New Paycheck Protection Program Guidance Released

On Wednesday, January 6, the U.S. Small Business Administration (SBA) and the Treasury issued joint guidance regarding the latest updates to the Paycheck Protection Program (PPP), as amended by the recent COVID-19 relief bill. A recent article from the Journal of Accountancy offers an overview of the guidance, which includes the following items:

  1. An interim final rule titled, “Business Loan Program Temporary Changes; Paycheck Protection Program as Amended” – This document includes a consolidation of PPP rules for borrowers using the program for the first time. It also gives an explanation of program changes made by the recent COVID-19 relief legislation. Click here to read the document in full. 
  2. An interim final rule titled, “Business Loan Program Temporary Changes; Paycheck Protection Program Second Draw Loans” – This document covers the various regulations for businesses that received PPP loans through the initial program and now want to pursue a second-draw loan. Click here to read the document in full. 
  3. Additional guidance titled, “Guidance on Accessing Capital for Minority, Underserved, Veteran and Women-Owned Business Concerns” – This document gives details on the SBA’s commitment to opening the second PPP application window exclusively to minority- and women-owned businesses for the first two days. Click here to read the document in full.

The article offers a helpful overview of a number of PPP details that have changed with this second round of loan funding, including the following:

  • Second-draw PPP loans of up to $2 million are available for eligible businesses that received first-round funding. Eligibility requirements include having 300 or fewer employees; having used the entirety of the first-round funding on eligible expenses prior to receiving second-draw funding; having experienced a reduction in revenue of 25% or more, comparing an eligible time period in 2020 with one in 2019. 
  • Businesses that did not receive PPP funding in the first round may be eligible for second-round PPP funding if they meet the following criteria: having 500 or fewer employees and being eligible for other SBA 7(1) loans; being a sole proprietor, independent contractor, or eligible self-employed individual; being a non-profit; being an operation in the accommodation and food services sector with fewer than 500 employees at a single physical location; being a Section 501(c)(6) business league with 300 or fewer employees; certain qualifying news organizations.
  • The maximum allowable amount for both first- and second-draw PPP loans is 2.5 times the organization’s average monthly payroll, though some eligible businesses can receive up to 3.5 times their average monthly payroll. For first-draw PPP loans, the maximum tops out at $10 million. 
  • In addition to the original definition of “eligible costs” for the purpose of PPP loan usage, PPP loans from the second round of funding can be used to cover PPE and facility modification, property damage related to public disturbances not covered by insurance, expenditures for purchases essential to current operations, and certain covered operating expenditures.
  • The latest COVID-19 relief bill included specific provisions for PPP applicants that are minority, underserved, veteran, and women-owned businesses. This includes certain amounts of PPP loans set aside for these groups and other commitments by the SBA to ensure that businesses in these categories are served through the PPP program. 

The timeline for the second PPP application window is as follows:

  • January 11, 2021 – Applications for first-draw PPP loans can be submitted by community financial institutions.
  • January 13, 2021 – Applications for second-draw PPP loans can be submitted by community financial institutions.
  • To be announced – Applications for first- and second-draw PPP loans can be submitted by all participating lenders.
  • March 31, 2021 – The second PPP application window closes. 

For more details on the second application window for PPP loans, check out this article from the Journal of Accountancy

To apply for PPP funds in this second round of funding, first-time borrowers should use Form 2483 – Paycheck Protection Program Borrower Application Form and borrower seeking second-draw loans should use Form 2483-SD – PPP Second Draw Borrower Application Form. For more details on these forms and the procedures that accompany them, click here for a helpful article from the Journal of Accountancy

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Seim Johnson Announces Four Promotions

Seim Johnson is pleased to announce the promotions of Joseph Wagman, JD, Vanesa Salcido, CPA, Mark Furasek,  and Taylor Gehring. 

A member of the firm since 2016, Wagman specializes in healthcare regulatory compliance, including Medicare and Medicaid enrollment and reimbursement. Previously a senior, he now takes on the responsibilities of a supervising senior. Salcido has been with Seim Johnson since 2018. With this promotion, she moves from the role of associate III auditor to senior auditor. A member of the firm since 2017, Furasek previously served as an associate III in the firm’s tax department. He now takes on the responsibilities of a senior accountant. Gehring joined Seim Johnson in 2019 and serves in the audit department. With this promotion, she steps from associate II to associate III. 

“These promotions make for a very exciting time at Seim Johnson,” said Jerry O’Doherty, CPA, CGMA, managing partner of Seim Johnson. “These professionals span across departments and job positions, but they have this in common: their hard work and dedication have proven that they are ready to take the next step in their careers.”

