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The Congress at Work series of articles is designed to give you a glimpse of various types of legislation currently under consideration. While either the Senate or the House of Representatives may initiate a bill proposal, be aware that many bills never become law; they may never make it out of committee, be blocked by a Senate filibuster, delayed, lack enough votes, never be agreed upon by the two houses, or vetoed by the president. 

Law Enforcement Suicide Data Collection Act (S 2746) – This bill authorizes the establishment of a new Law Enforcement Officers Suicide Data Collection Program to be administered by the FBI. The program will gather data related to suicides and attempted suicides of current and former officers, as well as the wrongful detainment of U.S. nationals abroad. The purpose of the Act is to help understand and prevent law enforcement suicides. The bill was introduced by Sen. Catherine Cortez Masto (D-NV) on Oct. 30, 2019. It was passed by the House and the Senate in May and was signed into law on June 16. 

Uyghur Human Rights Policy Act of 2020 (S 2744) – Sen. Marco Rubio (R-FL) introduced this legislation on May 14 as a means to condemn human rights violations of ethnic Turkic Muslims in Xinjiang. The bill calls for an end to the arbitrary detention, torture, and harassment of these communities inside and outside of China. The Act was passed by both the Senate and the House in May and was signed into law by the president on June 17.

Hong Kong Autonomy Act (HR 7440) – Introduced by Rep. Brad Sherman (D-CA) on July 1, this legislation authorizes the president to sanction foreign individuals, entities and financial institutions that materially contribute to China’s failure to preserve Hong Kong’s autonomy in response to a written report to be submitted by the State Department each year. While the bill also gives the president the authority to waive or terminate sanctions, it permits Congress to override such action by passing a joint resolution of disapproval. The Act was unanimously passed in Congress and signed into law by the president on July 14. 

Emergency Aid for Returning Americans Affected by Coronavirus Act (S 4091) – This bill was introduced by Sen. Chuck Grassley (R-IA) to amend section 1113 of the Social Security Act. The Act authorizes funding for the fiscal year 2020 in order to increase payments for temporary assistance to U.S. citizens and their dependents who return from foreign countries due to the COVID-19 crisis and are without available resources. The legislation enables the Department of Health and Human Services to provide monetary payments and medical care on a temporary basis. The Act was introduced and passed in both the House and Senate on June 29 and signed into law on July 13. 

Protecting Nonprofits from Catastrophic Cash Flow Strain Act of 2020 (S 4209) – This bill is designed to improve emergency unemployment relief for governmental entities and nonprofit organizations by amending Title IX of the Social Security Act. The bill was introduced by Sen. Tim Scott (R-SC) on July 2. It was passed in the House and in the Senate on July 9 and is currently awaiting signature by the president. 

Moving Forward Act (HR 2) – On June 11, this Act was introduced by Rep. Peter Defazio (D-OR). This bill would authorize funding for federal highways, highway safety programs, and transit programs. It also addresses climate change strategies to reduce weather impacts on surface transportation by conducting a vulnerability assessment and recommending ways to enhance resilience for highways, mass transit, and rail. The bill would allocate a grant program to help improve the safety, state of good repair, and connectivity of transportation infrastructure in rural communities. It also directs the Department of Transportation to establish a pilot program for a national motor vehicle per-mile user fee to restore and maintain the long-term solvency of the Highway Trust Fund to uphold a state of good repair for the future. The bill passed in the House on July 1 and is currently in the Senate, where it enjoys considerable bipartisan support for infrastructure projects.

Over the weekend, President Trump issued a series of executive actions. Three of the four memos aim at extending CARES Act provisions that have expired already or will expire soon. The fourth seeks to mimic the payroll tax holiday for which the President has been advocating.

The four executive actions address the following areas:

1. Unemployment Benefits – This memorandum authorizes an extension of the enhanced unemployment benefits legislated in the CARES Act. It lowers the weekly payment from $600 to $400. According to the action, states are responsible for 25% of the weekly payments while the remainder will be funded by the Disaster Relief Fund.
2. Eviction Protection – Saturday’s White House memo addressing eviction protection directs the secretary of Health and Human Services and the director of the CDC to “consider whether any measures temporarily halting residential evictions of any tenants for failure to pay rent are reasonably necessary to prevent the spread of COVID-19.” It is not an extension of the CARES Act eviction moratorium and provides no financial assistance to renters.
3. Student Loans – This memorandum calls for a waiver of student loan interest until the end of 2020. It only covers loans held by the Department of Education, as the White House does not hold authority over privately held student loans.
4. Payroll Tax – This executive action offers a deferral on federal tax withholdings for those earning less than $100,000 per year, starting September 1^st and lasting through the end of 2020. While the President has indicated he would like to explore a way of eliminating the deferred tax, the memo itself includes no tax forgiveness.

