House passes Build Back Better Act with universal paid leave

BBB Act, Universal Paid Leave – Journal Of Accountancy

The nearly $2 trillion Build Back Better (BBB) Act, passed Friday by the U.S. House of Representatives, contains many items of interest to CPAs, their clients, and their employers.

This article examines nontax provisions in the bill, H.R. 5376. A separate article covers the myriad tax-related items in the bill.

The vote passing the bill was 220-213.

The House’s passage of the BBB Act came after months of negotiations between moderate and progressive Democrats in the House and the U.S. Senate. House Speaker Nancy Pelosi, D-Calif., had hoped to have the House vote on the bill on Nov. 5, but those plans were scrapped when several moderate Democrats said they would not vote on the bill until the Congressional Budget Office released its official estimate of the impact on the U.S. deficit.

The CBO’s estimate on the bill adding $160 billion to the deficit over 10 years was finalized on Thursday.

The bill now goes to the U.S. Senate, where it is expected to undergo a couple of weeks of assessment to determine if all provisions of the bill qualify to be passed through the budget reconciliation process. Reconciliation allows certain budget-related bills to be passed by as few as 51 votes and avoid being stopped by a filibuster, which requires 60 votes to end.

The 100 Senate seats are split 50-50 between Democrats and Republicans, with the chamber’s president, Vice President Kamala Harris, representing the tie-breaking vote. Republicans have been unified against the BBB Act, leaving Democrats with the chore of crafting legislation that adheres to reconciliation rules and is palatable to all 50 of their senators. The legislation looks unlikely to escape the Senate chambers in its current form, with Sen. Joe Manchin, D-W.Va., telling CNN on Thursday that he has not yet decided whether to support the bill.

BUSINESS ITEMS OF NOTE IN H.R 5376

Universal paid leave

In one of its most significant and contentious provisions, the BBB Act would provide all U.S. workers with paid leave for the first time. Specifically, the bill guarantees four weeks of paid leave to all workers who are:

  • New parents;
  • Dealing with their own serious medical conditions; or
  • In need of leave to care for a loved one with a serious medical issue.

The benefits would be provided to workers in one of three ways:

  • Via a public program run by the Social Security Administration that would cover all public- and private-sector workers without regard to employer size, including part-time and self-employed individuals.
  • An already-enacted “legacy state” paid leave program that provides benefits equivalent to, or better than, the federal benefit, and for which the state would be reimbursed up to what it would have cost to cover their workers in the federal program.
  • A plan (self-insured or via an insurer) from an employer that voluntarily chose to offer 100% of employees paid leave equal to or better than the public benefit in every respect. The leave policy must include job reinstatement protection even if a worker is not covered by the Family and Medical Leave Act. Employers whose plans meet these conditions would be reimbursed for the lesser of 90% of the national average cost of paid leave benefits or 90% of their insurance premium.

Small business investments

The BBB Act includes around $5 billion in funding to support small businesses.

Most of that money, $3.385 billion, is designated to improve the ability of small employers and entrepreneurs to access capital. Specifically, the bill allocates:

  • Almost $2 billion in total funding over a 10-year period to fund direct loans for the smallest businesses and government contractors under the 7(a) lending program administered by the U.S. Small Business Administration (SBA).
  • $950 million in immediate, direct fee relief for new borrowers of the SBA 7(a) and 504 loans. The funding will be available until Sept. 30, 2026, to reduce or waive fees for loans of $2 million or less.
  • $60 million to diversify and create equity within the Small Business Investment Company (SBIC) program.
  • $275.9 million to enhance and improve the Community Advantage program and also provide the SBA with authority to partner with not-for-profit lenders to deliver capital through the 7(a) loan program.
  • $100 million to establish a pilot program for providing capital for cooperatives.

Other small business-related investments include:

  • $1 billion over a 10-year period to establish a national network of “uplift incubators” to assist new businesses and small government contractors, with the goal of sparking economic development in underrepresented communities.
  • $200 million over 10 years to provide cash grants of at least $100,000 to growth accelerators to expand their capabilities to assists small businesses focused on technology.

Other business-related provisions

The BBB Act invests about $390 billion to fund universal pre-kindergarten programs for all 3- and 4-year-olds and to improve access to affordable child care. Democrats assert that child care costs are too expensive for many families, forcing millions of Americans out of the workforce and contributing to the labor shortage that has affected millions of employers. The BBB Act would ensure that nearly all families of four earning up to $300,000 would pay no more than 7% of their income on child care. In addition, the act would provide funding for child care providers to raise wages for their workers and add staff to serve more families.

Other business-related allocations scattered through the 2,100-page bill include:

  • $5 billion for the Department of Commerce to identify and monitor critical vulnerabilities in the manufacturing supply chain.
  • $1 billion in grants to help minority-owned businesses launch and expand their operations. The bill provides another $400 million to expand the Minority Business Development Agency and $200 million to establish rural business centers that primarily serve rural minority-owned businesses.
  • $500 million for the Federal Trade Commission to create and operate a new bureau dedicated to stopping unfair and deceptive acts and practices related to privacy violations, data security incidents, identity theft, and other data abuses.

