COVID-19 Response Center

Freed Maxick's commitment to you during the COVID-19 crisis.


As we are in the midst of a global pandemic, be assured that the health and well-being of our clients, team members, colleagues and their families are of utmost importance to us. As we are keenly aware of the acute challenges businesses and employers are facing in connection with the coronavirus outbreak, we have formed dedicated internal teams and resources to focus on the following areas:

  • Small business cash flow needs, including integration of the various Small Business Administration loan programs in the CARES Act with federal and state tax deferral programs;
  • Employer and employment needs, including integration with the Families First Coronavirus Response Act;
  • Individual needs, including individual rebates and retirement plan relief; and
  • Specialized industry response related to: Agribusiness, Healthcare, Non-profit, Real estate, Financial institutions, Manufacturing, wholesale, and distribution

This legislation is complex, evolving and will unfold over the next several weeks and months, but we are working constantly to be a resource for our clients and communities in this time of need to provide clear and concise guidance. Please reach out to your Freed Maxick engagement leader for more information and stay tuned for updates to this resource center. Contact us to discuss planning ideas applicable to your situation.

To learn more about how Freed Maxick is currently operating, click here for our remote workforce communication.

Latest COVID-19 News

Qualified Opportunity Fund Investments: IRS Provides Additional Relief

On January 20, 2021, the IRS released Notice 2021-10 to provide additional relief to Qualified Opportunity Funds (“QOF”) and their investors in response to the ongoing COVID-19 pandemic. Specifically, this…

Opp Zone Industry Update

On January 20, 2021, the IRS released Notice 2021-10 to provide additional relief to Qualified Opportunity Funds (“QOF”) and their investors in response to the ongoing COVID-19 pandemic. Specifically, this notice provides relief for QOFs and their investors in connection with the following:

    1. 180-Day Investment Requirement for QOF Investors
    2. 30-Month Substantial Improvement Period for QOFs
    3. 90-Percent Investment Standard for QOFs
    4. Working Capital Safe harbor for Qualified Opportunity Zone Businesses
    5. 12-Month Reinvestment Period for QOFs

A. 180-Day Investment Requirement for Qualified Opportunity Fund Investors

A taxpayer can elect to defer the recognition of eligible gain from the sale or exchange of property with an unrelated person, by investing the gain to be deferred in a QOF within a 180-day period, beginning on the date of such sale or exchange. 

Notice 2021-10 postpones to March 31, 2021, any deadline for the 180-day investment requirement that otherwise would have occurred on or after April 1, 2020, and before March 31, 2021.

Taxpayer’s still need to make a valid deferral election in accordance with the instructions to Form 8949, complete Form 8997, and file the completed Form 8949 and Form 8997 with a timely filed Federal income tax return (including extensions) or amended Federal income tax return for the taxable year in which the gain would be recognized.

B. 30-Month Substantial Improvement Period for Qualified Opportunity Funds

The original use of post-2017 acquired tangible property in the Qualified Opportunity Zone (“QOZ”) must begin with the QOF or QOZ business, or the QOF or QOZ business must substantially improve that property during any 30-month period beginning after the date of acquisition. Property is substantially improved when additions to basis with respect to such property in aggregate, exceed the adjusted basis of that property as of the beginning of that 30-month period.

The 30-month period is tolled for the period beginning on April 1, 2020 and ending on March 31, 2021. 

C. 90-Percent Investment Standard for Qualified Opportunity Funds

A QOF is required to hold at least 90 percent of its assets in QOZ property, determined by the average of the percentage of QOZ property held by the QOF on (i) the last day of the first 6-month period of the taxable year of the QOF, and (ii) on the last day of the taxable year of the QOF. This is referred to as the 90-percent investment standard. A penalty can be imposed for each month in which the QOF fails to meet this standard unless it is shown that such failure is due to reasonable cause.

If the last day of the first 6-month period of the taxable year or the last day of the taxable year falls within the period beginning on April 1, 2020, and ending on June 30, 2021, any failure to satisfy the 90-percent investment standard for that taxable year of the QOF is granted reasonable cause for such failure.