There is much uncertainty surrounding these executive actions, including questions about their legality and the source of their funding. Please do not hesitate to reach out to your Ross Buehler Falk & Company accounting advisor with any questions or concerns.

On August 4th, the U.S. Small Business Administration (SBA) released additional guidance regarding forgiveness of Paycheck Protection Program (PPP) loans. In consultation with the U.S. Department of the Treasury, the SBA added 23 new questions to their PPP FAQ page.

The SBA sorts the new loan forgiveness FAQs into the following four categories:

1. General Guidance – The first three FAQs cover broad subjects: which forgiveness application should be used by sole proprietors, independent contractors, and self-employed individuals without employees; whether it is acceptable for PPP lenders to accept scanned documents and E-signatures; and whether borrowers should make loan payments between the time that they submit their forgiveness application and the SBA approves or denies their forgiveness amount.
2. Payroll Guidance – This second category comprises eight questions. These FAQs cover specifics about which payroll costs are eligible for PPP loan forgiveness and how borrowers should go about calculating the payroll portion for their loan forgiveness application.
3. Nonpayroll Guidance – The next seven questions address how borrowers should calculate the nonpayroll portion of their loan forgiveness application, including some specifics about which nonpayroll costs do and do not qualify.
4. Reduction Guidance – The new FAQ ends with five questions regarding loan forgiveness reductions, including what borrowers should do about laid off employees who declined to be rehired.

For full details, click here to read the new SBA PPP FAQs.

The Internal Revenue Service (IRS) recently announced finalized guidance regarding business interest expense limitations. In a helpful article from the Journal of Accountancy, author Sally Schreiber offers an overview of the new rules.

Background

The business interest expense limitation was created by the Tax Cuts and Jobs Act (TCJA) of 2017 and subsequently modified by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) of 2020. The TCJA established that for tax years 2018 and beyond, deductions for business interest expenses are limited to the total of three items:

1. Business interest income
2. 30% of adjusted taxable income (ATI)
3. The interest expense of the taxpayer’s floor plan financing

The CARES Act made two changes: it adjusted item number two to 50% for tax years 2019 and 2020 and made it allowable for taxpayers to calculate their 2020 limit using their 2019 ATI.

New IRS Regulations

The recently released IRS regulations offer instructions in four areas:

1. Determining the interest expense limitation
2. The definition of interest, for the purposes of the limitation
3. Who is subject to the limitation
4. How the limitation applies in various special cases

The guidance will go into effect 60 days from the date of its publication in the Federal Register, which has yet to be announced.

Additional Proposed Regulations

In addition to the new final guidance, the IRS published additional proposed regulations regarding business interest expense deduction limitation issues, including how to allocate interest expense for passthrough entities and more. The release of this proposed guidance opens up a 60-day period for written and electronic comment submission, as well as requests for a public hearing regarding the guidance.

For full details on the recent IRS release, click here to read the article at the Journal of Accountancy.

On Wednesday, July 1 the House agreed unanimously to an extension of the Paycheck Protection Program (PPP). The five-week extension originated in the Senate on Tuesday, where it was approved late in the evening. President Trump signed the bill into law on Saturday, July 4.

With around $129 billion of loan funds still available through the PPP, the application window closed on Tuesday, June 30 at midnight. However, this extension means that the U.S. Small Business Administration (SBA) will begin to accept applications again. The five-week extension puts the new application deadline at midnight on August 8.

For further details on the PPP and the recent extension, check out this article from the Journal of Accountancy.

Late last week, the United States Small Business Administration (SBA) released yet another round of guidance updates regarding the Paycheck Protection Program (PPP). The areas covered by this latest release are maturity dates and loan amounts. A recent article from the Journal of Accountancy offers a brief overview of the guidance update.

The additional guidance was released in the form of new and updated PPP FAQ questions on the SBA website. Here are details of the changes made to the FAQ page:

FAQ 49 was added to the list. It clarifies that PPP loans that were assigned an SBA loan number on June 5, 2020 and later have a five-year maturity window. PPP loans assigned an SBA loan number prior to June 5, 2020 maintain the two-year maturity window established by the CARES Act. However, the borrower and lender may work together to extend the loan term to five years.