 

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Eligible Paycheck Protection Program expenses now deductible

IR-2021-04, January 6, 2021

WASHINGTON — The Treasury Department and the Internal Revenue Service issued guidance PDF today allowing deductions for the payments of eligible expenses when such payments would result (or be expected to result) in the forgiveness of a loan (covered loan) under the Paycheck Protection Program (PPP).

Today’s guidance, Revenue Ruling 2021-02 PDF, reflects changes to law contained in the COVID-related Tax Relief Act of 2020, enacted as part of the Consolidated Appropriations Act, 2021(Act), Public Law 116-260,which was signed into law on December 27, 2020.

The COVID-related Tax Relief Act of 2020 amended the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to say that no deduction is denied, no tax attribute is reduced, and no basis increase is denied by reason of the exclusion from gross income of the forgiveness of an eligible recipient’s covered loan. This change applies for taxable years ending after March 27, 2020.

Revenue Ruling 2021-02 obsoletes Notice 2020-32 and Revenue Ruling 2020-27. This obsoleted guidance disallowed deductions for the payment of eligible expenses when the payments resulted (or could be expected to result) in forgiveness of a covered loan.

For more information about this, the COVID-related Tax Relief Act of 2020, and other tax changes, visit IRS.gov or call your local ATS office.

UIA Email Scam Alert

Michigan Attorney General Dana Nessel today issued an important alert advising residents to be aware of a current scam taking advantage of claimants who are collecting unemployment benefits.  

Claimants are receiving an email from a Gmail account that appears to be from the Unemployment Insurance Agency (UIA) asking for personal information. The scammer is also attaching what looks like an actual news release from the UIA in an apparent effort to strengthen the credibility of the email. 

“There is no government agency, state or federal, that uses Gmail for official purposes,” Nessel said, noting the scammer’s email address. “Michigan residents should ALWAYS examine the full email address if the sender is requesting their personal information.” 

If you received this email, do not respond. UIA would never ask you to reply to an email with your personal information. Responses to ID verification requests from UIA should only be uploaded through your secure Michigan Web Account Manager (MiWAM) account online at the UIA’s website, where you can also learn more about protecting yourself from identity theft.

Anyone who has fallen for this scam should immediately Report Fraud or Identity Theft with the UIA. They should also monitor their banking and account information each time they certify for benefits. 

Pure Michigan Small Business Relief Initiative

Approved November 30th the Pure Michigan Small Business Relief Initiative will use federal CARES Act funding to provide $10 million in grants to meet the needs of Michigan small businesses impacted by COVID-19. Applications will open on December 15th; up to $15,000 is eligible per applicant on a first-come, first-serve basis.

To qualify for grant support, businesses must meet eligibility criteria including but not limited to:

  • Being a business in one of the targeted industries
  • Must comply with all state and local orders related to COVID-19, including, but not limited, to the Michigan Department of Health and Human Services.
  • Be a for-profit entity (i.e., a sole proprietorship, partnership, corporation, or LLC)
  • Have a physical establishment in the Michigan County of Application and is not a home-based business
  • Provide goods or services to multiple clients or customers
  • Be current, or in a payment plan, on all local, state, and federal taxes due through 1/1/2020
  • Have an active and valid state license(s)/registration(s), if applicable
  • Is not an adverse party to litigation involving the state or municipality
  • Business or Business owner has not filed for bankruptcy in the last ten years.
  • Can identify a need for payroll, rent or mortgage payments, and utility expenses necessary to continue/restart business operations relative to the total grant amount
  • Had annual gross revenues in 2019 greater than $25,000
  • Has at least two employees, including the owner(s)
  • Has fewer than 50 employees (including full-time, part-time, and owner(s) on a world-wide basis)

Please contact your local ATS office with any questions or support during the application process.

For more information on this initiative please visit; https://www.michiganbusiness.org/about-medc/covid19/relief/

For more on the original article by Sherri Kolade please visit; https://michiganchronicle.com/2020/11/30/relief-on-the-horizon-michigan-strategic-fund-board-announces-pure-michigan-small-business-relief-initiative/#/?playlistId=0&videoId=0

ATS Advisors offices have re-opened

In the interest of safety for our clients and employees we will be operating under a no-contact policy until further notice.  What this means to our clients is we have drop off availability at our Plymouth, Allen Park, Grayling and Royal Oak locations. Unfortunately, due to building access restrictions we are not able to offer drop off at our St. Clair Shores office at this time.

Please check with your local ATS office for available drop off times.

Clients may also mail or electronically submit documents.  To send documents using our FileShare option, please contact your ATS office for contact for instructions.

Phone appointments are available. Simply call our office or request an appointment when you drop off your documents to schedule your appointment.

To check the status of your IRS income tax refund, please go to IRS – Where’s my Refund?

To check the status of your Michigan income tax refund, please go to Michigan – Where’s my Refund?

To check the status of your Economic Impact Payment (Stimulus payment), please go to Where’s my Economic Impact Payment?

Completed client returns will be mailed to clients with instructions. Please do not hesitate to reach out and talk with one of tax professionals if you have questions regarding your individual and/or business tax returns.

