HT2 CLIENT UPDATE

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IRS CLARIFIES EMPLOYEE RETENTION CREDIT ELIGIBILITY FOR PPP LOANS AND 2020 CLAIMS

The IRS has released additional guidance in Notice 2021-20 on the Employee Retention Tax Credit (ERC) with clarifications on the retroactive changes for expanded eligibility applicable to 2020. Employers who received a Paycheck Protection Program (PPP) loan have been waiting on guidance on claiming the credit in combination with forgiveness of their loan. The provisions outlined here apply to retroactive claims for 2020 as well as providing a plan for those yet to seek forgiveness. READ MORE HERE

TAX DEADLINE HAS BEEN MOVED TO MAY 17, 2021 The FTB has confirmed that California will follow the IRS filing and payment extension date of May 17, 2021, for individual taxpayers only. Like the IRS extension, the California extension will not apply to the estimated tax Q1 payment date of April 15, 2021. Taxpayers must pay their Federal and California estimated tax by April 15, 2021, to avoid penalties. There is still no news on AB 80, the PPP forgiveness deduction conformity bill. We wait while the state tries to clarify whether we will lose federal funding from the American Rescue Plan Act if California enacts this legislation. Because it’s unlikely, in our opinion, that this will happen quickly, we recommend filing extension vouchers for any affected business and include the estimated state tax on the disallowed deductions. We will continue to keep you informed if/when any changes happen. Friday, March 19th is still the deadline for your tax information to be received to give us time to do calculations for your 1st quarter estimated tax payments.

KEY TAX PROVISIONS IN THE AMERICAN RESCUE PLAN ACT

The American Rescue Plan Act (ARPA) has been signed into law by President Biden and makes significant updates to several tax provisions to alleviate some of the pandemic’s financial burdens for individual taxpayers and businesses. Updates include expansions and extensions of various tax credits such as the employee retention credit (ERC), COBRA continuation coverage, Affordable Care Act (ACA) subsidies, and more. The bill also includes $1.46 billion for the IRS to manage the additional responsibilities on top of the annual tax filing season. Here are the critical tax updates. READ MORE HERE

BUSINESS HIGHLIGHTS IN THE NEW AMERICAN RESCUE PLAN ACT

President Biden signed the $1.9 trillion American Rescue Plan Act (ARPA) on March 11. While the new law is best known for the provisions providing relief to individuals, there are also several tax breaks and financial benefits for businesses. READ MORE HERE

NEW PPP CALCULATION RELEASED FOR FORM 1040, SCHEDULE C FILERS

Form 1040, Schedule C taxpayers received an updated interim final rule (IFR) on the Paycheck Protection Program (PPP) from the Small Business Association (SBA). The IFR clarifies guidance released on Feb. 22 that made changes to how self-employed and sole proprietors could calculate their maximum loan amount to help expand the program for these groups. Approximately 2.6 million sole proprietors have applied for PPP loans, and it is estimated there are about 25 million sole proprietors across the country. READ MORE HERE

2021 Easy Reference Federal Tax Data Sheet for 2021 2021 Inflation-Adjusted Retirement Plan Amounts

NEWS YOU CAN USE 2020-2021 Tax Planning Guide READ MORE HERE How to Select the Right Loan Forgiveness Application READ MORE HERE Taxpayers should be on the lookout for new scams  READ MORE HERE E-signature for individual tax returns available to our clients VIDEO PRESENTATION

HAMILTON THARP, LLP HAS A DEDICATED COVID-19 RESOURCES PAGE UPDATED DAILY! VISIT THE PAGE HERE

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