D. Working Capital Safe Harbor for Qualified Opportunity Zone Businesses

A QOZ business is required to meet a 5-percent nonqualified financial property test on each semi-annual testing date.  Under this test, less than 5-percent of the average of the aggregate unadjusted bases of the entity’s property may be attributable to nonqualified financial property.  The working capital safe harbor (“WCSF”) excludes reasonable amounts of working capital that are held in cash, cash equivalents, or debt instruments with a term of 18 months or less. 

Under the WCSH, there must be a written schedule consistent with the ordinary start-up of a trade or business for the expenditure of the working capital assets within 31 months of receipt by the business. The 31-month period can be extended to a 62-month period under certain conditions.

All QOZ businesses holding working capital assets intended to be covered by the WCSH before June 30, 2021, receive up to an additional 24 months to expend the working capital assets provided the requirements for the WCSH are otherwise met.

E. 12-Month Reinvestment Period for Qualified Opportunity Funds

For purposes of the 90-percent investment standard, a QOF has a 12-month period in which to reinvest proceeds received from the sale or other disposition of QOZ property, or a return of capital distribution from QOZ stock held by the QOF. This treatment is available to a QOF only to the extent that, prior to reinvestment in QOZ property, the reinvestment proceeds are continuously held in cash, cash equivalents, or debt instruments with a term of 18 months or less.

If the reinvestment period includes June 30, 2020, then the QOF receives up to an additional 12 months to reinvest the proceeds, provided the other conditions are met.  

Use the form below to connect with our Opportunity Zone consulting team or email Don at don.warrant@freedmaxick.com if you have additional questions.

SBA Issues Updated Interim Final Rules on PPP Loan Forgiveness

Late Tuesday night (1/19/21), the SBA published an “Interim Final Rule on Loan Forgiveness Requirements and Loan Review Procedures as Amended by the Economic Aid Act”. In addition, they issued…

PPP Updates - Loan Forgiveness

Late Tuesday night (1/19/21), the SBA published an “Interim Final Rule on Loan Forgiveness Requirements and Loan Review Procedures as Amended by the Economic Aid Act”. In addition, they issued updated Loan Forgiveness Applications and Instructions for Form 3508S (Which can now be used for loans of $150,000 or less), Form 3508EZ and Form 3508. Much of the revised Interim Final Rule (IFR) was information previously known and published.

Some highlights and updates of the new Interim Final Rule include:

  • The IFR applies to ALL PPP loans for which loan forgiveness payment had not been remitted by SBA as of December 27, 2020.

  • The IFR clarifies that payroll costs that are qualified wages considered to claim the Employee Retention Credit are not eligible for loan forgiveness.

  • The IFR provides more detail on additional costs eligible for forgiveness which include:
    • Covered operations expenditures;
    • Covered property damage costs;
    • Covered supplier costs;
    • Covered worker protection expenditures.

  • The IFR explains that to achieve forgiveness on Second Draw PPP Loans in excess of $150,000, the borrower must submit its loan forgiveness for the First Draw Loan before or simultaneously with the loan forgiveness application for the Second Draw Loan.

  • The IFR clarifies that the covered period for use of PPP loan funds has changed for all first and second draw loans that have not already been forgiven. The covered period begins on the date of the loan origination and ends on a date selected by the borrower that occurs no earlier than 8 weeks after loan origination and no later than 24 weeks after loan origination. (i.e., any period selected between 8 and 24 weeks). The covered period for first and second draw loans cannot overlap.

  • The IFR reaffirms that rent payments paid to a related party are eligible for forgiveness but only to the extent of mortgage interest paid on the rented property during the covered period. (Example – tenant pays $5,000 a month to their related party real estate LLC in which the real estate LLC pays $4,000 in principal and $1,000 in interest on the mortgage of the building. Only $1,000 of rent paid is eligible for forgiveness.)

  • The IFR reaffirms and explains the Safe Harbor Exemptions for FTE Reductions:
    • Borrowers are exempted from the loan forgiveness reduction arising from a proportional reduction in FTE employees during the covered period if the borrower is able to document in good faith the following: (1) an inability to rehire individuals who were employees of the borrower on February 15, 2020; and (2) an inability to hire similarly qualified individuals for unfilled positions on or before December 31, 2020 (or, for a PPP loan made on or after December 27, 2020, not later than the last day of the loan’s covered period).
    • Borrowers are also exempted from the loan forgiveness reduction arising from a reduction in the number of FTE employees during the covered period if the borrower is able to document in good faith an inability to return to the same level of business activity as the borrower was operating at before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020 (or PPP loans made after December 27, 2020, not later than the last day of the loan’s covered period) by Federal or State regulatory agencies related to health and safety standards.

