COVID-19 Response Resource Center: Timely Counsel for your Business

The Consolidated Appropriations Act of 2021, enacted late last year, includes several tax related changes and incentives affecting businesses.

Congress overruled guidance from the Internal Revenue Service to provide that expenses paid with Payroll Protection Program loans (PPP) will be deductible even if the PPP loans are forgiven. The new law also clarifies how forgiveness works in the context of a partnership or S corporation.

Congress modified the Employee Retention Credit in two important ways. First, businesses that receive PPP loans may now qualify for the employee ... Read More 

On Aug. 8, 2020, President Trump issued a memorandum calling for the Secretary of Treasury to allow for the deferral of payroll tax withholding on the employee portion of certain payroll taxes. This memorandum is separate from the ability of employers to defer their own payroll tax obligations under the CARES Act and is intended to provide stimulus to the economy by temporarily boosting take-home wages. On Aug. 28, 2020, the Department of Treasury and Internal Revenue Service issued Notice 2020-65, allowing employers to defer payroll tax withholding, but requiring all ... Read More 

The USDA will begin accepting applications for direct payments to farmers Tuesday, May 26. These payments originate from the USDA Coronavirus Relief Fund Program (CFAP) that aims to reimburse farmers who have lost revenue from price declines or market disruptions.

Eligibility

The USDA expanded eligible producer groups to the categories listed below. Additionally, the USDA seeks comment from ineligible producers “who believe they’ve suffered a five percent-or-greater price decline between January and April 2020, and who face additional marketing costs due to ... Read More 

The Coronavirus Aid, Relief, and Economic Security Act (CARES) enacted on March 27, 2020 contained several provisions related to the provision of loans by the Small Business Administration (SBA), including loans under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL). Unlike traditional SBA loans, which are not available to non-profit entities, faith-based organizations will generally be eligible for loans under these programs.

Requirements

The SBA has issued guidance that any faith-based organization is eligible to receive the PPP and ... Read More 

On Friday, April 17, 2020, USDA introduced the Coronavirus Food Assistance Program (CFAP), which aims to compensate farmers, maintain supply chains, and support food security. At least $19 billion will be distributed to agricultural producers under CFAP through two mechanisms, direct payments and commodity purchases. Note that the Agricultural Marketing Service (AMS) expects to release its solicitation for food box distribution proposals on Friday, April 24, 2020, with applications due by the following Friday, May 1.

Direct Payments: $16 billion

Commodity producers will ... Read More 

When a company’s customers declare bankruptcy, the company faces significant risk. These risks range from the obvious—for example, nonpayment of past-due invoices—to the not-so-obvious—e.g., preferential and voidable transfer actions. Given that multiple industries, including retail and food service, have been sidelined due to COVID-19, businesses will likely find many of their individual and commercial customers in vulnerable situations for the immediate and intermediate future.

However, there are ways to minimize vulnerability by following a reasonable ... Read More 

The Coronavirus Aid, Relief, and Economic Security Act (CARES) enacted on March 27, 2020 contained several significant business-related tax changes highlighted below. Many of these changes are limited in the period to which they apply, and several have retroactive application that may require filing an amended tax return in order to claim the full benefit available.

Business Interest Deductions

The amount of a taxpayer’s business income that may be offset by business interest generally is limited to 30%. CARES increases this limit to 50% for 2019 and 2020, subject to special ... Read More 

Much of the focus of the attention generated by the CARES Act has been on the Payroll Protection Program (PPP) through the Small Business Association. Loans through the PPP have the potential to be forgiven on a tax-free basis.  Please see our client alert for a discussion of the PPP. 

The CARES Act also adds relief in the form of employee retention credits and a delay of employer payroll taxes highlighted below.

Employee Retention Credit

The Employee Retention Credit is a fully refundable payroll tax credit that qualifying employers may receive by continuing to fund ... Read More 

The Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, has been passed by Congress and awaits signature by the President. The CARES Act includes the much anticipated Paycheck Protection Program (PPP), establishing the guidelines for a new category of loans guaranteed by the Small Business Administration (or SBA) that will soon be available to certain eligible businesses. The loans are intended to provide borrowers much-needed liquidity during these uncertain times, and, notably, the principal amounts borrowed under the PPP may be entirely forgiven under ... Read More 

The Golden LEAF Foundation is providing $15 million in funding to launch a rapid recovery loan program in response to economic losses for small businesses related to COVID-19. The program is being launched by a consortium of public, private and non-profit partners who have come together to help stabilize North Carolina’s small business sector during these uncertain times. The program will be managed by the NC Rural Center and is designed to provide a bridge for small businesses needing immediate capital while they are in the process of applying for a Small Business Administration ... Read More 

The U.S. Small Business Administration (SBA) is offering low-interest federal disaster loans for working capital for small businesses and private non-profits in North Carolina and other states impacted by COVID-19, commonly known as the coronavirus. The SBA is encouraging all small businesses and private non-profits impacted by COVID-19 in affected states to apply now, with hopes of getting the money in the hands of those who need it in just a few weeks. Here are the highlights of the SBA Economic Injury Disaster Loan Program (SBA EIDLP).

Who is eligible? All small businesses and ... Read More 

Update: President Trump signed these Acts into law on March 18. They are expected to take effect no later than April 2.

Much has been made of the cost to employers of the leave required by the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act, which have now been passed by Congress and await the President’s signature. Under these new laws, if a non-governmental employer is required to pay wages to employees as a result of either Act, they are entitled to substantial tax relief.

Emergency Paid Sick Leave Act Relief

Under the Emergency Paid Sick Leave ... Read More