FAQ 10 was updated to reflect the new maximum loan amounts for self-employed individuals whose businesses were in operation on February 15, 2020 but not in operation between February 15, 2019 and June 30, 2019. For these individuals, the maximum PPP loan amount is calculated by multiplying their average monthly payroll for January and February 2020 by 2.5. If the individual received an Economic Injury Disaster Loan (EIDL) between January 31, 2020 and April 3, 2020, they should add the outstanding amount that will be refinanced by the PPP loan to their calculation.

FAQs 1, 2, and 4-7 were updated to reflect that the Paycheck Protection Program Flexibility Act of 2020 extended the covered period from eight weeks to 24 weeks.

For further details, click here to read the article in full at the Journal of Accountancy.

This week, the Small Business Administration (SBA) and the U.S. Department of the Treasury released new information for recipients of loans through the Paycheck Protection Program (PPP). A recent article from the Journal of Accountancy offers helpful details on the revised loan forgiveness application, the new EZ application, and the new interim final rule on calculating compensation for loan forgiveness.

The Revised PPP Loan Forgiveness Application

The author notes three key items included in the updated application for PPP loan forgiveness:

1. Clarification that S corporation owners may not include health insurance costs in their payroll cost calculation, but they may include retirement costs.
2. Guidance regarding the use of safe harbors in conjunction with loan forgiveness.
3. The option to use either the 8-week or the 24-week coverage period for borrowers that received PPP loans prior to June 5.

Click here to view the revised PPP loan forgiveness application. 

Click here to view the instructions for completing the application.

The New EZ PPP Loan Forgiveness Application

The EZ application was created for use by PPP borrowers with relatively straightforward cases (e.g., fewer calculations and less documentation). In order to be eligible to use the EZ application, borrowers must fit one or more of the following criteria:

• Be self-employed and have no employees
• Not have reduced salaries or wages by more than 25% and not have reduced hours or employees
• Both experienced a reduction in business due to COVID-19 health directives and did not reduce salaries or wages by more than 25%

Click here to view the EZ PPP loan forgiveness application. 

Click here to view the instruction for the EZ application.

New Interim Final Rule

Just prior to releasing the revised and new applications for loan forgiveness, the SBA issued a new interim final rule. The rule addresses the fact that the Paycheck Protection Program Flexibility Act (PPPFA) increased the covered period for PPP funds from eight weeks to 24 weeks. The rule increases the cap on salaries and compensation to account for the increase in the covered period. For borrowers using the 8-week period, PPP loan forgiveness is allowed for up to $15,385 for each individual employee ($100,000 annualized to an eight-week period). For borrowers using the 24-week period, PPP loan forgiveness is allowed for up to $46,154 for each individual employee ($100,000 annualized to a 24-week period).

Additionally, the rule addresses owner compensation in light of the increase in the covered period for PPP funds from eight weeks to 24 weeks. The calculation for owner compensation is more complex than that for individual employee compensation in order “to prevent owners from reaping PPP windfalls that Congress did not intend.” For borrowers using the eight-week period, PPP loan forgiveness is allowed for up to $15,385 of owner compensation. For borrowers using the 24-week period, PPP loan forgiveness is allowed for up to $20,833 of owner compensation.

Lastly, the interim final rule also adjusted previous guidance in order to account for changes made by the PPPFA. For loans made on or after June 5, 2020, the minimum term is five years. For loans made prior to June 5, 2020, the two-year minimum term is two years, unless the borrower and lender agree upon an extension. The portion of PPP funds that are required to be used on payroll costs in order for a borrower to qualify for forgiveness is reduced from 75% to 60%.

For further details, click here to read the article in full at the Journal of Accountancy.

Cindy Barr has devoted the entirety of her professional career to serving Ross Beuhler Falk (RBF). She joined the firm in June of 1989, just after graduating from college. She currently serves as a Supervisor. Her favorite aspect of this role is that it allows her to see the whole picture of each client—from preparing financial statements through filing tax returns.

A cum laude graduate of Elizabethtown College, Cindy holds a Bachelor of Science in Accounting. While a student, she joined Alpha Lamda Delta and Delta Mu Delta, two honor societies. After graduating in 1989, she continued to study hard and went on to earn her CPA license in 1991.

