New changes are coming for PPP loan forgiveness. Click here to read about the recently passed bill as of 6/3/20.
SUMMARY OF PAYCHECK PROTECTION PROGRAM FLEXIBILITY ACT OF 2020 (H.R. 7010)
(Passed by the House on 5/28/20 and Senate on 6/3/20)
Key Provisions: Effective As If Included In the CARES Act Except for Minimum Maturity of 5 Years –
- Extend 8-Week Period to 24-Weeks or until 12/31/20, whichever is earlier.
- Increase 25% limitation on Non-Payroll expenses qualifying for PPP Loan Forgiveness to 40%.
- Expand Safe-Harbors – Have until December 31 rather than June 30 to rehire employees and/or increase salary or wages to avoid reduction of costs because of a reduction in employee’s pay or reduction in FTEs.
- Require minimum loan maturity of 5-years, effective for loans made on or after date of enactment. However, lenders and borrowers can agree to extend maturity for earlier loans to 5 years (only provision not retroactive.)
- Allow employers to defer 6.2% OASDI taxes even if receive PPP Loan Forgiveness.
- Allow PPP Loans to be made through December 31, 2020 rather than June 30, 2020.
- Payments of interest and principal delayed generally until payment of Forgiveness amount to lender by SBA, or if borrower fails to file Form 3508 within 10 months from the end of the 24-week period, payments must begin within 10 months from the end of the 24-week period.
- Forgiveness determined without regard to proportional reduction in FTEs where borrower documents – 1) Unable to rehire individuals who were employees on 2/15/20 or similarly qualified employees on or before 12/31/20; or 2) Unable to return to same level of business activity as before 2/15/20 because of requirements of HHS, CDC, OSHA, from 3/1/20 thru 12/31/20 because of sanitation standards, social distancing, or other COVID-19 related worker or customer safety requirement.
The IRS and Colorado Department of Revenue have extended the payment deadline for all 2019 tax payments including 1st and 2nd quarter estimated tax payments to July 15, 2020. Previously, only the 1st quarter 2020 estimated payment was extended to July 15th and the 2nd quarter payment was still expected to be paid by June 15th. This has now also been extended to July 15th along with the other payments. To clarify, your 2019 tax payments that would normally have been due on April 15th have now been extended to July 15th along with the 1st and 2nd quarter 2020 estimated tax payments. Click here to access the Colorado Department of Revenue website for other FAQs.
Still have questions about the PPP and EIDL loans being offered? Click here for answers to Frequently Asked Questions about these loans
The IRS has extended the tax filing and payment deadline to July 15th, 2020
Click here for answers from the IRS to Frequently Asked Questions regarding the new filing and payment dealine.
The Journal of Accountancy provided its own synopsis of the highlights from the IRS FAQ. Click here to read their article.
Click here for more information from the SBA website about Emergency Loans through the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
These loans are designed to help employers pay their employees while their business income is reduced due to the Covid-19 outbreak.
2019 SECURE Act
(Setting Every Community Up for Retirement Enhancement Act of 2019)
On December 20, 2019, Congress passed the SECURE Act which made changes to how you save money for your retirement, how you use your money in retirement, and how you can better use your Section 529 plans. Whether you are 35 or 75 years of age, these changes affect you.
Click here to read our letter summarizing the changes.
New W-4 form in 2020
Beginning January 1st, all employers must use the new 2020 W-4 form. Click here for the new form.
2019 Tax Resource Guide
Another tax season is fast approaching and many of you may be wondering about new tax rates, mileage rates, standard deduction amounts or other items. Click here for a handy 2019 Tax Resource Guide that will answer these questions and more.
Colorado Sales Tax Changes
- Effective December 1, 2018, the Colorado Department of Revenue is requiring that sales tax be collected and reported based on the point of delivery for taxable goods. To help with some of the questions on this new policy, the State created a video detailing the new rule. Click here to watch this 16 minute video.
- Click here to view and download the the 10 page PDF list of State collected sales tax locations. This list is also helpful to get information on the home rule cities that collect their own sales tax.
- If you are not sure what sales tax to charge a customer and need to look up sales tax by a specific location, click here for a State approved sales tax search engine. Just type in the address and it will list the sales tax you need to collect.
End of year planning for 1099s
- Remember that a 1099-Misc will need to be issued to any individual where you paid them $600 or more for services throughout the 2019 tax year. Click here to download a W-9 form to request their tax ID and address.