  • The IFR explains borrowers are not to be double penalized for loan forgiveness if a reduction in salary/wages is a direct result of a reduction in the number of employees. The salary/wage reduction applies only to a decline in wages/salary that is not attributable to the FTE reduction.

  • The IFR explains that The Small Business Act gives borrowers an opportunity to cure reductions in FTEs and salary/hourly wages if those reductions are eliminated and restored no later than December 31, 2020 (or for loans made after December 27, 2020 no later than the last day of the loan’s covered period).

  • The IFR affirms that borrowers with a loan of $50,000 or less are exempt from any FTE or salary/wage reduction to the extent they can substantiate full appropriate use of the PPP funds.

As was the case with the PPP program when it was initially introduced back in March 2020, the SBA in conjunction with Treasury continue to issue additional guidance in the form of IFRs as well as FAQs regarding PPP loan forgiveness and additional PPP round 1 and 2 funding. There are many specifics that we still do not have clear and concise guidance on as it relates to the PPP program. We will continue to check for SBA and Treasury updates and keep you updated as more information becomes available.

New York State to Conform to Federal Rules and Not Tax Forgivable PPP Loans

In a surprising announcement, New York State has provided updated guidance that they will now conform and adopt the federal rule contained within the CARES ACT and not tax forgivable…

Cares Act-1

In a surprising announcement, New York State has provided updated guidance that they will now conform and adopt the federal rule contained within the CARES ACT and not tax forgivable PPP loans.

Additionally, New York State has also adopted the federal provisions of the new Consolidated Appropriations Act whereby expenses deductible on federal returns for eligible PPP expenses will now also be deductible on New York State returns.

As of this morning this information is only listed on the New York State “Individual” section of their website, however it is expected that this will apply to C Corporations as well. Again, this took many by surprise, and is outstanding news for New York State businesses. Stay connected with us for further updates.

Employee Retention Credit: 2021 Update | Freed Maxick

If you are an employer that had a significant decline in gross receipts over the last 12 months or faced full or partial mandatory closure by government order, then the…

Employee Retention Credit

If you are an employer that had a significant decline in gross receipts over the last 12 months or faced full or partial mandatory closure by government order, then the Consolidated Appropriations Act recently signed into law and in particular, revisions to the Employee Retention Credit, is important for you for the following reasons:

  1. 1. You may be eligible for a retroactive Employee Retention Credit for 2020 even if you received PPP Funding
  2. 2. You may eligible for additional Employee Retention Credit in 2021 for up to $14,000 per employee

The most significant impact this will have on you and your business is the potential for additional cash flow for your business to continue to weather the uncertain economic conditions.

When the CARES Act was signed into law back in March 2020, it was clear that taxpayers who received PPP (Paycheck Protection Program) loans were not eligible for the Employee Retention Credit (ERC) and because of that, any business that received PPP likely dismissed it. However, the most recent COVID Bill – The Consolidated Appropriations Act of 2021, has made some retroactive changes to the ERC for 2020 as well as significant changes to the credit for the first two quarters of 2021.

Important Changes to the Employee Retention Credit for 2021

As it relates to the newly constituted credit for the 2020 tax year, the most significant change is in Section 206 of the Bill that allows employers to retroactively borrow a PPP loan and claim the ERC for 2020. However, an employer is not allowed to double dip and include the same payroll costs for PPP forgiveness and the ERC. Under the new law, it orders the preference of payroll costs first to the ERC and then second to PPP unless the taxpayer elects otherwise.

So, how does one potentially achieve PPP forgiveness and ERC? Here’s an example:

Let’s say a business received a $200,000 PPP Loan. Over the course of the 24-week covered period, they paid $320,000 of eligible payroll costs and $60,000 of other non-payroll costs eligible for forgiveness under the PPP. Presumably, the employer could include $140,000 of payroll costs and $60,000 of other costs to achieve PPP forgiveness which leaves $180,000 of payroll costs that COULD qualify for the ERC assuming the employer’s eligible to claim the credit.