A graduate of Creighton University, Wagman earned a Bachelor of Science in Business Administration in 2012 and a Juris Doctorate in 2016. He remains involved with the school via the Creighton University Alumni Association. Wagman lives in Omaha, Nebraska. 

Salcido is a graduate of the University of Nebraska at Kearney. She currently resides in Amarillo, Texas with her husband, Lalo, and daughter, Salome. 

In 2008, Furasek earned a Bachelor of Science in Business Administration from Nebraska Wesleyan University. He later returned to his studies, graduating cum laude with a Bachelor of Art in Accounting from Doane University in 2016. He lives in Bennington, Nebraska with his wife, Jackie, and their daughter, Lennon. 

Gehring attended the University of Nebraska – Lincoln, earning a Bachelor of Business Administration in 2018 and a Master of Professional Accountancy in 2019. Currently in pursuit of her CPA license, Gehring has passed all four sections of the exam and is working towards completing her hours requirement. She currently resides in Omaha, Nebraska.

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President Enacts Additional Stimulus Legislation

 On December 27, 2020, President Trump signed into law the Consolidated Appropriations Act, 2021 (CAA2021), which includes $892 billion in coronavirus stimulus spending. This long-awaited and highly contested piece of legislation ties coronavirus relief funding into a $1.4 trillion resolution for funding the federal government through September of next year. The nearly $900 billion in stimulus funds comprises a variety of measures, including a renewal of enhanced unemployment benefits, an extension of the Paycheck Protection Program, and another round of individual stimulus payments. Read on for a breakdown of the various COVID-19 stimulus measures included in CAA2021. 

INDIVIDUAL MEASURES

Unemployment Benefits

Portion of the stimulus package: $120 billion An extension of federal unemployment supplemental benefits through March 14, 2021 at a rate of $300 per week.  Additionally, it legislates an extension of two pandemic unemployment programs set to expire at the end of December, the Pandemic Unemployment Assistance program, which has been expanded to provide aid to self-employed, temporary, and gig workers, and the Pandemic Emergency Unemployment Compensation Program, which provides an additional 13 weeks of benefits beyond the typical 26 weeks that states provide to jobless workers. 

Extension of Eviction Moratorium & Rental Assistance

Portion of the stimulus package: $25 billion A temporary extension of the federal eviction moratorium through January 31, 2021 and $25 billion in emergency rental assistance. 

Economic Impact Payments

Portion of the stimulus package: $166 billion Direct payments of $600 for qualifying adults and their child dependents. Individuals earning up to $75,000 annually (or married couples making up to $150,000) qualify for the full payment; individuals earning between $75,000 and $99,000 qualify for a reduced payment; individuals earning more than $99,000 do not qualify. 

Food Aid

Portion of the stimulus package: $13 billion Additional funding for the Supplemental Nutrition Assistance Program and a benefits increase of 15% to last for six months. 

BUSINESS MEASURES

Paycheck Protection Program Extension (PPP2)

Portion of the stimulus package: $284 billion CAA2021 provides an additional round of funding for the PPP and expands eligibility to include nonprofits (Sec. 501(c)(6)), local newspapers, TV stations, and radio stations. Additionally, it ensures the tax deductibility of business expenses paid with loan funds that are forgiven, a measure that has been widely called for by loan recipients and the American Institute of Certified Public Accountants (AICPA). For further details on PPP2, click here to read a helpful summary from the Journal of Accountancy

Support for Entertainment Venues

Portion of the stimulus package: $15 billion Funds for struggling live venues, independent movie theaters, and cultural institutions. 

Support for Business in Low-income Communities

Portion of the stimulus package: $12 billion Funds earmarked for businesses in low-income and minority communities.

Economic Injury Disaster Loan Grants

Portion of the stimulus package: $20 billion Additional funds to be administered through the Economic Injury Disaster Loan (EIDL) program, dedicated to businesses in low-income communities. 

Support for Child Care Centers

Portion of the stimulus package: $10 billion Aid money to help child care centers safely reopen and to support families with child care costs. The money is to be administered via the Child Care Development Block Grant. 

Aid to Transportation Sector

Portion of the stimulus package: $45 billion A variety of transportation-related assistance that includes $16 billion for airlines (for paying the salaries of workers and contractors), $14 billion for mass transit agencies, $10 billion for highways, and $1 billion for Amtrak. 

ADDITIONAL MEASURES

Support for Education Institutions

Portion of the stimulus package: $82 billion This money is designated to help schools and universities reopen. The funds are earmarked as follows: $54 billion for public K-12 schools, $23 billion for colleges and universities, $4 billion for the Governors Emergency Education Relief Fund, $2.75 billion for private K-12 education, and nearly $1 billion for Native American schools. 

