Your McCarthy Update 

Marty McCarthy, CPA, CCIFP
Focused on You. Dedicated to Your Success.
January 18, 2021

Accounting & Tax News
(Accounting Today) IRS to delay tax season until February 12. The IRS plans to open the tax-filing season on February 12, although it is making its Free File program available. Tax season normally begins in late January. The IRS said that taxpayers can begin working on their taxes early with the Free File software. That will give taxpayers an opportunity to claim tax credits like the Recovery Rebate Credit and other deductions. Read more.
 
(State of New Jersey) State reducing unemployment insurance 2021 payroll tax increase. Governor Murphy signed legislation reducing the unemployment insurance (UI) payroll tax increase that businesses would have faced in July 2021. Employer contributions will now increase gradually over three years. Read the UI payroll tax announcement.
 
(State of New Jersey) Economic tax incentives coming. Governor Murphy signed the New Jersey Economic Recovery Act of 2020, which will provide economic tax incentives for targeted programs across the State. The NJEDA will produce the rules and program requirements over the coming months. Read the recovery act announcement.
 
Business News
(Harvard Business Review) Creating a post-COVID business plan. To plan for a post-pandemic world, businesses must understand what your stakeholders’ behaviors will look like after the pandemic. Some behaviors will return to their pre-crisis state; others will be transformed; and others will disappear entirely. Drawing on research into habit formation, technology adoption and behavioral economics, the authors offer a framework to help companies make reasonable predictions on what happens next. Read more.
 
Construction & Real Estate News
(Capitol Press) Why is there a lumber shortage in the U.S. Industry experts say several events led to the lumber shortage: COVID-19 lockdown orders and closures, new safety protocols that slowed production at mills, and a spike in home remodeling while Americans were quarantined followed by a massive wildfire season. Read more.
 
(Construction Dive) 2021 Outlook: Top cities to watch for construction. These five metro areas are destined for a strong showing this year, according to the contractors that work in them. Read more.
 
(Construction Dive) The 13 construction sectors contractors expect to shrink in 2021. Contractors expect 13 of 16 construction categories to shrink in 2021, with only alternative healthcare facilities, warehouses and water and sewer facilities eking out small gains. Read more.
 
(The Washington Post) Experts predict what the 2021 housing market will bring. Many experts are predicting another strong housing market in 2021. They are forecasting increased demand from buyers who delayed purchasing homes because of the pandemic; from existing homeowners who need larger spaces to accommodate parents working from home and children attending school virtually; and from condo owners who are seeking to escape multifamily buildings for single-family houses to mitigate exposure to the virus. Read more.
 
COVID-19 Related News
(Accounting Today) IRS blesses tax breaks on forgiven PPP loans after law change. The Internal Revenue Service will allow businesses that got their Paycheck Protection Program loans forgiven to write off expenses paid for with that money, shifting policy after Congress passed new legislation last month. Learn more.
 
(Fundera) PPP forgiveness for loans under $50,000. If you received a PPP loan of $50,000 or less, the SBA and the Treasury have unveiled a new way to apply for Paycheck Protection Program loan forgiveness. Using a new form, SBA Form 3508S, business owners can apply for forgiveness for their loan with simpler paperwork and with new guidelines. Crucially, the SBA is no longer requiring that businesses with a PPP loan of $50,000 or less maintain their pre-pandemic employee headcount or salaries/wages to receive full forgiveness if they use this form. Read more.
 
(GlobeST.com) $25B assistance program launches as renters continue to struggle. The Treasury Department has launched a $25 billion rental assistance program promised under the most recent relief act passed by Congress. The program will assist households unable to pay rent and utilities due to the COVID-19 pandemic. Learn more.
 
(Journal of Accountancy) Guidance issued for PPP first-draw loan increases, reapplications. The U.S. Small Business Administration (SBA) released a procedural notice that details the requirements for Paycheck Protection Program (PPP) borrowers to reapply for a PPP loan or request an increase to a PPP loan. The procedural notice applies primarily to first-draw PPP loans approved by August 8, 2020, which is when the first iteration of the program stopped accepting applications. Learn more.
 
(Philadelphia Business Journal) PPP Round 2: Here's which Philadelphia-area banks are and aren't participating. With the Paycheck Protection Program's $284 billion restart now underway, the Philadelphia Business Journal asked local banks whether they plan to participate and, if so, whether they will accept applications from those who are not existing customers. They also asked them to assess the level of demand from local businesses. Read more.
 
(Philadelphia Business Journal) PPP to reopen to all lenders next week. The Paycheck Protection Program will reopen in full on January 19. Learn more.
 
(Philadelphia Business Journal) SBA picks up pace on PPP loan forgiveness. The SBA has processed forgiveness for 1.1 million Paycheck Protection Program loans totaling more than $100 billion, the agency announced. That is about 85% of the 1.3 million — or 1,346,125, to be exact — forgiveness applications it has seen so far, adding up to a total value of $170.5 billion. About 88% of loans under $50,000 that have sought forgiveness have received it. Read more.

We will continue to keep you updated. Please visit our COVID-19 Resource Page for more alerts.

Feel free to contact any member of our team at (610) 828-1900 (PA) or (732) 341-3893 (NJ) with questions. Rich Higgins, CPA, managing principal – New Jersey office can be contacted at Richard.Higgins@MCC-CPAs.com. I can be reached at Marty.McCarthy@MCC-CPAs.comAs always, we are happy to help.

Stay safe,

Marty McCarthy, CPA, CCIFP
Managing Partner
McCarthy & Company

Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).