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Resources

Accounting for Business

Welcome to our Resources section, where you will find articles pertaining to accounting for business, business financial planning, financial advice, and the industries of our clients. This section is a great source of information, but please contact us if you feel you need professional financial advice. Maxwell Locke & Ritter is here to offer trusted guidance.

 

On May 15th, the Small Business Association released the Paycheck Protection Program’s (PPP) Loan Forgiveness Application, providing much needed guidance for borrowers, as forgiveness is top of mind for many PPP recipients.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act includes several changes that encourage charitable giving during the coronavirus (COVID-19) crisis. This is welcome news for certain public charities, including churches, educational organizations, hospitals, medical research organizations and food banks. Here’s an overview of the tax rules for deducting charitable contributions — and how they’ve temporarily changed for 2020.

On May 13, 2020, the SBA released additional FAQs regarding how it will review borrowers’ good faith certifications for PPP loan requests.

Many companies have questions about how to handle employee benefits, especially health care coverage while employees are on furlough due to the novel coronavirus (COVID-19) pandemic. Here’s an example of a common question some employers are asking.

Due to the novel coronavirus (COVID-19) pandemic, employers are now faced with many challenges with their workforces, including responding to changes in employee benefits programs. In response, they have many questions. Here’s one question from an employer:

The coronavirus (COVID-19) pandemic has shut down many sectors of the U.S. economy, causing widespread job losses. Over 10 million Americans applied for unemployment benefits in March, according to the U.S. Department of Labor. And far more claims are expected in April. Some economists predict that the unemployment rate could rise to Depression-era levels of 10% to 15% before the crisis ends (compared to 3.5% in February 2020).

To help curb layoffs, Congress has created a new federal income tax credit for employers that keep workers on their payrolls. The credit amount equals 50% of eligible employee wages paid by an eligible employer in a 2020 calendar quarter. It’s subject to an overall wage cap of $10,000 per eligible employee. Here are the details.

The SBA has provided additional guidance regarding eligibility for the Payroll Protection Program, including a deadline for repayment of funds for ineligible borrowers and SBA reviews of certain loans.

Companies that issue financial statements under U.S. Generally Accepted Accounting Principles (GAAP) are required to follow Accounting Standards Codification (ASC) Topic 740, Income Taxes. This complicated guidance requires companies to report the effects of new tax laws in the period they’re enacted. As a result, companies — especially those that issue quarterly financial statements or that have fiscal year ends in the coming months — are scrambling to interpret the business tax relief measures under the new law.

On April 30th, the Federal Reserve issued revised guidance and terms for the Main Street Lending Program, which includes the previously announced Main Street New Loan Facility (“New Loan Program”) and the Main Street Expanded Loan Facility (“Expanded Loan Program”). In total, the Main Street Lending Program is anticipated to make approximately $600 billion in loans to eligible businesses.

The IRS released Notice 2020-32 to provide guidance that a taxpayer receiving a loan through the Paycheck Protection Program (PPP) under the CARES Act is not permitted to deduct expenses for Federal income tax purposes that are otherwise deductible under the Internal Revenue Code (IRC) to the extent that the payment of those expenses results in the forgiveness of the PPP loan and the income associated with the forgiveness is excluded from gross income for Federal income tax purposes.

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