On Thursday March 11, 2021 President Biden signed the American Rescue Plan Act of 2021, H.R. 1319. This is the third major relief package to help Americans who are struggling with losses and setbacks from COVID-19 related government lockdowns and countermeasures.
Following the $1.7 million Coronavirus Aid, Relief, and Economic Security Act (CARES) of March 2020, and the $900 billion Consolidated Appropriations Act (CAA) of December 2020, the $1.9 trillion American Rescue Plan Act “the Act” provides several tax benefits for individuals and businesses alike.
The Michigan Department of Treasury has granted a 31-day waiver for penalty and interest for the late reporting of sales, use, and withholding (SUW) taxes ordinarily due on December 20, 2020. Because of this waiver, any SUW returns and payments for affected businesses can be made without interest or penalty until January 20, 2021.
The Tax Cuts and Jobs Act (TCJA) of 2017 added many new provisions to the tax code. Taxpayers with larger estates initially saw a benefit from the change to the lifetime exclusion for gift and estate taxes. It increased the amount for each taxpayer from $5 million to $11 million, adjusted for inflation. (For 2019, the indexed amount is $11.4 million.) However, tax practitioners saw a catch: after 2025, the provision will sunset and the lifetime exclusion per taxpayer will revert back to $5 million. Worse yet, it was unclear what would happen to taxpayers who gave gifts that make up this extra $5 million provided by the TCJA. Thankfully, the IRS has finalized Regulation 106706-18, which provides more clarity around gifts and estate transfers. Let's take a look at what you should know if you're worried about being taxed for your generosity.
The Small Business Administration (SBA) has released a Loan Forgiveness Application for the Paycheck Protection Program (PPP), which was created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The application and its instructions provide step-by-step guidance on calculating a borrower's PPP loan forgiveness amount. The application is much anticipated and helps clarify some of the questions we referred to in our previously published Top Ten Questions About the PPP blog -- but not all. The SBA and the U.S. Treasury have indicated they will continue to release guidance on the forgiveness calculation.
On May 21, 2020, Governor Whitmer announced Executive Order 2020-97 (amending Executive Order 2020-91) which indicates that all businesses or operations that are permitted to require their employees to leave the homes or residences for work under Executive Order 2020-92 (since amended to Executive Order 2020-96 and extended through June 12, 2020 under EO 2020-100) and any order that follows it, must, at a minimum:
The COVID-19 pandemic has had far-reaching consequences across the entire business world and one of the most hard-hitting effects has been the reduction of cash flow throughout nearly all business lines. Invoices are not getting paid on time, monthly bills are accumulating, and for some businesses, (like restaurants and theaters) activity and cash inflow may be completely stopped. To provide some relief to businesses affected by the coronavirus, Congress recently passed the CARES Act which offers the possibility of a one-time infusion of cash in the form of tax refunds.
We have gathered the notable updates, guidance, and reminders from the Department of Labor (DOL) and Internal Revenue Service (IRS) regarding the Families First Coronavirus Response Act (FFCRA) and Unemployment Insurance Agency (UIA).
The Tax Cuts and Jobs Act of 2017 (TCJA) was one of the most consequential tax law changes of the last three decades. However, when it was passed, it expanded and reworked the definition of “qualified improvement property". The new definition contained a critical error, which we will explore below. That error has just been corrected with the passage of the CARES Act of 2020. Since the correction is retroactive, the IRS has released new information and new guidance for taxpayers to address these new changes. Here's what you need to know.
An important provision of the CARES Act, the Paycheck Protection Program (PPP) received an additional $310 billion in funding from Congress on April 24, 2020, after running out of the $349 billion in funds in the initial tranche. With a massive $659 billion in total funding, the program offers loans that have the possibility of being completely forgivable, if spent in the way the government has mandated.
If you are a small business owner, we are sending a (virtual) high-five your way for enduring the last few weeks of the COVID-19 crisis. You are navigating financial and emotional stress as well as a mountain of information to apply for financial aid packages from the government. At MRPR we are aiming to update information and help you sift through the important details as you create a disaster mitigation strategy for your business.