The New England Accounting Advisor

The Employee Retention Tax Credit (ERTC) was established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, but limitations on its availability tempered interest in the relief measure. That is about to change, thanks to significant changes made on Dec. 27, 2020, by the Consolidated Appropriations Act, 2021 (the Act). The ERTC is now available to employers that received loans under the Payroll Protection Program (PPP), so any employer meeting ERTC eligibility criteria can benefit. Because employers potentially benefit from the enhanced ERTC on a retroactive basis, employers should immediately begin analyses to identify and calculate the value of retroactive or prospective ERTC benefits.

Topics: IRS, tax relief, tax credit, COVID19, Coronavirus, CARES Act, PPP, PPP Loan Forgiveness, Consolidated Appropriations Act, Employee Retention Tax Credit, The Act, ERTC

Amid a chaotic week in Washington D.C., final election results came in that determined the composition of the Senate. Both Georgia Senate seats went to the Democratic candidates, which tipped the balance of power in the Senate to the Democratic party, with Vice President-Elect Kamala Harris presiding as the presumed tie-breaking vote in a chamber evenly split 50-50. This assumes that the Senate Democrats vote along party lines, which is far from certain.

Topics: election year, IRS, Taxes, Election, Tax Reform, senate, COVID19, Coronavirus, Republican Party, Biden, Harris, #taxplan, Filibuster, democratic party, Legislative Session

The Consolidated Appropriations Act passed on Dec. 27, 2020 provided some much needed COVID-19 relief measures along with its government funding provisions. After much back and forth among Congress about the size and scope of the stimulus package, several opportunities emerged in the final legislation, the first major stimulus package released since the spring’s Coronavirus, Aid, Relief, and Economic Security (CARES) Act. Below are eight actions your organization may want to take as part of its recovery from COVID-19 disruption.

Topics: payroll taxes, FSA, student loans, tax credit, tax legislation, Paid Family and Medical Leave, COVID19, Coronavirus, CARES Act, Coronavirus Aid, Relief, and Economic Security Act, Employee Retention Credits, PPP, charitable contributions, SBA, loan forgiveness, Stimulus, Employee Payroll Tax Deferral, PPP2

After a somewhat torturous journey to becoming law, HR 133, Consolidated Appropriations Act of 2021, was signed late on December 27, 2020. It is a massive piece of legislation covering much ground. Notably, it includes both coronavirus relief as well as the appropriation portion to keep the government running for the next fiscal year. The law includes direct economic impact payments of $600/each as well as temporary extension of supplemental unemployment relief. Further, it includes Paycheck Protection Program (PPP) loan expansion.

Topics: retirement plans, IRS, employee benefit plan, FSA, Employee Benefits, Paid Family and Medical Leave, Stimulus, cafeteria plan relief, educational assistance, mental health parity, pharmacy

On Dec. 27, 2020, President Trump signed into law the Consolidated Appropriations Act (the Act) that had been passed with overwhelming majorities in both Houses of Congress on December 21. Trump delayed the signing as he pursued, with the approval of Democratic members of Congress, an increase in the amount of Recovery Rebate checks from $600 to $2,000. Without explanation or fanfare, the President signed the bill to the surprise of members of both parties. On Dec. 28, the House passed a stand-alone bill to increase the stimulus payments to $2,000, but with voting along party lines it is expected to die in the Senate.

Topics: individual tax, tax, tax deductions, Charitable contribution planning, Paid Family Leave, Paycheck Protection Program, PPP Loan, Stimulus, Employee Payroll Tax Deferral, Consolidated Appropriations Act

The 9th Annual New England State & Local Tax Forum took place online and ran through November 17-19, 2020. Due to the unprecedented year we are having due to COVID-19, the Forum’s Joint Boards made the decision to convert the 2020 live conference in Newton to a virtual conference. This year the Forum was held over three consecutive afternoons for 2 hours each day. Each year, the Forum provides the opportunity to learn about new developments in the area of tax law.

Topics: State tax, Sales Tax, sales and use tax, state and local tax (SALT), new england state and local tax, Ann Brown, New England SALT Forum

On Nov. 18, 2020, the IRS weighed in on whether expenses used to support Payroll Protection Program (PPP) loan forgiveness are deductible, assuming the forgiveness occurs in the year after the expenses are incurred. In Rev. Rul. 2020-27, the IRS doubled down on its previous position by holding that expenses incurred in the year prior to forgiveness are also nondeductible.

Topics: Barret Pinto, PPP, PPP Loan Forgiveness, Payment Protection Program

The IRS and the Social Security Administration have released 2021 inflation-adjusted figures for more than 50 tax provisions. In addition to a 1.3% cost-of-living adjustment (COLA) for Social Security beneficiaries, details about adjustments to tax rate schedules, exemptions, and various thresholds for deductions and credits were announced. The tax year 2021 adjustments generally are used on tax returns filed in 2022.

Topics: individual tax, tax planning, tax deductions, business tax, Taxes, cost-of-living, tax credit, Tax Cuts and Jobs Act, TCJA, Joanna Powell, COLA, AMT

For much of 2020, internal audit departments have tested controls using attributes to facilitate work-from-home (WFH) arrangements. As the year and internal audit work for many organizations comes to a close, reconciling if the controls adjusted for remote work arrangements will pass external audit scrutiny is top of mind for many CFOs and internal audit professionals.

Topics: Kevin Higgins, COVID19, Coronavirus, remote work, work from home

On Dec. 7, 2020, the Massachusetts Life Sciences Center (MLSC) began accepting applications for a new round of the Center’s Life Sciences Tax Incentive Program, which offers tax incentives to companies engaged in life sciences research and development, commercialization and manufacturing in Massachusetts. The Program, part of the state’s Life Sciences Initiative, is approved to award up to $30 million in tax incentives each year (up from $25 million for periods prior to Jan. 1, 2019). The primary goal of the program is to incentivize life sciences companies to create new sustained jobs in Massachusetts.

Topics: Michael Corrente, Tax incentive, life sciences, MLSC, Massachusetts Life Sciences Tax Incentive Program