For employers that have already applied for PPP forgiveness, the ship may have already sailed to retroactively claim ERC for 2020. In many cases, an employer would have elected a 24-week covered period for PPP forgiveness and likely included all 24 weeks of payroll costs in their PPP application. Although covered expenses may have far exceeded the PPP loan amount, nonetheless those payroll costs were included in your PPP forgiveness application. Further guidance is needed to clarify if there are steps that can be taken for employers that previously submitted PPP forgiveness to retroactively amend their PPP forgiveness application to gain eligibility for the ERC.

For employers that have not yet applied for PPP forgiveness, after determining eligibility for the ERC (with a trusted advisor, of course!), a strategy for optimizing payroll costs to maximize PPP forgiveness while also claiming the ERC would need to be executed.

The Freed Maxick Tax Team’s guidance is that if you believe you would retroactively be eligible for the ERC in 2020, it might be best to sit tight and discuss your situation with us before submitting a PPP loan forgiveness application as there may be additional instructions from the SBA and Treasury.

Here’s what we know so far about the key changes to the ERC on a prospective matter. These changes only apply for credits earned between January 1, 2021 – June 30, 2021:

  • The COVID Bill extends the ERC program from an original end date of December 31, 2020 to a new end date of June 30, 2021 and alters the components of the ERC for the credit period of January 1, 2021 – June 30, 2021 and ONLY for that period.

  • Businesses are still not allowed to double dip qualified expenses for PPP and ERC. If you receive PPP2 funding, just tread lightly thinking it’s a slam dunk for both PPP and ERC as those same limitations still apply.

  • The ERC is now calculated using 70% of qualified wages.

  • The $10,000 limit per employee on qualified wages is still in place but now applicable for any qualified quarter. Employers could now be eligible to claim ERC on $10,000 of qualified wages on the same employee for wages paid in Q1 and Q2 of 2021. What was once a maximum credit of $5,000 per employee could be worth up to $14,000 in 2021.

  • Eligibility for the ERC based on a gross receipts is now met if gross receipts decline 20% or more in Q1 or Q2 of 2021 compared to the same calendar quarter of 2019. Businesses also have the option of applying the 20% gross receipts test to an immediately preceding calendar quarter compared to the same quarter of the previous year. This means to be eligible for Q1 of 2021, you can either compare Q1 2021 gross receipts to Q1 gross receipts of 2019 OR you can compare Q4 2020 gross receipts to Q4 gross receipts of 2019.

  • If an employer has fewer than 500 employees, qualifying wages for ERC eligibility purposes can now be included, regardless of whether employees are providing services or not.

Next Steps for an Employer to Claim the Employee Retention Credit

What was once a credit that most dismissed because they received PPP loans is now a credit that all businesses should take seriously. Determinations of eligibility and the subsequent documentation and reporting necessary for claiming the ERC is still murky and will likely be burdensome.

We urge you to consult with your tax advisor to explore whether or not you can benefit from these revisions to the CARES Act. The Freed Maxick Tax Team is prepared to help you navigate though these tricky waters and we are available for a complimentary consultation to this end.

Use the form below to connect with us or email Jonathan at jonathan.tretter@freedmaxick.com to begin this exploration.

PPP Reopening: Round 1 and Round 2 PPP Loan Updates | Freed Maxick

Here is what we know about the PPP reopening: PPP Round 1 loans will reopen to those businesses that have not yet received a PPP loan on Monday, January 11.…

PPP Loan Update-1

Here is what we know about the PPP reopening:

  • PPP Round 1 loans will reopen to those businesses that have not yet received a PPP loan on Monday, January 11. For the first 2 days, the SBA will only be accepting applications from lenders that are deemed “community financial institutions.”
  • PPP Round 2 loans will open Wednesday, January 13th, still only for those applying through a community financial institution.
  • The PPP loan program will then open to all participating lenders shortly thereafter (whatever that means as it is currently unknown).

