Hi There!
Breaking news! A brand-new stimulus package is going through the approval process hopefully today. As soon as we get the details, we will pass it on.
Tax Planning
As part of your tax planning and lowering taxable income for 2020: for those who received a non-PPP SBA loan, payments have been deferred for up to one year. However, interest is still accruing during the deferment period. If you are looking for an end of year tax deduction, estimate what your interest accrual is and go online and pay it before December 31, 2020. Your payment will go towards interest first and, therefore, be deductible. Do not do this for PPP loans as most or all of the loan and accumulated interest will be forgiven.
Connecticut PFML
On June 25, 2019, Gov. Ned Lamont signed the Paid Family Medical Leave (PFML) program. It allows eligible employees working in Connecticut the opportunity to take paid leave to address personal or family needs. Employers who have one or more employees must participate in this program. Sole proprietors and self-employed individuals can opt-in to the program and if they do, they need to remain in the program for a minimum of three years.
The PFML will be administered by a new agency, the Connecticut Paid Leave Authority. If employers offer a private Paid Family and Medical Leave plan, they may apply to the Connecticut Paid Leave Authority for an exemption from participating in the state’s program. If this program is found to be comparable to Connecticut’s, and the majority of the employer’s employees have agreed to the plan, the employer may receive an exemption from participation in the state’s program. The Connecticut Paid Leave Authority only offers payment for qualifying events, but does not offer job protection to employees taking leave.
The funding to support the CTPL program will come in the form of employee payroll deductions beginning January 1, 2021. These payroll deductions are capped at one-half (0.5%) of total wages, up to the Social Security wage contribution rate that is set by the federal government. There is no employer contribution. Employers will be responsible for withholding and submitting the payroll deductions for each employee. These deductions must be submitted to the Connecticut Paid Leave Authority quarterly. Please go to ctpaidleave.org for further explanations.
What you need to do:
· Go to: register your business and click “get started”
· Wait for your confirmation email and verify.
· Go back to: ctpaidleave.org
· Click on “for employers in Connecticut”
· Go thru the registration process. You will need your contact information, your federal Employer ID# and your NAICS industry code.
You will get an additional email with your registration confirmation and your registration number. You need to forward that number to your payroll company. Please also forward the email to our office so we can keep it in your files. Email to: sarahd@smithpavanocpa.com or jills@smithpavanocpa.com.
PPP Update
By now, we have contacted everyone and have been applying for forgiveness as each bank opens up the process.
Unemployment Benefits
If you received unemployment benefits in 2020, the CTDOL just announced they will be mailing the 1099G tax forms in late January. You can also get them online, as always. Individuals who received regular Unemployment Insurance (UI), Pandemic Emergency Unemployment Compensation (PEUC), and Extended Benefits (EB) will be issued one single UC-1099G form. Individuals who received Pandemic Unemployment Assistance (PUA) benefits will be issued a separate UC-PUA-1099G form.
1099-MISC Forms
For those of you who do your own 1099’s, please be aware that starting in 2020 there is a new form, 1099-NEC to report non-employee compensation. This replaces the Box 7 payments reported on the 1099-MISC. Interest, rent and other income payments will continue to be reported as in the past.
Thank you and be well!
Rich Pavano, CPA
203.933.1679
