SBA Announces Opening of Paycheck Protection Program Direct Forgiveness Portal
Aug 23, 2021
The SBA has published new guidance on PPP loan forgiveness on loans of $150,000 or less. A new portal has been established in which borrowers can request forgiveness directly w the agency instead of going through their lenders. The portal, launched in early August, is the latest attempt by the SBA to make the PPP loan forgiveness process easy and streamlined.
“The SBA’s new streamlined application portal will simplify forgiveness for millions of our smallest businesses — including many sole proprietors — who used funds from our Paycheck Protection Program loans to survive the pandemic,” said Administrator Isabel Casillas Guzman. “The vast majority of businesses waiting for forgiveness have loans under $150,000. These entrepreneurs are busy running their businesses and are challenged by an overly complicated forgiveness process.
The SBA has also created a PPP customer service team that will answer questions and directly assist businesses with their loan forgiveness applications. This team can be reached at 877-552-2692, Monday through Friday from 8 a.m. to 8 p.m. EST.
Click here to access the Paycheck Protection Program Direct Forgiveness Portal.
Categories: COVID-19
Everything You Need to Consider About the Advance Child Tax Credit Payments
Jul 16, 2021
As we are heading into the second half of 2021, individuals are now starting to receive their advance Child Tax Credits payments as a result of President Biden’s American Rescue Plan. The law, signed in March, increases the overall child tax credit, expands it to include children turning 17 this year, and adds another annual $600 benefit per child under six years old. While the advance payment on the credit may be a welcomed windfall, there are some important aspects of this tax credit individuals should be aware of when receiving these payments.
Receiving Payments
Individuals with dependent children started receiving monthly payments on July 15th which are estimated to total half of the amount of their estimated 2021 Child Tax Credit. The other half of the Child Tax Credit will be received when the 2021 Tax Return is filed in 2022. Individuals are required to reconcile the payments received on their 2021 Tax Return so they should keep track of the payments received throughout the year and include that information with their tax documents.
Overpayment
If an individual receives more than what is due to them, they will be required to pay back the difference. This differs from the stimulus payments, where individuals were allowed to keep the additional funds. This primarily applies to those with a dramatic increase in income during 2021. An example of this scenario:
- If your income level qualified you to receive additional Child Tax Credits in 2020, and your new income level in 2021 does not, you will have to pay back the money received in regards to the additional Child Tax Credit you no longer qualify for.
Increase in Tax Due
The advance child tax credit received will be in lieu of claiming the tax credit on the 2021 income tax return. Since half of this credit will be received by the time the 2021 income tax return will be due, the amount of the child tax credit will be halved on the 2021 Return. This means that there will be fewer credits to offset against the tax due, which may cause a higher-than-normal tax due, or decrease the potential refund some are used to receiving. This holds especially true for those with a dramatic increase in income for 2021.
Opting Out of Advanced Payments
If taxpayers do not wish to receive the advanced payments of the Child Tax Credit, they can elect out of them. Typical reasons for opting out of the advanced payment are as follows:
- An individual normally has a balance due to the IRS after filing their taxes
- An individual doesn’t claim a dependent every year due to shared custody arrangements
- An individual’s dependent(s) is(are) aging out of the range of the credit
- An individual prefers having a large tax refund
Anyone wishing to elect out of the advanced payments, you may do so by clicking this link and following the instructions provided.
Changing Bank Account Information
If taxpayers would like to learn how to change/update their banking or direct deposit information, click here.
New IRS Portal
The IRS is currently developing a portal in which a user can enter updated information impacting the amount of payment an individual will receive. A user can do all of the following in this portal:
- Update marital status
- Enter in children born in 2021
- Re-enrollment into the Child Tax Credit if you were previously unenrolled
- Adjust your income for the calculation of the Child Tax Credit
As previously stated, this portal is still in development but the IRS is looking to release this portal in the coming months. Reach out to your WVC professional for questions on your specific situation.
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Categories: Tax Planning
Ohio’s Municipal Payroll Withholding Dilemma – Take 2
Jul 09, 2021
On June 30, Governor Mike DeWine signed into law Ohio’s 2022-23 budget. One of the key items in the law was the clarification of a municipal income tax withholding dilemma that has been ongoing since virtually the beginning of the COVID-19 pandemic. While this clarification means good news for many employees, it may also be a massive headache for employers.
The Good News
Earlier this year, we penned a blog outlining how a temporary “Pandemic” law change intended to ease municipal income tax withholding burdens on employers was, in fact, having unintended negative consequences on remote workers. Many were left paying taxes to municipalities they did not live in and did not physically work in either, due to stay-at-home orders.