For the PPP continued access program (PPP Round 1):

  • Most of the SBA interim final rules are all still in place, however the following are a few modifications.
  • Borrowers can use their 2019 or 2020 average monthly payroll to determine max PPP loan amount
  • Borrowers now gaining access to PPP program include certain 501(c) (6) organizations

For PPP Round 2 loans:

  • Many of the same rules, calculations and certifications remain from PPP Round 1
  • Application opens for entities using community financial institutions on January 13, 2021, shortly thereafter it will be available to all participating lenders and ends on March 31, 2021.
  • Maximum loan size $2million individual entity or $4million in aggregate for group considered a single entity
  • Must have a 25% or greater reduction in revenue for any 2020 quarter compared to same quarter in 2019, borrower can use an annual reduction if 2020 revenue is at least 25% less than 2019 revenue. Gross revenue generally includes all revenue from whatever sources; however, gross revenue does not include Round 1 of PPP funds and a few other exceptions.
  • 300 employee maximum, exception for certain borrowers (NAICS Code 72, 511110 or 5151) 300 per physical location
  • Must have previously received a Round 1 PPP loan and used or will use all funds prior to expected disbursement date of Round 2 PPP loan.
  • With respect to the “Affiliation Rules” as PPP Round 1, except ownership affiliation rules are waived for a business concern with not more than 300 employees that is either a business concern that is assigned a NAICS code beginning with 72, a business concern that is majority owner or controlled by a business concern that is assigned a NAICS code beginning with 511110 or 5151, or a nonprofit organization that is assigned a NAICS code beginning with 5151. For purposes of computing employees, all employees of any domestic and/or foreign affiliates are included in the employee count
  • Entities excluded from PPP Round 2 are the same entities that were excluded in Round 1 and Publicly traded companies, entities engaged in political or lobbying activities and pretty much any business that has any ownership or operation connection to China or the People’s Republic of Hong Kong.
  • Individual lenders will dictate what documents they require and in what form. Keep an eye out for information from your lenders on what they will specifically request with your application.

This blog is not intended to be all inclusive as there are certain items that are of specific interest and applicability to the hospitality, newspaper publishers, radio and television broadcasting industries and certain not for profits.

We will continue to keep you updated on the PPP reopening as more information becomes available. Visit our COVID-19 Response Center for the latest information.

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COVID-19 Relief Bill | Freed Maxick

It took months of contentious negotiations, but on the evening of December 21, Congress voted to approve a second stimulus package intended as a relief measure for businesses and individuals…

Congress

It took months of contentious negotiations, but on the evening of December 21, Congress voted to approve a second stimulus package intended as a relief measure for businesses and individuals adversely affected by the COVID-19 pandemic.

The $900 billion pandemic relief bill is the second largest federal stimulus after the Coronavirus Aid, Relief, and Economic Security (CARES Act), which was approved in March. Several aid packages under the CARES Act are set to expire December 31 and are now addressed in the new legislation. This new COVID-19 relief bill was combined with a massive $1.4 trillion federal government spending bill that will fund government programs through September 30, 2021. 

The legislation includes direct stimulus checks of $600 to individuals and enhanced unemployment benefits, as well as nearly $300 billion of Small Business Administration (SBA) funding for the Paycheck Protection Program (PPP), which stopped taking loan applications in August.

The following summarizes highlights of the stimulus package.

Small Business Loans

$325 billion in aid is being provided to small businesses, including minority-owned businesses and nonprofits. In particular, the PPP program is being reopened with $284 billion in forgivable loans for small business borrowers, also making it possible for distressed businesses to get a second loan in an effort to remain afloat.

What businesses need to know about this second round of PPP funding:

  • Maximum loan amounts of $2 million are being provided, with loans based on 2.5 months of payroll costs.
  • The process around forgiveness for loans of $150,000 or less will be simplified.
  • Forgivable expenses under the program will now include investments in facility modifications, PPE and other supplier costs that are necessary to operate safely through the pandemic.
  • Expenses paid with PPP funds will be tax-deductible.
  • The PPP retains a 60%/40% allocation between payroll and non-payroll costs for full loan forgiveness.
  • $12 billion in additional PPP loans are available for minority-owned businesses and the smallest businesses through community development financial institutions, as well as a new Neighborhood Capital Investment program.

