Oct 26, 2020
On Friday, October 23, Ohio Governor Mike DeWine approved several new programs aimed to provide much-needed relief to small businesses, restaurants/bars, and low-income families negatively impacted by COVID-19. These programs include:
Small Business Relief Grant – This program will designate up to $125 million of funding received by the State of Ohio from the federal CARES Act to provide $10,000 grants to small businesses with no more than 25 employees to help them through the current crisis. The program will be administered by the Ohio Development Services Agency. If you are a small business with no more than 25 employees, you can apply for one of the first-come, first-serve grants starting on November 2, 2020. Businesses can use the grants to pay for various expenses including mortgages, rent, utilities, salaries, health care premiums, business supplies, and other related operational costs. Click here to review the terms & conditions of the program. Ineligible businesses include, but are not limited to nonprofits, private schools, clubs, etc.
The Bar and Restaurant Assistance Fund – This program is designed to assist Ohio’s on-premise liquor permit holders. Governor Mike DeWine has designated $37.5 million of funding received by the State of Ohio from the federal CARES Act to provide $2,500 assistance payments to on-premise liquor permit holders to help them through the financial difficulties experienced during the COVID-19 pandemic. These permit holders have not been able to fully use their liquor permit and it’s had an impact on their business. The program, which will begin accepting applications on November 2, 2020, will be administered by the Ohio Development Services Agency. Click here for more information on how to apply.
Home Relief Grant – Also accepting applications starting November 2, 2020, is the Home Relief Grant Program which will help eligible Ohioans who are behind on rent, mortgage, and water and/or sewer utility bills catch up on past payments back to April 1, 2020, and provide additional assistance through December 30, 2020. Ohioans can apply for assistance through their local Community Action Agency. Click here for more information on how to apply.
As always, we are here to provide assistance. If you have immediate questions or concerns, please reach out to your William Vaughan Company advisor today or call us at 419.891.1040
Oct 15, 2020
As the 2020 presidential election inches closer, how do President Trump’s and Vice President Biden’s tax proposals compare?
Check out our resources below. In addition, William Vaughan Company’s Tax Practice Leader, Sandi Towns has outlined some estate tax planning considerations in our latest WVC Short, here.
Oct 12, 2020
The last week-and-a-half saw a flurry of new Paycheck Protection Program (PPP) guidance. Here is an update on what changes were made:
A Streamlined process for loans of $50,000 or less
While this change does not go as far as was originally proposed – providing automatic forgiveness for loans up to $150,000 – it will still help a significant number of Borrowers. A new forgiveness application, Form 3508S, has been released for loans of $50,000 or less.
While forgiveness is still not automatic for these Borrowers, the confusing and administratively burdensome portions have been removed. These Borrowers do not need to compute or reduce their forgiveness amount by 1.) reductions in compensation or 2.) full-time equivalent employees. The result? Borrowers of loans of $50,000 or less will not be penalized for any reductions in wages or employees.
For those who are keeping track, there are now three different application forms for forgiveness:
- Form 3508 – Standard form for those who do not meet criteria for one of the other forms (form instructions here)
- Form 3508EZ – Can be used for loans of any size where there is no reduction in wages or full-time equivalent employees (with certain exceptions) (Form instructions here)
- Form 3508S – For all loans $50,000 and under regardless of any reductions in wages or full-time equivalent employees (form instructions here)
PPP and sales of businesses
Guidance related to the requirements of Borrowers who are selling their business or business assets was also released. For most cases of sales of businesses or business assets, the Borrower will need to complete the following before the closing of the sale:
- Notify their PPP lender of the planned transaction and provide copies of the proposed agreements
- Submit their forgiveness application along with all required supporting documentation
- Deposit funds in the amount of outstanding PPP loan balance into an escrow account with their PPP lender
Also, in certain cases, the SBA must approve the proposed transaction before it is executed.
10-month deferral period
When the PPP was created, payments on the loan were deferred for six months. This deferral period was later extended to 10 months from the end of the Borrower’s covered period. The latest guidance clarifies that loan documents executed prior to the extension to the 10-month deferral are automatically modified to the 10-month deferral and do not need to be re-written and re-signed.
What changes might still be coming to the PPP?
We could still see a change with respect to the tax-deductibility of expenses related to forgiveness. Currently, such expenses are not tax-deductible, and therefore create a taxable event.
There continues to be support for a second PPP. Most recently, Federal Reserve Chairman Jerome Powell commented on the need for additional support for small businesses. A second round of stimulus would likely be much more targeted.
If you have questions about how these new changes may impact your business, please reach out to your WVC Advisor or our WVC PPP Loan Task Force leader, Kate Matz at firstname.lastname@example.org or 419.891.1040.
Oct 01, 2020
As the pace of changes to the Paycheck Protection Program (PPP) has relaxed, many are wondering about the current status and potential changes yet to come. We wanted to share with you some of the discussions occurring at the federal level about possible next steps. While there appears to be strong bipartisan support for these additional actions in concept, the specific details will likely change throughout the process.