Outside of the office, Cindy is an active participant in both the professional and local communities. She is a member of the American Institute of Certified Public Accountants (AICPA) And the Pennsylvania Institute of Certified Public Accountants (PICPA). She puts her accounting knowledge to work as a member of her church’s Finance Committee.

Cindy enjoys living in the Lancaster area because it offers an ideal mixture of country and urban living. While both of her parents came from large families, Cindy is an only child. But that doesn’t mean she is lacking in close family—she has 20 first cousins, alone! While Cindy’s father passed away 10 years ago, she still gets to enjoy spending time with her mother. She also has a cat named Buddy.

Want to get to know Cindy even better? We asked her a variety of silly questions, and here’s what we learned:

• If Cindy could visit any fictional place, she would go to Oz, from the Wizard of Oz (as long as she could click her heels to return home anytime she wanted).
• The farthest from home that Cindy has ever traveled is Italy—she toured Milan, the Tuscany area, and Rome.
• Cindy’s first job was working as an assistant in a library. It never failed that the copier toner would run out on the days when she wore white!
• Living in Elizabethtown, which is where the Wrigley-Mars plant is located, had an impact on Cindy’s life—her favorite smell is chocolate!
• If Cindy didn’t have to sleep, she would spend the extra time catching up on movies that she has meant to watch over the years.

Due to the unprecedented effects of COVID-19, the line between our professional and personal lives has blurred. Trying to take care of job responsibilities from home requires new ways of navigating. Here are a few ideas to help you become more productive while working at home – and stay grounded in these uncertain times. 

Dress for Work

As tempting as it might be to stay in your pajamas, do not do it. Act as if you are going into the office: shower, put on your work clothes, and head to your desk. You will feel more focused and professional. According to Heather Yurovsky, founder of Shatter & Shine, one should not underestimate the power of putting on clothes suitable for public viewing. “It makes you feel human, confident and helps draw the line between being at home and being at work,” she says. 

Create a Dedicated Space

While working from the kitchen table or couch in your living room might be more comfortable, it also might prohibit your productivity. Set up a home office. Get an extra monitor. Make sure you have dependable internet service. In short, replicate a professional workspace as best you can—one that feels separate from the rest of your home. When your surroundings are more in line with a real office, you will be more motivated. Plus, you will be able to more easily turn on when your day begins and turn off when it’s over.

Set Up a Plan for the Kids

Even though school is out, chances are you still have to work. Create a schedule for the kids. Carve out certain hours for activities in designated areas of the house. According to Emily Weinmann of Us Happy Four, one of the best ways to keep the little ones occupied and happy is to prepare activity stations. Another great idea is to prepare snacks the night before and put them in your office, in the fridge or their rooms. When someone is starving, the snacks will be ready. And finally, relax screen time. When you are stuck at home and it is either raining or scalding hot outside, you will be grateful for technology.

Keep Regular Hours

If you stick with regular hours, you will not only be able to seamlessly transition when you return to the office, but you will also be on the same schedule as your colleagues. Everyone will be working concurrently, so you will be more efficient, easier to reach, and more productive. When lunchtime comes, leave your home office and eat in the kitchen, the patio, or the backyard. Even though you are in one place, the simple change of venue will be mentally refreshing.

Set Clear Boundaries

This is especially important if you have other people in your home. Try your best to discourage intrusions. When you are in a meeting, shut the door. Lock it if you must. If your home is more open, put signs in strategic places where people frequent, like the entry to the kitchen or stairs to the basement. This way, they will pause and reflect on whether an interruption is really necessary. 

Limit Your Intake of News

In a society that is saturated with news at every turn, it is tough not to get sucked into the latest tragedy. Be intentional: Turn off the TV during work hours. Do not visit news sites when you’re at the computer or on your phone. If you feel you must have a bit of news to break up your day, tune in for a few minutes during lunch or in the evening. But even then, be judicious and limit your time. If some story sends you over the edge, turn it off and head outside for a walk. Change the channel. Put on your favorite music.

These days, we are all doing the best we can, taking life one day at a time. Unless you already work from home or have decided that you will work from home for the rest of your life, remember that things will change.

