particularly as it relates to timing. Loan ForgivenessThe borrower is eligible for loan forgiveness for businesses that retain employees or re-hire laid-off workers, equal to the amount spent during an 8 week period after the origination of the loan on allowable expenses (the eligible forgiveness amount), reduced as described below. Tax-free Unemployment Benefits – A retroactive change was made to unemployment income received during 2020. The first $10,200, per recipient, of unemployment income received during that year will now be tax free for those with adjusted gross income less than $150,000.

  • Be aware of that if you’re planning a start-up that will begin to generate, or will still be generating, excess business losses in 2021.
  • Included in the nearly 5,600-page Consolidated Appropriations Act of 2021, the package expands and extends several critical provisions of the CARES Act enacted in the spring of 2020 to deal with the emerging financial and health care crisis.
  • The majority of group health plans have a relatively small number of participants, beneficiaries, or enrollees.
  • If you fall for one of these bogus claims, you could pay for services or products you’ll never receive, and your personal information might be compromised, leading to undesirable financial consequences.
  • Of this preamble, must be net of prescription drug rebates, fees, and other remuneration and must include cost sharing as well as, to the extent available, drug manufacturer cost-sharing assistance.
  • The concession to a troubled borrower may include a restructuring of the loan terms to alleviate the burden of the borrower’s near-term cash requirements, such as a modification of terms to reduce or defer cash payments to help the borrower attempt to improve its financial condition.

Postponed payments
Under the notice, the due date for making federal income tax payments up to applicable limits is postponed to July 15, 2020. The limit for each consolidated group or corporation that doesn’t file a consolidated return is $10 million. For all other taxpayers, the applicable limit is $1 million, regardless of filing status. In other words, the $1 million tax limit applies equally to a single individual and to married individuals filing a joint return. 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.

SBA Subsidy Payments & Reporting

In an effort to make PPP loans more accessible, the new relief package guarantees that at least $60 billion of the new funds will be designated for community banks and smaller credit unions so they don’t have to compete with larger institutions. The new measure also includes an additional $75 billion for reimbursements to hospital and health care providers, and $25 billion for expanded coronavirus testing. On June 5, 2020 the Paycheck Protection Program Flexibility Act (PPPFA) of 2020 was signed into law, amending the CARES Act to loosen restrictions on PPP loans, making loan terms more Ma Clarifies 2020 Tax Treatment Of Ppp Income, Eidl Grants, & Sba Debt Relief Subsidies favorable for borrowers. Last night (6/11), the Small Business Administration (SBA) announced an update to their interim final rule by clarifying key provisions such as loan maturity, deferral of loan payments and forgiveness provisions to conform with the Flexibility Act. This is the current guidance unless Congress votes to forgive the liability and as you can imagine, it leaves us with numerous questions. With the payroll tax deferral set to  begin on September 1st there is little time to decide whether to proceed as usual or reprogram payroll systems to accommodate the deferral.

Ma Clarifies 2020 Tax Treatment Of Ppp Income, Eidl Grants, & Sba Debt Relief Subsidies

By providing grant recipients with additional funds to use for training these new hires, the HireNow program encourages employers to rethink hiring practices and broaden minimum qualifications to increase staffing levels in a tight labor market. Under the IRA, the new EV incentives provide a tax credit of up to $7,500 for a new vehicle and $4,000 if you purchase a used EV (at least two calendar years old). Until the end of 2023, any qualified tax credits will be received when you file your taxes the following year.