What is the status of PPP and forgiveness?
- $525 billion was lent to 5.2 million businesses.
- Most lenders are now accepting forgiveness applications.
- As of 9/24, the SBA had received 96k forgiveness applications but had not completed the processing of any of them.
What is the latest guidance related to PPP forgiveness?
On 8/24, additional guidance was released regarding the following:
- C or S Corporation owners with less than 5% ownership are not subject to the compensation caps
- Expenses attributable to a tenant are not eligible for forgiveness.
- Rent payments to a related party are capped at the amount of mortgage interest owed on the property.
- Related party mortgage interest is not eligible for forgiveness.
What changes might still be coming to the PPP?
- There continues to be bipartisan support in Congress for blanket forgiveness of “small” loans – typically discussed as $150,000. The exact terms and dollar amount still need to be negotiated.
- There continues to be some bipartisan support for tax-deductibility of expenses related to forgiveness.
- Congress has been slow to act, and it is likely we will not see movement on these items until after the election.
Will there be a second PPP?
Maybe. Again, this is a topic that Congress continues to discuss. Eligible businesses would likely be much more targeted in this round. We are likely to see a lower cap on the size of business (as measured by the number of employees) and it is likely that businesses will need to demonstrate they have been significantly negatively impacted.
What should I be doing now?
- Continue to monitor our WVC COVID-19 Resource Center.
- Calculate your loan forgiveness amount using a tool such as our forgiveness calculator.
- Understand your lender’s process and timeline for forgiveness applications.
- In most cases, it makes sense to sit tight and wait for the final changes to work their way through Congress. Your forgiveness application is due 10 months after the end of your Covered Period, so you have time.
- Reach out to your WVC Advisor or our WVC PPP Loan Task Force leader, Kate Matz to discuss the above and plan for your specific situation.
Connect with the author:
Kate Matz, CPA, CEPA, CVGA, CGMA
Value Growth Practice Leader, William Vaughan Company
email@example.com | 419.891.1040
Sep 14, 2020
As the coronavirus (COVID-19) pandemic continues to impact businesses globally, cybercriminals are taking advantage of this crisis, through phishing tactics, for their financial gain. Phishing is the fraudulent attempt of a cybercriminal to act as a trusted source to gain sensitive information, typically resulting in financial gain for the criminal. Since January 1, 2020, the Federal Trade Commission has received more than 90,000 reports related to COVID-19 fraud with a total loss of $114 million since the beginning of the year.
Business owners already have the day-to-day operations of managing employment needs, fulfilling client orders, and running back-office tasks to manage; the list goes on and on. Having to worry about a phishing attack shouldn’t be one of those added tasks. However, a surge in COVID-related fake emails with dangerous attachments, links, and requests for personal information is our reality.
As teams work remotely, businesses have increased their use of web-based meetings. An example of a COVID-19 phishing scam involves the use of Zoom websites. Scammers are sending fictitious Zoom web address links, that when launched, download viruses that compromise the company’s data. These scams result in expensive fixes to restore company networks.
The Federal Bureau of Investigation (FBI) recently issued an alert warning which urged individuals to be on the lookout for the following red flags:
- Unexplained urgency
- Last-minute changes in wire instructions or recipient account information
- Last-minute changes in established communication platforms or email account addresses
- Communications only in email and refusal to communicate via telephone or online voice or video platforms
- Requests for advanced payment of services when not previously required
- Requests from employees to change direct deposit information
Here are some basic rules and best practices to protect you and your employees from falling victim to these scams:
Exercise caution – Don’t open emails from unfamiliar email addresses or contacts. Or if you receive an email that appears to be from a trusted source, but appears ‘odd’ call and verify with the sender the authenticity of the email.
Avoid clicking on links and opening attachments – Verify a link by hovering your mouse button over the link to see where it leads. Sometimes, it’s obvious the web address is not legitimate. But keep in mind phishers can create links that closely resemble legitimate addresses. Delete the email and notify your IT department.
Get information about government actions regarding COVID-19 from reputable sources – For the most current information, visit the CDC and WHO websites.
Do not reveal personal or financial information – Emails seeking personal information like your Social Security number or login information is a phishing scam. Never respond to solicitations for this information. If you receive an email saying your shipment has been assigned a new ‘tracking id’ and you are asked to click the link to verify the update. Do not click the link. Instead, go to the website of the delivery service and enter the tracking id to verify if a change was made.
Do not use open or unsecure Wi-Fi for working remotely – Never use public wi-fi. When working remotely it is best practice to have a mobile wi-fi device that you can securely connect to.
Connect with your IT department – If you receive a suspicious email, forward the entire email as an attachment to your IT team. If you click on a link or open an attachment in a suspected phishing email, report any incident immediately.
If you are concerned about your company’s security controls or your phishing risk, connect with our team. We can assess your systems and provide value-added recommendations to protect your organization.
Tiffany Pollard, CISA
Risk Services Practice Leader, William Vaughan Company
Tiffany.firstname.lastname@example.org | 419.891.1040