Sources

https://www.themuse.com/advice/coronavirus-work-from-home-tips

https://www.forbes.com/sites/bryanrobinson/2020/03/14/9-tips-to-be-productive-when-working-at-home-during-covid-19/#2af81a845a38

https://www.todaysparent.com/family/family-life/working-from-home-with-kids-coronavirus/

COVID-19 has had an unprecedented impact on all aspects of American businesses, but perhaps none have been as severely affected as small business owners. Surviving this disaster will require more than just time: you will need to take a pragmatic view of what has happened and what steps you are willing and able to take in order to bounce back. Here are our suggestions:

1. Spending

Take a hard look at what you’re spending now and what you were spending before to determine what can be eliminated. Efficient spending is going to make a real difference in your business’ ability to survive this crisis. That means you need to look at what you’re spending now, while you’re cutting expenses to the bone, as well as what you were spending before. If you can break your expenditures down into what is necessary versus what can be eliminated, you’ll be able to cut out a lot of the fat and give yourself a cash flow advantage.
Perhaps you’ll find that you no longer need the same amount of physical space if you are comfortable with having workers telecommuting. That single example can lead to savings in electricity and other services that can boost your ability to cut expenses. Your goal is to run as lean an operation as possible but to do so without having your cuts impact your ability to provide the service that your clients expect and want.

2. Agility

Examine how the shifts that the pandemic has forced can be incorporated into your business in a more sustained way. Plenty of companies have shown tremendous flexibility and nimbleness in the way that they deliver their products or services, or even in the products themselves. Every business’ success is based on what the market needs, so business owners who can assess how the pandemic’s unique dynamics can be used to their advantage, or how they can adjust to them, will be the ones that are most successful and most likely to survive.

3. Competitive Inspiration
If you’re stuck for what to do to transform your business, there is absolutely nothing wrong with looking to your competition for inspiration. Perhaps they’ve moved their in-store shopping experience to one that is entirely available online, or they’re providing a new way to use an old product. Maybe they aren’t able to open but are remaining engaged with customers via webinars, podcasts, live sessions on Facebook, or Instagram. Whatever is working for one company, whether in your industry or not, can serve as inspiration for you.

4. Reflecting

How are you spending your time through the pandemic? Are you just worrying about how your business has suffered, or are there things that you’ve wanted to do for quite some time but have put off until you had a moment to spare?

Perhaps most importantly, it’s a good time to reflect on whether you’re actually enjoying yourself as much as you thought you would when you first started your own business, and whether the whole endeavor is actually worth it. Are you making the money you thought you would? Are you enjoying it as much as you thought you would? Has it provided the quality of life that you anticipated? Or would you be better off doing something else? It makes perfect sense to take this forced time off to reassess and either confirm or deny whether you should keep moving forward or turn to something else.

5. Planning

Take a longer view of your business than what is demanded by the immediate moment. There are some businesses that will be able to return to normal, but that is not true of all of them, and taking a clear-eyed look at how consumers are going to look at spending money with your type of business in the future is time well spent. If your business is essentially dependent upon having lots of people gathered in a small space, then you have to think beyond getting back to work and, instead, spend time thinking about the changes you’re going to have to make to allow yourself to stay in business. You may fail to do this, but you’re likely to find that your competition hasn’t, and that will not only put them one step ahead of you but may leave you selling in a way that your customers are no longer willing to engage with.

6. Learning
If your business operations have slowed or come to a stop as a result of the pandemic, one of the smartest things you can do is to use the time to expand your knowledge and education. There are seemingly limitless courses that you can take online – both free and fee-based – as well as books you can read to make sure that you have sharpened your abilities and expanded your knowledge of your business and industry.
The social distancing that has been required by both the government and the medical authorities gives you the opportunity to boost your abilities and expertise, whether by reading about your own industry or by taking cues from successful people in other industries. You can find inspiration from innovators and great thinkers both current and classical. There is a lot more to be gained from the downtime offered by the pandemic than thinking about your inventory and your clients. Use the time to improve yourself and it will provide a broad advantage within this business and those you may be involved with in the future.

7. Taking Care

Perhaps most important of all, stay healthy and stay positive. If you have extra time that you would have been spending on your business, take the time to make sure that you are taking care of yourself, the people you love, and the people in your community. We are living through history, and at some point, in the future, you are going to look back and assess how you spent your time in lockdown. Whether it’s in reference to your business or your personal life, work towards a resilient response that you can be proud of and that hopefully will advance your business beyond this temporary setback.

If you have additional questions about how to keep your business going during COVID-19, feel free to contact our office.