Additional small business measures include:

  • $20 billion for Economic Injury Disaster Loans (EIDL) for businesses in low-income communities.
  • $15 billion for live venues, independent movie theaters and other cultural organizations. Note that this also includes local newspapers, television and radio broadcasters.
  • $3.5 billion will extend Small Business Administration (SBA) debt relief payments and $2 billion will be used to enhance SBA lending.

Businesses seeking additional PPP loans are advised to immediately prepare by gathering financial data to support their need for more funding.

Stimulus Payments

  • The CARES Act provided individuals with $1,200 in stimulus checks. This new legislation provides half that amount, with one-time $600 stimulus payments sent to individuals with incomes up to $75,000 based on 2019 income. The amount of payments will be reduced by $5 for every $100 of income above those thresholds, and will phase out entirely for individuals earning over $87,000, compared to the CARES Act phase-out of $99,000.
  • Eligible families will receive an additional $600 per child, which represents a $100 increase from the first round of relief funding.
  • Stimulus checks should be distributed through direct deposit by the beginning of next week.

Employee Retention Tax Credit

  • The relief package expands and extends the Employee Retention Tax Credit (ERTC) established under the CARES Act to assist small businesses and nonprofits in retaining their workers and continuing operations through the pandemic.

Unemployment Benefits

  • Unemployed individuals will receive $300 per week in federal benefits for 11 weeks—from the end of December 2020 through mid-March 2021. This amount represents a 50% decrease from the first federal boost, which ran out by the end of July.
  • Two other unemployment programs that were part of the CARES Act and were scheduled to expire this month have been extended:
    • Jobless benefits are being expanded under the Pandemic Unemployment Assistance program to gig workers, independent contractors, freelancers, self-employed individuals and specific other people impacted by COVID-19.
    • Individuals who exhaust their regular state benefits are eligible for an additional 13 weeks of payment under the Pandemic Emergency Unemployment Compensation program.
    • Both programs will close to new applicants March 14, 2021 and phase out in early April for existing claimants.

Schools and Child Care

  • K-12 schools and colleges will receive $82 million in relief aid, including assistance to help reopen classrooms safely.
  • $10 billion is allocated to support childcare providers impacted by COVID-19.

Vaccine Funding

  • $20 billion is being allocated to make vaccines available at no charge. Additionally, nearly $9 billion is being provided for vaccine distribution.
  • More than $22 billion is available to states to assist with COVID-19 testing.

Rental Assistance and Evictions

  • Eviction protection has been extended until January 31, 2021. It was previously set to expire December 31.
  • An additional $25 billion in rental assistance is being provided for individuals who lost their source of income during the pandemic.

Food and Nutrition

  • The legislation calls for Supplemental Nutrition Assistance Program (SNAP) benefits to be increased by 15% for six months.
  • $400 million will be available to food banks and food pantries through The Emergency Food Assistance Program.
  • $175 million will be available for senior nutrition services such as Meal on Wheels.

State and Local Funding

One of the most contentious issues of the stimulus negotiations, the $160 billion in funding to state and local governments, ultimately was not included in the final bill, as legislators opposing the measure argued that states were given $150 billion to use for COVID-19-related expenses in the first relief package. That said, state and local government leaders will have an additional year to spend the funding.

Do you have questions about the new $900 billion COVID-19 emergency relief bill? Connect with us by email at COVIDResponse@freedmaxick.com or call Freed Maxick at 716.847.2651.

New Federal and New York State Tax Benefits

Understanding the tax policy response to COVID-19

Tax relief policies at the federal, state and international levels are taking shape to help businesses recover from COVID-19 disruptions. Our COVID-19 Tax and Regulatory Relief resource center features the the most current information and analysis from our professionals, with the goal of addressing your immediate needs. From cash flow challenges to ensuring your employees are taken care of, Freed Maxick has provided these resources to help your business develop its response to the environment created by the coronavirus pandemic.

Families First Coronavirus Response Act

The Families First Coronavirus Response Act (the Act) was signed into law late on March 18, 2020, soon after the Senate passed the amended House bill sent to the Senate on March 17, 2020.

Families First Coronavirus Response Act Q&A

As provided under the legislation, the U.S. Department of Labor will be issuing implementing regulations. Additionally, as warranted, the Department will continue to provide compliance assistance to employers and employees on their responsibilities and rights under the FFCRA.

