The following blog post was contributed by Abdo, Eick & Meyers, LLP to assist businesses in understanding how recent federal legislation has changed criteria related to the Paycheck Protection Program (PPP) and the Employee Retention Credit (ERC).
The COVID Tax Relief Act (COVIDTRA) that was passed late December made drastic changes to the Paycheck Protection Program (PPP) and the Employee Retention Credit (ERC) for both 2020 and 2021. The most critical changes for eligible employers include:
- Qualifying expenses paid with PPP funds are now deductible for federal income tax purposes, however, we are still waiting on guidance from most state legislatures regarding state deductibility. This change officially means that PPP loans and their forgiveness will not be subject to federal income tax.
- Employers may now be eligible for the Employee Retention Credit (ERC). Previously, organizations which received a PPP loan were ineligible to claim the ERC. That requirement has been removed and the credit has been extended through the first six months of 2021. To employers that are eligible, the ERC may provide up to a $7,000 per employee tax credit per quarter.
- The SBA announced they will begin accepting applications for new PPP loans from limited borrowers beginning January 15, 2021. Minority and women-owned businesses will be able to borrow first-time PPP loans initially, followed by minority and women-owned businesses requesting a second-time loan.
The COVIDTRA legislation is good news for many employers. There are several critical planning considerations to discuss with your tax advisor to maximize your credit eligibility and avoid missing out on significant funding. Key decisions that should be discussed include:
- Applying for a first-time or second-time PPP loan.
- Applying for 1st round PPP loan forgiveness if your organization experienced a partial or complete operational shutdown or a significant reduction in 2020 gross receipts.
- Electing to take the Employee Retention Credit for 2020 or 2021.
There are still many unanswered questions about the PPP and ERC that we expect to receive further guidance on from the IRS in the coming weeks. Additionally, are a few strategies to consider when determining if PPP, ERC or both are right for your specific situation. Be sure to contact your tax advisor to discuss your organization’s relief options and ensure that you don’t miss significant tax credits and funding opportunities.
About Abdo, Eick & Meyers, LLP
Abdo, Eick & Meyers is a progressive CPA firm that leverages its “People + Process” by partnering with businesses to increase value, helping government audit clients operate more efficiently, and providing the very best in tax planning and preparation services. Established in 1963 in Mankato, Minnesota, the firm has evolved into a mid-sized leader in the regional accounting industry through a combination of steady organic growth and key mergers and acquisitions. Since its earliest days, the firm has carefully listened to its clients and then developed new areas of expertise and service lines to meet their needs. Learn more at www.aemcpas.com.
The Minnesota Legislature and Governor have passed legislation authorizing funding to Minnesota counties for relief grants to local businesses and nonprofits impacted by an executive order related to the COVID-19 pandemic.
Small businesses and nonprofits in Nicollet County impacted by COVID-19 can apply to receive grants to help with expenses incurred during the pandemic.
Grant awards will be provided to eligible businesses and nonprofits that have been adversely impacted by a Minnesota Governor executive order related to the COVID-19 pandemic.
Applicants must also have experienced a financial hardship as a result of the public health emergency. Grant awards will be up to $10,000 based on eligibility.
For more information, visit: co.nicollet.mn.us/800/Nicollet-County-Relief-Grant-Program
Grant applications and IRS Form W9 must be emailed to email@example.com or left in the Nicollet County Government Center drop box located on Mulberry St. in St. Peter by 4:30 p.m. on February 5, 2021.
Today, Governor Walz announced changes to current dial-back restrictions through Executive Order 20-103.
Effective Friday, December 18, 2020 at 11:59 pm, through Sunday, January 10, 2021 at 11:59 pm, the Governor has extended the provisions of Executive Order 20-99, with some modifications published in executive order 20-103. The order calls for the following changes or extension of measures related to businesses, educational institutions and social gatherings:
- Social Gatherings will be limited to a maximum of 10 people (two households) while indoors with masks worn at-all-times. Indoor gatherings are discouraged. Outdoor social gatherings are limited to three families and 15 people outside.
- Indoor entertainment, restaurants, bars and establishments will remain closed through January 11, 2021.
- Outdoor entertainment will be allowed at 25% capacity, up to 100 people at a time. If food and drink are served, people must be seated.
- Gyms and fitness studios will re-open at 25% capacity with no group fitness classes, pool activity or use of showers. Masks must be worn at-all-times with social distancing of 12 feet at gyms.
- Youth sports will resume practices on January 4.
- Elementary schools (K-5) can conditionally open to in-person learning starting on January 18, 2021. It is the Governor’s goal to get back to in-person learning and the state will purchase PPE for schools, teachers, etc.
- Outdoor dining allowed at 50% capacity, up to 100 people, seated only, only 4 per party/table. 50% of the walls must remain open for airflow. Food trucks fine but people must sit down to eat.
Additionally, Walz will be signing a $216 million Business Relief Package into law.
