All current information and resources pertaining to the Coronavirus/COVID-19
This afternoon, Congress released the text of its $900 billion pandemic relief bill. With over 5,500 pages, there’s a lot we still need to review. However, a few key provisions impacting small businesses and the profession are immediately apparent.
One big success?
PPP loan-related expenses will be deductible. Get details on this, as well as other highlights of the legislation, in this late-breaking video. AICPA CEO and President Barry Melancon, CPA, CGMA and CPA.com CEO and President Erik Asgeirsson discuss what the bills says on:
- Deductibility of PPP loan-related expenses.
- Requirements for PPP2 loans and how CPAs can use the CPA Business Funding Portal to prepare.
- Relief for hotels and restaurants.
- 501(c)(6) organizations.
- Simplified forgiveness for loans under a certain threshold.
- When we can expect guidance from the Small Business Administration
Application opening date: noon on Monday, December 7
Application closing date: noon on Friday, December 18
The Small Business CARES Relief Grant Program was created by the State of New Mexico in the November 2020 Special Session to provide $100 million in grant funding to New Mexico small businesses, including for-profit entities and nonprofit organizations, that are experiencing financial hardship due to the pandemic.
The grant guidelines, application information, FAQs, and helpful resources are available on the NMFA website here. We encourage you to review the website to learn more about the process and find answers to your questions. Additional information will be added, so please check back for updates.
If you haven't found the information you need on the NMFA website, you may call NMFA at (505) 992-9696 or email CARES@nmfa.net. Please note: Due to the current volume of calls and emails, we may not be able to respond as quickly as we'd like. We appreciate your patience.
Tax practitioners who use two CCH return preparation products reported problems with corrupted files and an inability to e-file returns on Sept. 15, resulting in tax returns that were not filed on time. Due to technical problems with CCH’s e-filing system, users were unable to get their returns into the e-file queue for much of the day on Sept. 15. In addition, some practitioners report that when they opened previously saved returns to file them, in many cases the returns were corrupted.
SANTA FE – New Mexico personal and corporate income tax returns for 2019 must be filed by July 15 to avoid penalties under a law enacted during the recent special legislative session.
Gov. Michelle Lujan Grisham recently signed into law a bill that waives penalties and interest on late payments in a variety of tax programs, including income taxes, to provide relief to individuals and businesses under financial strain due to the COVID-19 pandemic. While payments may be delayed under the law, tax returns still must be filed timely in order to avoid penalties.
A short blog post by Barry Melancon, CPA, CGMA about issues surrounding an entity’s decision on whether or not to return PPP funds.
IRS Notice 2020-32, issued April 30, states that a taxpayer that receives a loan through the PPP can’t deduct expenses that are normally deductible, if those expenses were reimbursed by a PPP loan that was subsequently forgiven.
Recent Email Updates
The following is from the Tax Information and Policy Office and was sent out from Taxation & Revenue Department Secretary Stephanie Schardin-Clarke:
We have received an inquiry about individuals requesting extensions now that the July 15, 2020 postponed date is so close. They are curious if they qualify for the tax waiver of penalty and interest from this legislative special sessions house bill 6. We have also been able to update the Spanish version of B-100.35 -Tax Relief for COVID-19 (Extension) - Spanish Version. You can locate the updated document in the banner here: http://www.tax.newmexico.gov/ or on our website here: http://www.tax.newmexico.gov/forms-publications.aspx in the Publications/Bulletins/100 Series-General Information folder.
On Wednesday evening, the Senate passed the House bill, Paycheck Protection Program Flexibility Act of 2020, creating more flexibility for PPP loan recipients to spend the funds and still qualify for forgiveness of the loans. Under the bill, borrowers can choose to extend the eight-week period to use the PPP funds to 24 weeks. The bill also revises the June 30 deadline for spending the PPP funds to Dec. 31 to accommodate the new 24-week window. Additionally, the bill changes the ratio for payroll to other fixed costs, raising the non-payroll portion of a forgivable covered loan amount from 25% up to 40%. The Senate approval sends the House bill to President Donald Trump, who is expected to sign it.