Funding for Vaccine Distribution and Coronavirus Testing

Portion of the stimulus package: $68 billion CAA2021 includes money for both supporting the distribution of coronavirus vaccinations and for helping to pay for costs associated with COVID-19 testing. $30 billion is directed for the procurement of vaccines and treatments, the funding of distribution for states, and the creation of a strategic stockpile. $22 billion is earmarked for testing, tracing, and mitigation. Of the remaining funds, $9 billion will go to healthcare providers and $4.5 is earmarked for mental health. 

Increased Broadband Access

Portion of the stimulus package: $7 billion Funding for broadband initiatives to support better connectivity and infrastructure. $3.2 billion is earmarked for the Emergency Broadband Benefit, which provides low-income families and individuals laid off or furloughed due to the pandemic with a monthly stipend of $50 to pay for internet services. $1.9 billion is dedicated to financing “rip and replace” projects—the removal and replacement of Huawei and ZTE networking equipment. $1 billion will go to Tribal broadband programs and $300 billion is dedicated to rural broadband deployment. 

Farm Aid

Portion of the stimulus package: $13 billion Funding for farmers and ranchers.

Postal Service

Portion of the stimulus package: $10 billion CAA2021 includes the forgiveness of a $10 billion loan made to the United States Postal Service earlier this year. 

WHAT’S NOT INCLUDED

A number of provisions that were initially included in proposed coronavirus stimulus legislation were, ultimately, left out of the bill. These include protection for businesses against liability regarding COVID-19 exposure, financial aid to state and local governments, and an extension of federal student loan forbearance. 

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Important Tax Due Dates – December 2020

December 2020 Individual Due Dates

December 1 - Time for Year-End Tax Planning

December is the month to take final actions that can affect your tax result for 2020. Taxpayers with substantial increases or decreases in income, changes in marital status or dependent status, and those who sold property during 2020 should call for a tax planning consultation appointment.

December 10 - Report Tips to Employer

If you are an employee who works for tips and received more than $20 in tips during November, you are required to report them to your employer on IRS Form 4070 no later than December 10. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.

December 31 - Last Day to Make Mandatory IRA Withdrawals

Last day to withdraw funds from a Traditional IRA Account and avoid a penalty if you turned age 70½ before 2020. If the institution holding your IRA will not be open on December 31, you will need to arrange for withdrawal before that date.

December 31 - Last Day to Pay Deductible Expenses for 2020

Last day to pay deductible expenses for the 2020 return (doesn’t apply to IRA, SEP or Keogh contributions, all of which can be made after December 31, 2020). 

December 31 -  Caution! Last Day of the Year

If the actions you wish to take cannot be completed on the 31st or a single day, you should consider taking action earlier than December 31st.

December 2020 Business Due Dates

December 1 - Employers

During December, ask employees whose withholding allowances will be different in 2021 to fill out a new Form W4 or Form W4(SP).

December 15 - Social Security, Medicare and Withheld Income Tax

If the monthly deposit rule applies, deposit the tax for payments in November.

December 15 - Nonpayroll Withholding

If the monthly deposit rule applies, deposit the tax for payments in November.

December 15 - Corporations

The fourth installment of estimated tax for 2020 calendar year corporations is due.

December 31 - Last Day to Set Up a Keogh Account for 2020

If you are self-employed, December 31 is the last day to set up a Keogh Retirement Account if you plan to make a 2020 Contribution. If the institution where you plan to set up the account will not be open for business on the 31st, you will need to establish the plan before the 31st. Note: there are other options such as SEP plans that can be set up after the close of the year. Please call the office to discuss your options.

December 31 - Caution! Last Day of the Year

If the actions you wish to take cannot be completed on the 31st or a single day, you should consider taking action earlier than December 31st.

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In the Firm - December 2020

What's new at Seim Johnson?

With tax season finally behind us, we move into the holiday and end of the year season. 2020 will certainly be a year to remember. Check out what our team has been up to since our last newsletter.
 
Additions to the Family
Two of our team members recently welcomed new additions to the family!
 
Larissa Brown, tax manager, and her husband Zach welcomed baby Harper.
 
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Katie Prest, consulting associate, and her husband Lachlan welcomed baby Robert.
 
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Congratulations Jessica Watts
Jessica Watts has been nominated to Director for the Nebraska Society of CPA’s. Read more here.
 
Community Efforts
Thank you to all our employees who participated in this year's United Way campaign. The firm raised nearly $11,000 through employee donations for the 2020-21 year. We're proud that our contributions will assist the United Way of the Midlands help our local community and make Omaha and Nebraska an even better place to work and live.
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