Guidance on Safe Harbor Rev. Proc. 2020-51

On Wednesday, November 18, Revenue Procedure 2020-51 was released by the IRS. This revenue procedure details a safe harbor for certain taxpayers who have utilized PPP loans during this tax period. Since there are a few ways that this can play a factor come tax time, we’ve summarized the revenue procedure to provide some guidance going forward.   Background In October, we provided guidance on IRS Notice 2020-32 and its implications to the Paycheck Protection Program (PPP). Check out that post here. It will provide some context and catch you up to speed on the IRS stance when it comes to claiming expenses incurred or paid with PPP funds. It also details the types of expenses referenced going forward. The Purpose … Read More

Biotechnology and the R&D tax credit

There are many industries that qualify for the R&D tax credit as outlined in the Internal Revenue Code Section 41. One industry in particular is the biotechnology industry. There has been a lot of discussion pertaining to this industry this year and throughout this post, we will be breaking down how certain biotech projects and innovations qualify for the credit. The Four-Part Test Qualification for any industry begins with the Four-Part Test and the biotech industry is no different. This test outlines the criteria a potentially qualified activity must meet to be deemed as R&D. Qualified activities include:  Examples of Qualified Biotech Activities This year has shown us that technology can be very useful to the healthcare industry.  From telehealth … Read More

Guidance on IRS Notice 2020-32

From Notice 2020-32: “This notice clarifies that no deduction is allowed under the Internal Revenue Code (Code) for an expense that is otherwise deductible if the payment of the expense results in forgiveness of a covered loan pursuant to section 1106(b) of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Public Law 116-136, 134 Stat. 281, 286-93 (March 27, 2020) and the income associated with the forgiveness is excluded from gross income for purposes of the Code pursuant to section 1106(i) of the CARES Act.” When the Payroll Protection Program was put into place a few months ago, there were some gray areas in regards to deducting expenses paid for my PPP loans. The IRS released Notice 2020-32 … Read More

Additional Guidance on Trump’s Payroll Tax Deferral

Additional Guidance on Trump’s Payroll Tax Deferral Program The IRS has released some bad news for anyone who is deferring payroll taxes under President Trump’s executive order… A few weeks ago we detailed the available facts of Trump’s payroll tax executive order. We now have guidance from the IRS and are a few days into the program. If you have decided to opt into deferring payroll taxes for your company, we have some information for you! The Good News and Bad News According to the guidance by the IRS, payroll taxes that have been deferred for the remainder of the year will need to be paid back by April 30th, 2021 to avoid interest, penalties, and additions to tax that … Read More

Implications of Trump’s Payroll Tax Delay

On Saturday, August 8th, 2020, President Trump signed four executive orders including a directive to defer collections on Social Security payroll tax for workers making less than $104,000 annually. This executive order comes in the midst of Congress strategizing on an additional pandemic relief plan. Workers usually pay 6.2% of their wages up to $137,000 annually to fund Social Security. The executive order would halt this withholding starting September 1st through the end of the year in order to increase take home pay and encourage spending. It will not apply to the unemployed or those who work as contractors. The IRS and Treasury department are in charge of ironing out the details and developing a plan to implement this directive. … Read More

2019 Tax Refund Delays – What You Should Know

Earlier this year the IRS extended the April 15th tax deadline to July 15th, 2020 because of the COVID-19 pandemic. Hopefully, you have either filed your return or filed an extension. With the filing deadline behind us, one thing on the minds of several taxpayers is their refund status. There are a few reasons why your refund may take longer than usual. The IRS closed their offices back in March due to the pandemic and were put in charge to distribute stimulus checks back in April with a limited staff. In June, the IRS was able to reopen under limited capacity. Outside of this pandemic, 90% of returns will receive their refund within 21 days of filing. This could still … Read More

Key Facts on the Proposed CHIPS Act

First, what is CHIPS? The CHIPS Act stands for Creating Helpful Incentives to Produce Semiconductors for America. This proposed refundable investment tax credit encourages domestic semiconductor manufacturing and has already gained bipartisan support.  Who are the key players?  Senator John Cornyn, a senior member of the Senate Finance Committee, heads a group of bipartisan lawmakers from the House and Senate in the pursuit of this refundable credit. There have been discussion within Congress to include the CHIPS Act in pandemic response legislation.  What are the potential benefits?  What does this mean for Chipmakers? It’s great news! Chipmakers will have support in 5G wireless network pursuits as well as the ability to stay competitive within the global technology landscape. We will … Read More

PPP Flexibility Act Approved by the Senate

We hope you have been safe and healthy during this extended tax season! This week, the PPP Flexibility Act (PPPFA) of 2020 was passed by the Senate and now moves on to be signed by the President. The PPPFA will help many small businesses that received loans via the Paycheck Protection Program and protect payrolls without costing extra taxpayer dollars. Two big changes related to loan forgiveness:

Happy Tax Day – Kinda

Today is traditionally the tax deadline for most Americans. But given the current pandemic, the government quickly rolled out the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that included many changes to our tax system. One of the main changes is the automatic extension to file your 2019 tax return (you don’t need to do anything). The deadline for tax year 2019 (to file and pay your taxes) is July 15th, 2020. You can still file an extension (Form 4868) by July 15th, 2020 to extend your filing out to October 15th, 2020. Remember though, if you expect to owe taxes for 2019 and you extend your filing out to October, you still need to make a good … Read More

Coronavirus (COVID-19) and its Impact to Taxes

[Update 3/17/2020] Treasury Secretary Steven Mnuchin said on Tuesday (3/17/2020) that taxpayers can delay paying their income taxes on as much as $1 million in taxes owed for up to 90 days. This postponement applies to federal returns. Please check your state’s tax deadlines for any delays with state filings. On Friday, March 13th, 2020, President Trump declared the spread of COVID-19 (commonly referred to as the Coronavirus) a national emergency. While this declaration has far reaching implications across many industries and sectors, there are also tax implications. The IRS has setup a webpage for taxpayers to keep up to date on how the Coronavirus will impact your taxes: We here at Tax Credit Hero wish you health and … Read More