CARES Act – Coronavirus Stimulus Bill

On March 27, 2020, the President signed the Coronavirus Aid, Relief and Economic Security Act (CARES Act) into law. The CARES Act is a massive $2 trillion bill with an array of significant tax-saving provisions that impact both individuals and businesses and hopefully create needed cash flow. The CARES Act also could affect prior tax years.

CARES Act Provides Technical Amendment to Qualified Improvement Property

The 2017 Tax Cuts and Jobs Act (“TCJA”) amended IRC section 168(k) to eliminate qualified improvement property (“QIP”) as a specific category of qualified property eligible for additional first-year depreciation known as “bonus depreciation."

Use of Retirement Funds Under the CARES Act

Section 2103, Special Rules for Use of Retirement Funds of the “Coronavirus Aid, Relief, and Economic Security Act” or the “CARES Act” allows tax favored withdrawals from retirement plans and changes to loan provisions for those individuals directly impacted by COVID-19. Whether you are a Plan Administrator or a participant in a retirement plan it is important to understand these benefits.

The CARES Act: Elections Under Business Interest Limitation Rules Amended By IRS

On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security “CARES” Act into law. The $2 trillion CARES Act contains an array of tax provisions designed to increase deductions that are available to businesses, and by doing so, generate cash flow during the coronavirus (COVID-19) crisis.

CARES Act: IRS Issues Guidance on Deferral of Employer Social Security Taxes

The recently enacted $2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act) contains a provision which allows employers to defer the deposit and payment of the employer’s share of Social Security taxes, as well as certain railroad retirement taxes. Now, the IRS has issued additional guidance clarifying this.

CARES Act Provides Added Value to Net Operating Losses (NOLs)

By now we have all heard about the various stimulus and relief packages deployed by the government aimed at providing economic and fiscal relief to businesses of all sizes as well as individuals facing hardships during this challenging time. Included in the CARES Act were several income tax provisions aimed at providing liquidity and relief, specifically the provisions regarding net operating losses (NOLs).

New Federal and New York State Business Relief Programs

Understanding your options

On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a $2 trillion stimulus package thought to be the largest in U.S. history.  The CARES Act expands or establishes multiple loan programs for qualifying businesses, including the new SBA Paycheck Protection Program, the expansion of the Small Business Administration (SBA)’s existing Economic Injury Disaster Loans (EIDL) program and an additional program focused on mid-size businesses with 500-10,000 employees backed by $500 billion from the US Department of the Treasury’s Exchange Stabilization Fund to make loans, loan guarantees and other investments to provide liquidity to eligible businesses, states and municipalities.

Paycheck Protection Program

Click the link below to see all Freed Maxick content and insight related to the Paycheck Protection Program.

SBA Disaster Loan Program

In an effort to minimize economic impacts on small businesses resulting from the COVID-19 (coronavirus) pandemic, the Small Business Administration (SBA) is providing Economic Injury Disaster Loans (EIDLs) to small businesses in designated states and territories.

Federal Government Expands Access to Loans for Small and Midsize Businesses Under Title IV of the CARES Act

Under certain conditions and with appropriate certifications, your business may be eligible under the CARES Act to receive a loan through the federal government to help you through the Covid-19 crisis. Although funds under the Main Street Business Lending Program have not yet been distributed, guidance for borrowers has been issued in preparation for the funding flow to be initiated.

Unemployment Insurance Benefits in NYS Under the CARES Act

In response to the Coronavirus Pandemic, on March 27, 2020, President Trump signed the Coronavirus Aid, Relief and Economic Security (CARES) Act, a $2 trillion stimulus bill. The Relief for Workers Affected by Coronavirus Act – which is the unemployment insurance (UI) portion of the Act – provides enriched unemployment benefits to eligible claimants.

Federal Reserve Announces an Expansion of Scope and Eligibility of the Main Street Lending Program

On April 9th, the Federal Reserve provided details regarding actions they were taking to support small and mid-sized businesses impacted by the coronavirus pandemic. One of these programs was the Main Street Lending Program (MSLP or the Program).

FASB Provides Guidance on COVID-19 Related Lease Concessions

With the uncertainties surrounding the COVID-19 pandemic, the Financial Accounting Standards Board (FASB) has received several questions from stakeholders about the application of Topics 840 and 842, Leases. Specifically, the inquiries pertain to the accounting and disclosure of new lease concessions in previously executed contracts, as a result of the pandemic.

