The U.S. Senate voted last night to pass the 5-week extension for the Paycheck Protection Program. The President is expected to sign the extension shortly. This measure will extend the application deadline until August 8th. The SBA had stopped accepting applications as of midnight June 30th. The move will allow more time for small businesses to apply for the estimated $129 billion in PPP funding remaining.
We will continue to provide additional details as they are made available.
IRS Rules Encourage Leave-Based Donation Programs for Victims of COVID-19
The IRS has provided relief to support employer leave-based donation programs to aid victims of the COVID-19 (coronavirus) pandemic. Under these programs, employees may forgo vacation, sick or personal leave in exchange for cash payments the employer makes to charitable organizations providing relief for the victims of the pandemic.
An employer’s donations under a leave-based donation program are not gross income or wages for the employees who surrendered leave so long as the donations are made in cash to a charitable organization for the relief for victims of the COVID-19 pandemic, before January 1, 2021. Similarly, the employee does not receive income or wages from the opportunity to forgo leave. Thus, the employer does not have to report its leave-based donations on the employee’s Form W-2.
An employee may not claim a charitable contribution deduction for the value of leave that is surrendered in a leave-based donation program and excluded from the employee’s wages. However, the employer can deduct its cash payments as a charitable contribution under Code Sec. 170 or as a ordinary and necessary business expense under Code Sec. 162 if the employer otherwise meets the respective requirements.
Massachusetts—Sales and Use Tax: Extension of Sales and Meals Tax Relief for Certain Taxpayers Due to COVID-19
Massachusetts has extended the tax relief provided for certain sales, use and meals taxpayers due to COVID-19.
Tax Relief Provided
All penalties and interest due for returns and payments due during the period beginning March 20, 2020, and ending August 31, 2020, will be suspended. The returns and payments, including any local option amounts, are due on September 20, 2020.
Small Business Requirement
The relief only applies to businesses that paid less than $150,000 in sales, use, and/or meal taxes in the year ending February 29, 2020.
Taxpayers Excluded from Sales, Use, and Meals Tax Collection Extensions
The COVID-19 tax relief extending due dates do not apply to:
- marijuana retailers;
- marketplace facilitators; or
- vendors selling motor vehicles.