Tax Warrior Chronicles

IRS Expands the Definition of Coronavirus-Related Distributions

Posted on Wed, Jul 22, 2020

The Treasury Department offered easier access to retirement savings in March 2020 as the economic hardships resulting from the COVID-19 pandemic became a forgone conclusion.  Three months later, The IRS has expanded eligibility for coronavirus related distributions and provided further insight into how these new rules should be applied in Notice 2020-50.

 

Certain provisions in the CARES Act were enacted to reduce the tax burden on withdrawals from certain qualified retirement plans. If a withdrawal is considered a “coronavirus-related” distribution, the CARES Act extended the time to pay the resulting taxes or to recontribute the distributions back to the qualified plan, while widening

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IRS Grants Extensive Relief to 2020 RMD Recipients

Posted on Mon, Jun 29, 2020

If you received a Required Minimum Distribution (RMD) in 2020, you should take careful note of guidance contained in the recently issued IRS Notice 2020-51 regarding the CARES Act’s waiver of 2020 RMDs and a taxpayer’s ability to rollover such distributions.

 

Prior to the CARES Act, distributions eligible to be rolled over to a retirement plan (including an IRA) within 60 days from the date of receipt, excluded:

  • Required Minimum Distributions (RMDs),
  • Distributions that were part of a series of substantially equal period payments made over a specified period, and
  • Distributions made on account of a hardship experienced by an employee.

Other exclusions form eligible distributions for the

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PPP Update #14 – You Can Apply for Forgiveness Early, but Buyer Beware

Posted on Thu, Jun 25, 2020

As guidance in this area is being released regularly, we recommend you read all of our blogs on this subject.  All the blogs in the Paycheck Protection Program series are here: Updates #1, #2#3#4#5#6#7#8#9#10, #11, #12, #13, #14

 

The Treasury continues to rewrite guidance based upon the changes passed within the Paycheck Protection Program Flexibility Act (PPPFA). Overnight on Monday, June 22, the Treasury released the 20th Interim Final Rule (IFR). There are no surprises on what to expect with the 20th IFR: some clarifications, a few new things, and you guessed it, more unanswered questions. Today, we will focus on a significant new item and some of the clarifications.

 

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PPP Update #13 – Revised Forgiveness Guidance: New IFRs and Applications

Posted on Thu, Jun 18, 2020

As guidance in this area is being released regularly, we recommend you read all of our blogs on this subject.  All the blogs in the Paycheck Protection Program series are here: Updates #1, #2#3#4#5#6#7#8#9#10, #11, #12, #13, #14

 

Since our last blog, the Treasury issued two additional Interim Final Rules (the 18th and 19th), revised the original loan forgiveness application for changes made by the Paycheck Protection Flexibility Act (PPFA), and issued a new EZ loan forgiveness application. If you are up to date with our blogs, we are starting to compare the Paycheck Protection Program (PPP) to extra-innings in the longest baseball game ever recorded. It is now inning 19,

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PPP Update #12 – Revised Guidance for PPP Forgiveness Begins; More Expected to Follow

Posted on Thu, Jun 11, 2020

As guidance in this area is being released regularly, we recommend you read all of our blogs on this subject.  All the blogs in the Paycheck Protection Program series are here: Updates #1, #2#3#4#5#6#7#8#9#10, #11, #12, #13, #14

 

The Paycheck Protection Program (PPP) could be compared to the longest baseball game in history (we really miss sports, humor us here).  That Triple-A International League game ended with a 3-2 score, lasted 33 innings, and clocked 8 hours and 25 minutes of playing time.  As we enter the twelfth inning on this subject, complete and clear guidance remains wanting.  Last at bat we discussed the passage of the Paycheck Protection Program Flexibility

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IRS Grants Broad COVID-19 Relief to Qualified Opportunity Funds and Their Investors

Posted on Tue, Jun 09, 2020

Late last week, the IRS released Notice 2020-39 providing relief for Qualified Opportunity Funds (QOFs) and their investors in response to COVID-19, and updated the Qualified Opportunity Zones frequently asked questions on its website to reflect the recent changes.  With the June 30th investment standard testing date fast approaching for many QOFs, this presents welcome relief and flexibility to QOFs and their investors.

 

It is worth noting that none of the relief provisions under Notice 2020-39 require QOFs or their investors to certify they have been adversely impacted by the virus.  In addition, the relief provisions do not require any filing or formal extension request and will

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PPP Update #10 - Potential Changes & Forgiveness Regulations

Posted on Tue, May 26, 2020

As guidance in this area is being released regularly, we recommend you read all of our blogs on this subject.  All the blogs in the Paycheck Protection Program series are here: Updates #1, #2#3#4#5#6#7, #8, #9, #10, #11, #12, #13, #14

 

Treasury kicked off the holiday weekend on Friday, May 22, by releasing its 14th Interim Final Rule (IFR) addressing loan forgiveness for the Paycheck Protection Program (PPP) loans.  This new IFR clarified certain issues while leaving others outstanding.  Today’s blog will focus on the clarifications so borrowers, many nearing the end of their 8-week Covered Period, can make decisions around what is known.  Additionally, we will discuss the

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529 Plans & COVID-19 Tuition Refunds - 60 Days to Act

Posted on Fri, May 15, 2020

There have been many adjustments to society due to the coronavirus; the largest, of course, being the extended stay-at-home order. With fears of the virus spreading, schools have quickly switched to online learning and closed campus dorms. Many students who paid for room and board have or will receive partial refunds from their learning institutions, possibly leading to an unexpected tax bill.  If a student, or their parents, used a 529 plan withdrawal to pay for qualified education costs and then received a refund from the educational institution it is important to take action within 60 days of receiving the refund. Here’s why…

 

What should account owners do?  

Option One

To avoid an

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PPP Update #8 – What if I Can’t Rehire My Employees? Should I Keep My PPP Money? Can I Get More PPP Money?

Posted on Thu, May 14, 2020

As guidance in this area is being released regularly, we recommend you read all of our blogs on this subject.  All the blogs in the Paycheck Protection Program series are here: Updates #1, #2#3#4#5#6#7#8#9#10,  #11, #12, #13, #14

 

What if I Can’t Hire My Employees Back?

Given the generous unemployment provisions of the CARES Act, many businesses that obtained PPP loans are having difficulty rehiring employees that may now be collecting more on unemployment than their normal wages.  This puts PPP loan recipients in a precarious position, as a business must maintain its workforce through the eight-week, post-loan period to receive full PPP forgiveness.

 

Fortunately, FAQ #40

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IRS Allowing Mid-year Changes to Health and Dependent Care Plan Elections

Posted on Wed, May 13, 2020

COVID-19 has led to changes in many employees’ circumstances, from changes in a spouse’s employment and benefits eligibility to significant changes in medical or dependent care expenses. These changes in circumstances mean that many employees may need additional flexibility in their Section 125 Cafeteria Plans.  Various employers have indicated a willingness to offer employees such flexibility and the IRS has responded favorably by recently issuing Notice 2020-29.

 

Below are the highlights of Notice 2020-29

 

Employer Sponsored Health Coverage

  • Section 125 Plans may now allow for the following mid-year changes to employer sponsored health coverage:
    • Make a new election on a prospective
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