The Minnesota legislature has passed a business assistance package in response to COVID-19 impacts which includes approximately $217 million to the General Fund in FY21 and about $25 million in FY22. Its provisions include three business relief components:
- Business Assistance Grants
- Unemployment Insurance Extension
- Hospitality Industry Waiver of Certain Fees
Greater Mankato Growth has partnered with the Minnesota Ready Coalition lead by the Minnesota Chamber of Commerce to call on Governor Tim Walz to provide immediate support to those businesses and their employees most impacted by the issuance of Executive Order 20-99. Greater Mankato Growth joined 90 partner chambers and associations across the state in sending the Governor a letter this week regarding the urgency in supporting these businesses/organizations. Our organization continues to follow and educate members on proposed relief plans and take action to support local businesses through a variety of initiatives. Read More
Update: Details of the final relief bill have not yet been announced. A special session is expected to take place on December 14, 2020 and state leaders are optimistic that legislators will be able to work out an agreement by that time.
MN State Government leaders announced two proposed relief packages for businesses and individuals who have been impacted by the recent shutdown and COVID-19 in general. Legislators are still working through the details of both packages with a final relief package expected to be released on December 1. Greater Mankato Growth will share additional information as soon as it becomes available.
Here’s what we know about the Governor’s proposed package:
- Direct relief through the Minnesota Department of Revenue is planned for all 14,000 businesses affected by the shutdown.
- Details on this are not specific, but Governor Walz referenced direct payments to businesses and waiver of regulatory fees. Governor Walz also called for a moratorium on eviction for small businesses.
- Extension of unemployment benefits by 13 weeks to individuals who have been on long-term unemployment.
- Direct payments of $500 to families receiving MFIP or DWP benefits.
- A one time grant is being proposed for restaurants to supply healthcare workers, homeless shelters, and long-term care facilities.
- Proposed tax credit for businesses that donate food that would otherwise spoil or be thrown away.
Today, Governor Tim Walz announces Executive Order 20-99 taking effect on Friday, November 20 at 11:59 p.m. (CST).
In general, key points from the Governor’s announcement include:Read More
Today, Governor Tim Walz announced Executive Order 20-96 (click the link for full details) , taking effect on Friday, November 13 at 10 p.m. (CST). The announcement amends Executive Order 20-74 with specific steps for social gatherings and guidelines for bars and restaurants.
In general, the order calls for the following measures:
- Limits all social gatherings (indoor or outdoor) to 10 people and all social gatherings involving members of more than 3 households (regardless of the size of the gathering).
- Bars, restaurants, food courts, cafes, coffeehouses, taverns, brewery taprooms, wineries, golf courses and clubs, dining clubs, tobacco shops, and other places of public accommodation offering food, beverages, tobacco products for on-premises consumption, are required to close by 10 p.m. every day, starting Friday, November 13. Delivery service, or curbside pick up options already in place for certain industries in this group is still allowed.
- Venues that host celebrations, receptions, and gatherings will be capped at 50 people, effective November 27 at 10 p.m.
- No bar seating service.
- This figure is reduced to 25 people on December 11 at 10 p.m.
The Governor also announced a proposal for $10 million in additional funding to businesses that have already applied for relief through the Small Business Relief Grant Program. This program provides $10,000 grants to impacted businesses.
Over the past several months, Greater Mankato Growth has been at the table on behalf of it’s members participating in weekly calls with the Department of Employment & Economic Development (DEED) officials to obtain first-hand information, advocate, ask questions and provide feedback from the Greater Mankato region.
Most recently, our organization began participating in calls specifically focused on issues surrounding the restaurant/hospitality industry. To best understand the needs of this industry locally, we have convened two listening sessions with restaurant/hospitality members and continuing these as needed to learn more and bring forward local concerns to State officials as well as determine what we can do to be supportive here in our community.
On October 16, Greater Mankato Growth sent a letter to Governor Walz respectfully sharing direct feedback from members in this industry in addition to asking for partnership, further action and support. You can view the letter here.
Our advocacy efforts will continue and if you would like to help share messaging and/or provide local testimonials supporting our businesses, please contact Jaci Sprague at firstname.lastname@example.org for more details.
With four days left to election day, we would like to remind area voters that there are resources available to help you vote at GreaterMankatoElections.com. Our website has election resources that can help you determine where and how to vote and can help you decide between candidates, if you have not done so already. Our website contains candidate questionnaires ranging from local races to the race for Minnesota’s 1st Congressional District. In addition, you can find saved recordings of the candidate forums that we hosted as well as links to forums hosted by other organizations in our community.
Important! A recent decision by the US Eighth Circuit Court of Appeals has held that all mail in ballots received after 8pm on Election Day must be set aside, with the expectation that a future ruling will invalidate those votes. We are encouraging all voters with outstanding absentee ballots to submit those ballots in person.
TRACK YOUR BALLOT: https://mnvotes.sos.state.mn.us/AbsenteeBallotStatus.aspx
Member guest blog post, submitted by EideBailly. This article originally appeared on EideBailly.com
The government has released several updates to its Paycheck Protection Program (PPP) loan forgiveness guidance over the last few weeks. Here is a brief summary to help guide you through the PPP loan forgiveness process. Read More
This year’s Minnesota Chamber of Commerce “fly-in” is a virtual opportunity for business leaders to raise the visibility of Minnesota in our nation’s capital while exploring key issues integral to growing Minnesota’s economy and receive a timely update on business issues surrounding the pandemic. Participating business leaders have the opportunity to advocate and promote their own priorities with federal elected officials. All members of the Minnesota delegation have been invited and participants will have a chance to meet with their member of Congress by district in breakout sessions. The event will also feature key officials and agencies, and a trusted pollster, who can update on this year’s critical elections. Read More