The 2022-23 budget bill extends the temporary law noted above through December 31, 2021, and clarifies that it applies only to employer withholding requirements and not to the actual liability an employee has to a given city. This means, for 2021 only, employees can request a tax refund for any days they neither lived nor physically performed work in a municipality. It is important to note an employee may still owe tax to the municipality in which they live.
The Bad News
Yes, the temporary law is extended to the end of 2021, but that means, beginning in 2022 “pre-pandemic” law will be back in place.
While the ever-expanding world of technology was leading us down a road where remote work would become the norm, the COVID-19 pandemic put us in a Lamborghini and sped us there in a matter of a year. Employers have realized their workforce can get work done remotely, and employees are becoming accustomed to more time with their families and much less time commuting while continuing to be productive in their work. Remote work is here to stay, and absent any future, permanent law changes, the reversion in 2022 back to pre-pandemic rules has the potential to be a huge problem for two reasons.
- First, pre-pandemic law included a 20-day municipal withholding rule, only requiring employers to withhold if an employee physically worked in a municipality for more than 20 days. Unfortunately, this rule will not align very well with a remote work environment. Even if a business is modestly flexible, allowing employees to work remotely just two days a month, this would trip the 20-day rule, requiring withholding from wages for every municipality within which their employees reside.
- Second, although many employers offer courtesy withholding so may already be withholding taxes for those cities, tripping this 20-day rule will now require those wages to be allocated to that municipality for purposes of the net profits (income) tax, subjecting the company to Income tax in each of those municipalities.
To ease into the 2022 transition, employers could consider formalizing hybrid work arrangements and creating an internal system to easily track days worked remotely.
We will be keeping our eyes peeled for any future legislation that may alter municipal tax rules for 2022 and beyond. If you have any questions in the meantime, please contact your William Vaughan Company advisor.
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wvco.com | 419.891.1040
Categories: COVID-19, Tax Planning
Ohio Small Business Grants Available Starting June 29
Jun 28, 2021
The Ohio Development Services Agency released eligibility information for a series of small business grants available starting Tuesday, June 29. Below you will find information regarding each of these grants including eligibility, qualifications, and fund usage.
Food & Beverage Establishment Grant
This program provides grants up to $30,000 to restaurants, bars, coffee shops, and other food and drinking businesses affected by the COVID-19 pandemic. The dollar amount of each grant will be determined by the business’s loss of revenue in 2020.
- Eligible businesses for this grant include food service contractors, caterers, mobile food services, bars, taverns, nightclubs, full-service restaurants, limited-service restaurants, cafeterias, coffee shops, and businesses that do not otherwise qualify for the Entertainment Venue Grant because they earn more than 50 percent of their revenue from the sale of food and/or beverages.
- Eligible businesses must have experienced at least a 10 percent reduction in revenue in 2020 at one or more Ohio locations.
- Grant funds can be used to reimburse eligible businesses for the following expenses relating to their Ohio business location as long as the costs do not violate state or federal law and are not otherwise specified as ineligible costs:
- Personal protective equipment to protect employees, customers, or clients from COVID-19.
- Measures taken to protect employees, customers, or clients from COVID-19.
- Utility payments.
- Mortgage or rent payments for business premises (personal residences explicitly excluded).
- Salaries, wages, or compensation paid to contractors or employees, including an employer’s share of health insurance costs.
- Business supplies or equipment
Grants will be awarded on a first-come, first-served basis under the guidelines outlined, here.
Lodging Grant
This program provides grants up to $30,000 to hotels, motels, and bed and breakfast operations affected by the COVID-19 pandemic. The dollar amount of individual grants to qualifying businesses will be determined by the business’s decline in occupancy rate in 2020.
- The business must have at least one Ohio location that has been in operation since at least Dec. 1, 2019, and must have a hotel/motel license from the Ohio Department of Commerce.
- Businesses can be a hotel, motel, or bed and breakfast.
- The business must have experienced at least a 10%reduction in occupancy in 2020 as a result of COVID-19.
- Grant funds can be used to reimburse eligible businesses for the following expenses not otherwise specified as ineligible costs:
- Personal protective equipment to protect employees, customers, or clients from COVID-19.
- Measures taken to protect employees, customers, or clients from COVID-19.
- Utility payments
- Business supplies or equipment.
- Mortgage or rent payments for business premises (personal residences explicitly excluded).
- Salaries, wages, or compensation paid to contractors or employees, including an employer’s share of health insurance costs
Grants will be awarded on a first-come, first-served basis under the guidelines outlined here.
New Small Business Grant
Grants of up to $10,000 to small businesses established between Jan. 1, 2020, and Dec. 31, 2020, under this program.
