Your COVID-19 News Update
Marty McCarthy, CPA, CCIFP
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Focused on You. Dedicated to Your Success.
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September 21, 2020
Now that we are six months into the COVID-19 pandemic, we decided to streamline our updates and present you with one alert every Monday. Here are the articles we felt are important to share with you:
(AICPA) - Net operating losses: CARES Act changes. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136, was enacted March 27, 2020, to provide wide-ranging relief to businesses and individuals adversely affected by the coronavirus pandemic. Among its many business tax relief provisions, the CARES Act amended the net operating loss (NOL) rules under Sec. 172 that were previously amended by the law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97. The IRS has issued guidance on how taxpayers can claim the new NOLs and how to make an irrevocable election to waive the five-year carryback. Read more.
(Accounting Today) - Working from home may create home office, nexus issues. Many taxpayers who thought, back in March 2020, that the relocation of their workplace from somewhere “downtown” to home was merely a temporary circumstance are continuing to work remotely. For some, this is due to the ongoing pandemic or the need for their workspace to be reconfigured in light of the virus. And while it was a disruption in their work life to begin with, many have decided they prefer to continue their work out of a home office. Read more.
(Accounting Today) - IRS gives some answers to payroll deferral questions. When President Trump issued an executive memorandum on Aug. 8, 2020, offering payroll tax deferral until the end of the year, a big question was whether the deferral of the employee portion of Social Security tax was optional or voluntary to the employer. Guidance was issued 10 days later, on Aug. 18, 2020, in Notice 2020-65. Read more.
(Accounting Today) - Senate, Supreme Court opt out of Trump payroll tax deferral. The U.S. Senate and Supreme Court are joining the House in not implementing President Donald Trump’s order allowing employers to defer payroll taxes owed by workers, Missouri Senator Roy Blunt said Tuesday. Discover why.
(Accounting Today) - Penalty relief may be available to those who miss Sept. 15 deadline due to COVID-19. The September 15 tax filing deadline is causing worries among taxpayers and tax practitioners in the midst of the pandemic, but the American Institute of CPAs believes that taxpayers will be able to avoid tax penalties if they write “COVID-19” at the top of their tax return. Learn why.
(Construction Dive) - Contractors prepare to face COVID-19 challenges for the long haul. Watching cashflow, refocusing on core skills, and having backup plans for suppliers and materials are all in contractors' toolkits as they look to the rest of 2020 and beyond. Read about what some contractors are doing.
(Construction Dive) - Many banks not yet accepting PPP forgiveness applications. Institutions are waiting for more guidance from the federal government as well as potential legislative action on the Paycheck Protection Program. Although the Small Business Administration opened its Paycheck Protection Program forgiveness portal on Aug. 10, many contractors have found that their banks are not ready to accept applications. The portal allows lenders to submit completed PPP loan forgiveness applications to the SBA for its review. Read why.
(Construction Dive) - What to do when an employee is afraid to return to the jobsite due to COVID-19. If an employee refuses to work although there is no imminent danger, "the courts have made it clear that those employees don’t have to be paid," says a human resources expert. Read more.
(CNBC) - Americans are raiding retirement savings during coronavirus pandemic. As households struggle to make ends meet, more Americans have been forced to halt or raid their retirement savings in this coronavirus-induced recession. Read more.
(GlobalSt.com) - Net Lease Grabs More Volume. Investors flock to long-term leases and creditworthy tenants during the economic downturn. While net-lease investment fell significantly in the second quarter, the sector also took its largest share ever of commercial real estate volume, according to the latest research from CBRE. The net lease sector, which includes office, industrial and retail properties, posted 20.2% of total commercial real estate volume in Q2. In Q1, it secured 13.3% of total CRE volume, which is the sector’s highest percentage on record. Read more.
(Journal of Accountancy) - IRS Guidance on COVID Testing. In Notice 2020-66, the IRS said that Medicaid coverage of COVID-19 testing and diagnostics services would not be considered minimum essential coverage for purposes of the Sec. 36B premium tax credit. Normally, a taxpayer is allowed a premium tax credit only for months that are coverage months for individuals in the taxpayer’s family, as defined in Regs Sec. 1.36B-1(d). Learn why.
(Office of Governor Murphy) - Millionaire’s Tax in Revised NJ FY2021 Budget. Governor Phil Murphy, Lieutenant Governor Sheila Oliver, Senate President Steve Sweeney, Assembly Speaker Craig Coughlin, Senate Budget Chair Paul Sarlo, and Assembly Budget Chair Eliana Pintor Marin announced that that the revised Fiscal Year 2021 (FY2021) budget will raise the state’s gross income tax rate on income between $1 million and $5 million per year. The rate will increase from the current 8.97% to 10.75% for every dollar earned between $1 million and $5 million annually, bringing it in line with the rate for income earned over $5 million annually and back to the rate paid in 2010. The Governor and legislators also announced a tax cut that will pay an up to $500 rebate to approximately 800,000 New Jersey families. Read more.
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.com. As 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).
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