You are invited to join an upcoming webinar on this important and timely topic. The panelists will explore tried-and-true ways to pass wealth during life and at death that protect not only your family but also your wealth through the use of trusts. Among other advantages, trusts serve to cut off future creditors and prevent the commingling of separate property with community property. This presentation will also explore potential planning techniques that taxpayers may wish to consider and ways to address the uncertainties of today’s planning environment and mitigate the impact of legislative proposals that could change the legal landscape in the months and years to come. Learn more about each of our panelists below.

Click here to register and submit questions.

BKM Sowan Horan is registered with the Texas State Board of Public Accountancy as a sponsor of continuing professional education. We are currently not a NASBA registered CPE sponsor. As a result, we will be offering CPE for this webinar to Texas CPAs only. Eligibility for CPE will be determined upon registration, and certificates will be issued following the webinar.

Panelist: Tim Horan, Partner, BKM Sowan Horan, LLP

Tim has more than 35 years of experience in public accounting, equipping him to deal effectively on behalf of his clients on issues related to federal and state income tax planning and compliance. Through cost segregation studies, research and development tax credit studies, state income tax nexus studies, acquisition planning, and other tax strategies, Tim has worked closely and collaboratively with clients on tax minimization.

His areas of concentration also include tax controversy, international taxation, transfer pricing, and mergers and acquisitions. His industry experience encompasses professional services, staffing, restaurant and hospitality, real estate, energy, manufacturing, and distribution.

 

Panelist: Brad Marckx, Partner, BKM Sowan Horan, LLP

Brad started his career approximately 25 years ago, working as a revenue agent with the Internal Revenue Service (IRS). The background with the IRS and a Masters Degree in Taxation (MT) from the University of Denver provides a solid foundation in helping businesses, both private and public. Brad’s areas of concentration include federal and state tax planning and compliance, ASC 740, Accounting for income taxes (including documentation of uncertain positions), entity choice, and strategic plans and forecasts.

Brad’s clients benefit from tax strategies that work with the short and long-range business objectives. Listening to individuals and management teams’ objectives and educating them on the tax options provides a collaborative approach. This may include state nexus, mergers, and acquisitions, or other complex situations.

 

Panelist: Anthony Daddino, Managing Partner, Meadows Collier, LLC

Anthony P. Daddino, P.C. is the Managing Partner of the firm. Anthony devotes his practice to handling complex, and often times delicate, tax issues that successful businesses and their owners face.  For nearly two decades, he has counseled clients on income and estate tax issues both in the planning stage (before contact by the Internal Revenue Service) as well as in the controversy stage (after IRS contact).

On planning matters, Anthony commonly works with business entrepreneurs and their families on wealth preservation and transfer strategies. His work focuses on structuring their business and personal financial affairs in a way that accomplishes global wealth preservation goals and that is efficient from both an income and estate and gift tax perspective.

 

Panelist: Jana Simons, Associate, Meadows Collier, LLC

Jana draws from a vast breadth of experience in her law practice. Before joining the firm, she managed a large horse ranch and cultivated successful real estate and insurance practices. Jana’s business-focused background allows her to understand her clients’ concerns and employ a practical approach to tax, estate, and business planning issues.

She holds an LL.M. in Taxation from Georgetown University Law Center with an academic concentration in Estate Planning. During her time at Georgetown, Jana served as an extern for the United States Department of Justice, Tax Division. While working on her J.D., Jana completed her Master’s degree in Personal Financial Planning, represented pro bono clients in tax controversy matters with the IRS, served as a Peer Financial Counselor, and clerked for the Honorable Robert L. Jones, United States Bankruptcy Court, Northern District of Texas.

 

Under the American Rescue Plan (ARP), employers are entitled to tax credits for providing paid leave to employees who take time off related to COVID-19 vaccinations. The time off is expanding the sick and family leave credits under the Families First Coronavirus Response Act (FFCRA). The FFCRA required employers with fewer than 500 employees to provide up to 80 hours of sick leave for COVID-19 related illnesses and 10 weeks of paid family leave to employees for caring for a family member due to concerns related to COVID-19 and for caring for a child if the child’s school or place of care has been closed, or the childcare provider is unavailable due to COVID-19 precautions.

The requirement to provide such sick or family leave expired on December 31, 2020. Still, if the employer voluntarily pays the employee for the COVID-19 related sick or family leave, including vaccinations, they can claim those credits through September 30, 2021. It should be noted that wages for which an employer claims the credits for sick and family leave should be excluded from wages used for Payroll Protection Plan loan forgiveness.

The Small Business Administration (SBA) released a sample application for Restaurant Revitalization Fund (RRF) grants, as well as an RRF program guide. The sample application and program guide are available on the RRF landing page in the Supplemental Documents section. At this time, the opening date for grant applications has not been finalized, but applicants can proactively gather the information and documents needed for the application by reviewing the sample.