COVID-19 has changed how ATS Advisors and businesses in general are operating. While we anticipate some of these changes becoming permanent, we look forward to when we are able to meet with our clients face to face.  During these unprecedented times we will continue to be available to all of our clients and provide the services you have entrusted to us.

Taxpayers can check the status of their refund on IRS.gov or the IRS2Go App

Taxpayers can check the status of their refund on IRS.gov or the IRS2Go App

Taxpayers who filed their 2019 tax return and are waiting for their refund can check their refund status by going to IRS.gov and clicking on Get Your Refund Status to access the Where’s My Refund? tool.

People can check the status of their tax return about 24 hours after the IRS acknowledges receipt of an electronically filed tax return and up to four weeks after a taxpayer mails a paper return. The Where’s My Refund? tool updates once every 24 hours, usually overnight, so taxpayers only need to check once a day.

Taxpayers can also check their refund status, make a payment, and find free tax prep help through the IRS2Go app for their mobile device.

Taxpayers will need three things to use the tool:

  • Their Social Security number
  • Their tax filing status
  • The exact amount of the refund claimed on their tax return

Once the taxpayer enters that information the tool will display the progress of their tax return through the following stages:

  • Return received
  • Return approved
  • Refund sent

Taxpayers should use the IRS2Go app or the official Where’s My Refund? tool at IRS.gov to avoid scammers who may create look-alike sites in an attempt to steal sensitive personal information. They should go directly to IRS.gov and not rely on search engine results or click on links to refund sites they receive by email or text.

In certain instances, a taxpayer will need to call the IRS, such as:

  • It has been 21 days or more since they electronically filed their tax return
  • It has been more than six weeks since they mailed their return
  • When the Where’s My Refund? results tell the taxpayer to contact the IRS

if you need help filing your taxes, please call one of our offices:

Plymouth 734.454.4100, Allen Park 313.388.7180,
Grayling 989.348.4055, Royal Oak 248.399.7331, or St. Clair Shores 313.371.6600

Paycheck Protection Program (PPP) Small Business Administration Loan Application PPP Loan Document Check List

Based on readings and preliminary information from the SBA: We believe that the following information may be required:

2019 IRS Quarterly 940, 941 or 944 payroll tax reports

Payroll reports for a twelve-month period (ending on your most recent payroll date), which will show the following information:

  • Gross wages for each employee, including officer(s) if paid W-2 wages.
  • Paid time off (Vacation, Holiday, etc )for each employee
  • Family medical leave(FMLA) pay for each employee
  • State and local taxes assessed on an employee’s compensation
  • 1099s for independent contractors for 2019

Documentation showing total of all health insurance premiums paid by the company owner(s) under a group health plan.

  • Include all employees and the company owners

Document the sum of all retirement plan funding that was paid by the company owner(s) (do not include funding that came from employees out of their paycheck deferrals).

  • Include all employees and the company owners
  • Include 401K plans, Simple IRA, SEP IRA’s

We are here to help, these times are trying, and we are working remotely, but we are working and we will do our best to assist you as you navigate your way through.

ATS Advisors A Certified Public Accounting Firm Plymouth, Michigan 734-454-4100

“Stay Home, Stay Safe” Executive Order

Today Governor Whitmer’s announced her Executive Order of “Stay Home, Stay Safe” wherein all non-essential businesses must close as of midnight tonight for three weeks.  Therefore, ATS Advisors is closing all their offices until April 15, 2020.

Our priority continues to be our commitment to and the well-being of our clients, employees and communities. Our employees will continue to have limited access to email, however, it may take a few days to receive a response to inquiries. If you have not received a response to an email within a few days, please contact our main office at 734.454.4100 and leave a message.  The voice mail messages are being checked regularly and you will receive a return call.

Please remember the filing and payment deadline for taxpayer’s has been extended to July 15, 2020. This is automatic, and no extension paperwork needs to be filed.

The COVID-19 Pandemic is an unprecedented event and we at ATS Advisors are striving to ensure all our client’s tax and accounting needs are addressed during this time. Please let us know if you have any questions or concerns now or in the future.

TAX FILING DEADLINE EXTENDED TO JULY 15, 2020

It was announced today the deadline for filing of all U.S. tax returns has been extended to July 15, 2020.  This follows the announcement earlier this week tax payments were deferred until July 15, 2020 for most individuals. 

What does this mean for our clients?

  • All ATS Advisors offices are open and operating. We have returned to our regular hours of:

Monday – Friday       9:00 AM – 4:30 PM

  • Clients do not need to file an extension of time to file, unless they are unable to file their taxes on or before July 15, 2020.
  • We will continue to prepare tax returns and e-file completed returns, per our normal policy.
  • Offices are restricted to “drop-off” only.  Each office has a designated location for clients to drop off tax return preparation documents, e-File Authorization Forms, and payments for tax preparation fees.
  • ATS Advisors has restricted “face-to-face” contact with clients for their protection as well as our staff. Completed tax returns will be mailed, via USPS.  Clients may schedule phone appointments to review their tax returns with one of our tax professionals.

Our business client services will continue without interruption.

Please continue to check our website for updates and contact our office if you have any questions or concerns.