- The business must be a for-profit entity that started operations between Jan. 1, 2020, and Dec. 31, 2020, and that has at least two and no more than 25 Ohio employees paid via W2 wages as of Jan. 1, 2021.
- The business must have a physical location in Ohio and experienced revenue loss or unplanned costs because of the COVID-19 pandemic.
- A lengthy list of ineligible businesses includes those that previously received the Small Business Relief Grant; are a nonprofit entity; are publicly traded; are operated by a governmental agency or entity; are a club; are primarily engaged in political or lobbying activities or political issue advocacy; operate as a sexually oriented business; engage in conduct regulated by the Ohio Casino Control Commission or the Ohio State Racing Commission. A complete list can be found here.
- Grant funds can be used to reimburse eligible businesses for the following expenses:
- Personal protective equipment to protect employees, customers, or clients from COVID-19.
- Measures taken to protect employees, customers, or clients from COVID-19.
- Mortgage or rent payments for business premises (personal residences explicitly excluded).
- Utility payments.
- Salaries, wages, or compensation paid to contractors or employees, including an employer’s share of health insurance costs.
- Business supplies or equipment.
Additional grants, including the Entertainment Venue Grant which provides up to $30,000 to theaters, music venues, spectator sports venues, museums, and other entertainment establishments affected by the COVID-19 pandemic, are available through the Ohio Development Service Agency website.
What should I do next?
Beginning Tuesday, June 29, 2021, businesses can apply at BusinessHelp.Ohio.Gov. To access the application, individuals will be required to log in using an existing OH|ID or create a new OH|ID, which provides users with secure access to state of Ohio services and programs. For more information on creating an OH|ID, visit OHID.Ohio.Gov/. For help in creating an OH|ID account, click here.
After an application is approved, businesses also will be required to provide an Ohio Supplier ID assigned by the Ohio Office of Budget and Management. If the applicant business does not currently have an Ohio Supplier ID, the business will be required to register at Supplier.Ohio.Gov. A Supplier ID is required so that grant funds can be distributed by direct deposit.
If you require assistance or have general questions about your application, our team is ready to help. Contact our restaurant practice leader, Kristin Metzger below.
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Kristin Metzger, CPA
Restaurant Practice Leader
kristin.metzger@wvco.com | 419.891.1040
Categories: COVID-19, Other Resources, Restaurant & Hospitality
Industry 4.0 In A Pandemic World
Apr 08, 2021
In our last manufacturing-focused blog, we explored the topic of the fourth industrial revolution known as Industry 4.0. This highly developed revolution focuses on the use of technology, automation, and digitization for operational efficiency. Many are now curious to know how this new phase of manufacturing was impacted by the disruption of the pandemic. With a vast shift from in-person work to a more remote setup, Industry 4.0 experienced a surge in the scaling of related technologies.
According to a survey by McKinsey, of their 400 respondents, 94% of respondents told noted that Industry 4.0 had helped them to keep their operations running during the crisis, and 56% percent said these technologies had been critical to their crisis responses. For those organizations who had already taken the leap to incorporate Industry 4.0 into their daily operations, the pandemic was a win situation. These early adopters were simply able to rely on their automation to overcome the loss of physical presence in their factories and at the same time utilize their real-time data analytics to assess their operations and make prompt adjustments.
For others, the pandemic was a wake-up call. Manufacturers who have yet to make the transition to Industry 4.0 were met with the stark reality of being unable to pivot during the disruption which left them negatively impacted. According to the McKinsey survey, 56% of respondents that hadn’t implemented Industry 4.0 technologies prior to COVID-19 found themselves constrained in their ability to respond to COVID-19 in the absence of digital technologies to support them.
While the pandemic made organizations realize the importance of Industry 4.0. It has also hindered progress. For some, the pandemic wreaked havoc on cash flow and talent creating a sort of catch-22. The need for automation and digitization is apparent, but without the capital to support the transition, manufacturers are stuck in a rock and a hard place.
So what is next? Manufacturers must first recognize the value-add of Industry 4.0 and commit to scaling their operations to include features of this forward-thinking revolution. Once committed, the next step is to develop a detailed plan. Given limited resources, having a strategic approach will ultimately maximize the benefits of smart technology without having to reprogram due to short-fixes. The biggest hurdle is making the decision to scale and take the first step. Whether it’s setting up your current system to pull data in an efficient manner for future data analytic software or focusing on best practices for remote working, committing to Industry 4.0 is the first step. Don’t make the mistake of discounting Industry 4.0, it could be deadly in a time of disruption. Organizations that learned from the pandemic, have embraced this new revolution, and can be nimble during uncertainty are those who will survive and thrive.
Categories: COVID-19, Manufacturing & Distribution