The Shuttered Venues Operators Grant portal, which was originally opened on April 8^th but experienced technical difficulties and was subsequently closed, opened again on Monday, April 26th. The applications will be processed under the following priority schedule:

The Latest Federal Relief Doubles The ERC

Did you know the ERC can now be worth up to $33,000 per employee – $5,000 in 2020 and $28,000 in 2021? Last week, President Biden signed into law the American Rescue Plan Act, which extends the Employee Retention Credit (ERC) through December 31, 2021. You may qualify for some or all of these credits:

·     If your business experienced a decline in gross receipts during 2020 or 2021

·     Or if it was fully or partially suspended due to a COVID-19 governmental order.

As previously reported on our COVID-19 resource page, you may still qualify for the ERC even if you received or will receive a PPP loan under the CARES Act.

Details You Need To Know

Meant to help offset the financial disruption caused by the pandemic, The Employee Retention Credit (ERC) under the CARES Act encouraged businesses to keep employees on their payroll. Under the Consolidation Appropriations Act, 2021, the ERC was substantially modified and extended to June 30, 2021. It’s important that you note that if you do the math, the potential credits are up to $19,000 per Employee.

Here are the highlights of what changed:

 

 

 

 

 

 

 

 

 

 

The IRS has posted FAQs on their website about the Employee Retention Credit. While these FAQs have not been updated for the modified and extended credit, they still contain valuable information to help businesses determine if they are eligible to take the credit. Below we will walk you through some of the basics.

Are you a qualifying employer?

• Was your business affected by a full or partial suspension of operations due to a government order?
• Did your business experience a significant decline in gross receipts during the calendar quarter?

When are you considered to have a full or partial suspension of operations due to a government order?  

If a business had to limit commerce, travel, or group meetings due to orders imposing restrictions from an appropriate government authority due to COVID-19 and these orders caused more than a nominal portion of a business’s operations to be suspended or partially suspended.

Governmental orders include:

• An order from the city’s mayor stating that all non-essential businesses must close for a specified period;
• A State’s emergency proclamation that residents must shelter in place for a specified period, other than residents who are employed by an essential business and who may travel to and work at the workplace location;
• An order from a local official imposing a curfew on residents that impacts the operating hours of a trade or business for a specified period;
• An order from a local health department mandating a workplace closure for cleaning and disinfecting.

The following situations would not qualify as a partial suspension of business operations:

• Voluntarily closing or reducing business hours
• Following a recommendation by a local authority to close or reduce hours
• Experiencing a reduction of customers/foot traffic while remaining open
• Ability to telework/perform comparable operations remotely

There are a lot of examples listed in the IRS FAQ section. However, it will depend upon the facts and circumstances whether or not a governmental order had more than a negligible effect on a business’s operations.

If a business cannot claim a partial or full suspension – then the gross receipts test should be considered.

When is a business considered to have experienced a significant decline in gross receipts during the calendar quarter?

A significant decline in gross receipts begins with the first calendar quarter in 2020, in which an employer’s gross receipts are less than 50 percent of its gross receipts for the same calendar quarter in 2019. The significant decline in gross receipts ends with the first calendar quarter that follows the first calendar quarter in which the employer’s 2020 quarterly gross receipts are greater than 80 percent of its gross receipts for the same calendar quarter in 2019, or with the first calendar quarter of 2021.

Gross receipts will be income from any source derived and will not include PPP receipts and follow the taxpayer’s tax method of accounting.

An example of a business eligible to claim employee retention credit on qualifying wages in Q2 through Q4 of 2020, as well as Q1 of 2021.

 

 

 

 

 

 

 

 

* Gross receipts are greater than 80% of comparable quarter gross receipts for 2019, however, the business is still able to take credit as allowed for the quarter following a business’s increase to greater than 80% of comparable quarter gross receipts.

What are Qualifying Wages?

The first step in considering qualified wages is determining if the business is a small or large employer for the applicable period. A small employer with 100 or fewer employees for 2020 OR 500 or fewer employees for the first half of 2021 would be able to consider all wages paid to employees, including qualified health plan expenses that are properly allocable to the wages.  A large employer would only be able to consider non-service wages during the period of suspension or a significant decline in receipts. Non-service wages are wages paid to employees who are not working during the applicable period.

What about wages paid to owner-employees and spouse? – these wages would qualify. However, there are prohibitions on including wages paid to children, parents, other relatives.

Next steps:

• Do you need assistance amending any of your 2020 Form 941s?
• Do you need assistance preparing Form 7200, Advance Payment of Employer Credits for 2021?
• Are there other planning considerations for 2021 if you qualify for both PPP and ERC? Whether or not your business has filed the PPP loan forgiveness application, we can help with a strategy to maximize the ERC by minimizing the wages needed for loan forgiveness.

Time is of the essence claiming the ERC. Please contact your BKM Sowan Horan team member if you require assistance determining your business’ eligibility, identifying qualifying wages, or have any questions about taking the ERC credit.