On August 10, 2021, the IRS and the Department of the Treasury provided new guidelines regarding the Employee Retention Credit (ERC) via a safe harbor, allowing employers to exclude specific items from their gross receipts only when determining if the qualifications for the ERC are met.
Last week the Small Business Administration (SBA) announced the launch of its Paycheck Protection Program (PPP) loan forgiveness portal, which opens August 4, 2021, to streamline applications for PPP loans of $150K or less. Concurrently, the new COVID Delta variant is now a cause for concern as cases in New Jersey have quadrupled since last month. The combination of these events has many business owners concerned since it appears that the PPP will not be replenished with additional funding. They’re left wondering, what will happen if restrictive government orders are reimposed and how will businesses be able to survive yet another COVID wave?
Since the closure of the Paycheck Protection Program (PPP), Restaurant Revitalization Fund, and other Small Business Administration (SBA) COVID-19 relief programs, New Jersey and Pennsylvania-area businesses have been searching for funding alternatives. Over the past few months, the Employee Retention Credit (ERC), a payroll-based tax credit, has moved to the forefront. The ERC provides an immediate savings opportunity to businesses that experienced a decline in gross receipts in either 2020, 2021, or both.
Whether you are an insurance agency shareholder, partner, employee, or independent agent, you need to be aware of the tax treatment of reimbursed and unreimbursed business expenses. Like most businesses, agencies typically reimburse employees for ordinary and necessary business expenses. Depending on the circumstances, expense reimbursements may be treated as taxable income subject to federal income and employment taxes.
Among the many provisions of the American Rescue Plan Act (ARPA), enacted in March 2021, was one regarding the Consolidated Omnibus Budget Reconciliation Act of 1985, more commonly known as COBRA. COBRA is a program that provides certain employees (and their spouses and dependents) the right to temporarily continue group health coverage at the group rate if they have lost it. It generally applies to private-sector employers of 20 or more employees, employee organizations, and government workers at the federal, state, and local levels.
The issue of proper worker classification continues to be an area of concern for both federal and state governments, primarily because when someone is misclassified as an independent contractor rather than an employee, the tax liabilities shift from the business to the individual. In addition, independent contractors are typically not entitled to the same benefits as employees, resulting in an overall lower cost. Thus, despite existing regulations, worker misclassification is a continuing concer
Several businesses (including some in New Jersey and Pennsylvania), individuals, families, and others dealing with estates and trusts have reported significant delays when dealing with the IRS. Not only does this include issues with receiving timely refunds, but also with communications and other services. This has many asking the question, “How are things going at the IRS?” According to recent research findings, not well.
During the COVID-19 pandemic, many New Jersey and Pennsylvania businesses faced significant operational, financial, and working capital challenges. Due to government regulations, the almost overnight changes often left companies with no way to generate income or pay expenses. These challenging circumstances forced some to close while others sought to take advantage of new federal relief opportunities available through the Small Business Administration (SBA).
The tight grasp of the COVID-19 pandemic continues to loosen as all indications are that business is beginning to return to normal. The continued distribution of the vaccine and the rollback of state and local restrictions have meant the demand for services and hiring has picked up the pace. It was recently reported that New Jersey businesses had regained 54% of the jobs lost during the pandemic.
When you reach a certain age, you are required to take distributions from your retirement account. These “required minimum distributions” (RMDs) vary based on age, life expectancy, working status, and account balance, and those who fail to take all that they’re required will pay a hefty penalty. Unfortunately, there’s no way to skirt the RMD rules, but there is something you can do with RMD funds that you don’t need: donate them to charity.
