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HSC CORONAVIRUS
C
OMMUNICATION
April 20, 2020
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HSC COVID-19 Fast Response Team
We are here to help!
In these uncertain times with multimedia channels reporting conflicting and sometimes incorrect information, our firm is working to add clarity to this situation by providing new and verified information as it becomes available to us. We have also set up a Coronavirus Resource Center on our website for ongoing information.
In addition, we have created the HSC COVID-19 Fast Response Team to serve our clients in addressing the difficult decisions they are being faced with on a daily basis. This dedicated multi-disciplinary team consists of our tax, payroll, HR, capital markets and accounting professionals.
If you have questions or would like to speak with this team please contact your HSC team member or Kyle Wininger, CPA, CICA, CVA, CFE at [email protected].
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NEW FAQs on COVID-19 related Sick Leave and Family Leave
The Internal Revenue Service posted new Frequently Asked Questions (FAQs) regarding COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses enacted by
The Families First Coronavirus Response Act (the "FFCRA").
FAQ's include the following and more:
- When can employers start claiming the credits?
- How do employers claim the credits?
- What documentation must be retained?
- Are similar tax credits available to self-employed individuals?
This is very helpful information for those companies who are beginning to have sick and family leave cases that fall within the
FFRCA.
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Ten Things We Need To Know About Paycheck Protection Program Loan Forgiveness
Excerpted from Forbes article by Tony Nitti
What we do know....On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Securities (CARES) Act, a $2.3 trillion relief package designed to help individuals and businesses weather the economic damage caused by the COVID-19 pandemic.
The headliner of the CARES Act was the creation of the Paycheck Protection Program (PPP), a new loan package designed to put $350 billion into the hands of small businesses for use in paying employee wages and other critical expenses over the coming weeks and months. As of the morning of April 15
th, nearly $250 billion in cash had made its way to over one million small businesses, and Congress had already begun negotiations on a second round of PPP funding.
Now, let's dive into everything we DON'T know about forgiveness.
Ten things, to be exact.
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Paycheck Protection Program - Act II
If you have applied for or received a Paycheck Protection Program Loan, you will soon be faced with the second act. . . maintaining compliance and maximizing forgiveness. If you missed our special webcast presented by our COVID-19 Fast Response Team members to learn about how the forgiveness calculations work, what still needs to be explained in the regulations, and how to maintain compliance with your PPP Loan, you can watch at the link below.
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Accelerating COVID-19 Losses Into 2019 To Improve Cash Flow
For companies experiencing financial loss due to the COVID-19 economic crisis, finding ways to quickly increase cash flow is a top priority. One opportunity to be considered is whether COVID-19 losses incurred in the current year can be moved into 2019 to offset income or to create a net operating loss eligible for
the revived carryback provisions.
Under section 165(i), companies experiencing financial loss due to natural disasters may accelerate those losses to the fiscal year immediately preceding the crisis event.
The following are examples of potential losses, if directly attributable to COVID-19, that could be eligible under this provision:
- Inventory scrapped due to spoilage during government shutdown;
- Worthless securities (but not bad debts);
- Closure costs of store and facility locations;
- Complete abandonment of leasehold improvements;
- Permanent retirement of fixed assets;
- Abandonment of pending business deals for costs otherwise capitalized;
- Termination payments to cancel contracts, leases or licenses;
- Prepaid events, travel, conference space, hotel rooms, etc. when taxpayer is not provided a refund or credit;
- Prepaid raw materials or other items to fulfill a contract and the contract has been cancelled;
- Mark-to-market securities; or
- Losses from the sale or exchange of property.
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Keeping Other Members of Your Team Informed
If you would like other members of your team to begin receiving this communication, please forward to each individual and they can subscribe here or email Leslie Wight at [email protected] and she will add them to the communications.
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Disclaimer:
The information contained in this email is for general guidance on matters of interest only. The publication does not, and is not, intended to provide legal, tax or accounting advice.
Internal Revenue Service rules require us to inform you that this communication may be deemed a solicitation to provide tax services. This communication is being sent to individuals who have subscribed to receive it or who we believe would have an interest in the topics discussed.
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Harding, Shymanski & Company, P.S.C.
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