After the new COVID-19 relief bill was signed into law on December 27, 2020, $284.5 billion became available to the second installment of the Paycheck Protection Program (PPP2) loans. $35 billion has been set aside specifically for those who are applying for a PPP loan for the first time, and another $15 billion has been reserved especially for community financial institutions (CFIs). First and second-time borrowers will be able to qualify for PPP2 funds.
California Passes Proposition 19
Proposition 19 was recently passed in California and will affect properties that you want to pass down to your children. It is important to know that Prop 19 will only affect the property taxes and reassessments of the property; it will not take away the step up in basis for inherited properties or impact capital gains taxes.
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Year-end Tax Planning
With the year coming to a close, now is an important time to be thinking about ways to save on taxes for 2020 and possibly 2021. Year-end tax planning and projections are especially valuable this year as new guidance was released on the Tax Cuts and Jobs Act (TCJA) as well as the Families First Coronavirus Response Act and the Coronavirus Aide, Relief and Economic Security (CARES) Act having an effect on the TCJA.
New Text Phishing Scam
The Security Summit (a partnership of the IRS, private sector, and state tax agencies) has released a warning to taxpayers about a new COVID-related scam that deceives people into providing their bank information. The scam is generated by a text message claiming the person has received the $1,200 Economic Impact Payment (EIP). This is the text message that has been used: “You have received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further action is required to accept this payment into your account. Continue here to accept this payment.” A phishing web address follows this text.
New PPP Loan Forgiveness Application for Loans $50,000 or Less
The Department of Treasury introduced a new, easier loan forgiveness application on October 8, 2020 for companies that have received PPP loans of $50,000 or less. No calculations for loan forgiveness are needed as borrowers won’t be subject to FTE or wage reductions. Borrowers should still keep all relevant records of payroll and qualified expenses in case they are requested by the SBA or an audit happens in the future.