Regulation Compliance Reliefs

What you need to know

COVID-19 is presenting challenges for many companies. To address these challenges, many regulators/agencies have issued orders, releases and statements which allow, subject to certain conditions, companies to take advantage of any applicable relief. Companies need to ensure they meet all applicable criteria and are in compliance with the requirements.  Companies also need to consider matters related to financial reporting.  Freed Maxick has provided the resources below help you address these concerns.

April 15, 2020 Due Date Information

The 2019 income tax filing and payment deadlines for all taxpayers who file and pay their Federal income taxes on April 15, 2020, are automatically extended until July 15, 2020. This relief applies to all individual returns, trusts, and corporations. This relief is automatic, taxpayers do not need to file any additional forms or call the IRS to qualify.

Financial Statement Considerations

The effects of the coronavirus are evolving rapidly (hour-by-hour, day-by-day) and are unique for each entity's circumstances. The following is a high-level overview of a few matters related to financial reporting for consideration during this critical time.

New York State Tax Extension Update

New York has extended the April 15 due date to July 15, 2020, for personal income tax and corporation tax returns originally due April 15, 2020, due to the coronavirus pandemic. The extension applies to returns for individuals, fiduciaries, and corporations. In addition, taxpayers are allowed to defer all related tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed.

Regulators and Agencies Extend Much-Needed Regulatory Relief to Businesses

COVID-19 is presenting challenges for many companies. To address these challenges, many regulators/agencies have issued orders, releases and statements which allow, subject to certain conditions, companies to take advantage of any applicable relief. Companies need to ensure they meet all applicable criteria and are in compliance with the requirements outlined below, as in many cases, extensions are not automatic.

IRS Extends More Tax Deadlines

To help taxpayers, the Department of Treasury and the Internal Revenue Service announced today that Notice 2020-23 extends additional key tax deadlines for individuals and businesses.

FASB Proposes Lease Standard Deferral

On April 8, 2020, the FASB issued a proposal to defer the effective date for ASU 2016-02, Leases, and its subsequent amendments. For private companies and private not-for-profits, the standard would be effective for fiscal years beginning after December 15, 2021. For public not-for-profits (i.e. those that have issued, or are conduit bond obligors for, public debt) the standard would be effective for fiscal years beginning after December 15, 2019, so long as the entity has not yet issued financial statements.

Industry Updates

Industry specific direction and guidance

Financial Institutions

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Healthcare

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Higher Education

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Non-Profit

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Real Estate

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Business Continuity in the COVID-19 Environment

Business Continuity in the COVID-19 Environment

To ensure business continuity it is important to react quickly to mitigate impacts and other risks and to prepare the organization for the further disruptions related to the COVID-19 Pandemic. Managing business continuity includes concerns around infrastructure, cybersecurity, remote employees, business, operational and communication risks, with the aim of managing an organization through new challenges and risks while maintaining continuity of operations and production.

Notification of Enforcement Discretion for Telehealth Remote Communications During the COVID-19 Nationwide Public Health Emergency

On March 17, 2020, the Office for Civil Rights (OCR) announced the “Notification of Enforcement Discretion for Telehealth Remote Communications During the COVID-19 Nationwide Public Health Emergency.” This notification provided guidance on the use of video conferencing technologies to provide telehealth services to a health care providers patients, and communicates the OCR’s official stance on the issue as the country continues to address the COVID-19 pandemic.

Why is Privileged Access Management Important for Your Organization?

With evolving and steadily increasing cyber-attacks, many organizations are not taking steps to stop the abuse of privileged credentials. A recent survey from Centrify, a privileged access management (PAM) company, suggested that of the 1,000 IT decision makers surveyed in the U.S. and U.K., 74% of breaches involved access to a privileged account.

Adapting to a Remote Work Environment

For much of the workforce, life has changed drastically over the past few weeks. The combination of school closings and mandatory work from home orders can have a significant impact on your ability to stay focused and productive. We have put together some suggestions to help you adjust to your new normal. Ultimately, we are all a bit different and you have to find what works best for you, but here are a few suggestions to get you started.