Working with the Treasury Department, the Internal Revenue Service today unveiled the new Get My Payment with features to let taxpayers check on their Economic Impact Payment date and update direct deposit information.
The IRS just released Notice 2020-23 to extend more tax deadlines for individuals and businesses. The relief covers taxpayers that have a filing or payment deadline between April 1 and July 15, 2020. It applies to fiscal year entities, estate tax returns, nonprofit organizations, information returns and more. In addition, the deadline for second quarter estimated tax payments has been moved from June 15 to July 15, and the relief is automatic so taxpayers don’t need to file any extension forms to get the relief. The NMSCPA has sent numerous requests urging Treasury Sec. Mnuchin to grant and expand tax-related relief to all types of returns and payments.
This morning, the New Mexico Taxation and Revenue Department (NMTRD) issued a press release stating that income tax extensions will not trigger interest charges. Please note that we do anticipate that NMTRD will release another bulletin, which will expand on this press release. Additionally, please note that the IRS has established a FAQs page, which may answer many questions you have related to tax filing and payment deadline extensions.
IRS unveils new People First Initiative; COVID-19 effort temporarily adjusts, suspends key compliance program
To help people facing the challenges of COVID-19 issues, the Internal Revenue Service announced today a sweeping series of steps to assist taxpayers by providing relief on a variety of issues ranging from easing payment guidelines to postponing compliance actions. More specifics about the implementation of these provisions will be shared soon. Highlights of the key actions in the IRS People First Initiative can be read here.
On Friday, we announced that the New Mexico Taxation & Revenue Department (NMTRD) was extending tax and filing deadlines. We wanted to remind members that the bulletin released does not, and the Secretary of NMTRD has not allowed an extension of GRT, Compensating Tax, Leased Vehicle Gross Receipts, Leased Vehicle Surcharge, nor Governmental Gross Receipts filing or payment deadlines. Because of this, February GRT returns are still due on March 25.
After today's stay-at-home order issued by Governor Michelle Lujan Grisham, "Professional services, such as legal or accounting services, but only where necessary to assist in compliance with legally mandated activities", were listed essential services. Per the order, "'Essential businesses' may remain open provided they minimize their operations and staff to the greatest extent possible. Further, all essential businesses shall, to the greatest extent possible, adhere to social distancing protocol and maintain at least six-foot social distancing from other individuals, avoid person-to-person contact, and direct employees to wash their hands frequently. Further, all essential businesses shall ensure that all surfaces are cleaned routinely."
The order takes effect Tuesday, March 24, at 8 am and runs until April 10.
Following the announcement by Treasury Secretary Steven Mnuchin stating that Tax Day would be moved from April 15 to July 15 and that all taxpayers and businesses will have this additional time to file and make payments without interest or penalties, the New Mexico Taxation and Revenue Department (TRD) has announced that New Mexico taxpayers qualify for extended return and payment deadlines due to the COVID-19 pandemic.
The extensions affect personal income tax, corporate income tax, and withholding tax. NMTRD has released Bulletin B-100.35-Tax Relief for COVID-19 detailing the extension.
IRS Issues Guidance on Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic
Excerpt from IRS Notice 2020-17: The Secretary has determined that any person with a Federal income tax payment due April 15, 2020, is affected by the COVID-19 emergency for purposes of the relief described in this section III (Affected Taxpayer). For an Affected Taxpayer, the due date for making Federal income tax payments due April 15, 2020, in an aggregate amount up to the Applicable Postponed Payment Amount, is postponed to July 15, 2020.
COVID-19 Deadline Info & Memos
There is an active conversation going on between members of NMTaxTalk about the effects of the crisis on how our colleagues are dealing with the effects on our practices. This is a great opportunity to learn about others' experiences and thoughts and contribute yours. You can request an invitation to join by sending us an email.
Other Resources & Information
The U.S. Small Business Administration (SBA), in consultation with Treasury, released guidance Tuesday answering 23 frequently asked questions regarding the forgiveness of Paycheck Protection Program loans.
The FAQs, published in a new 10-page document, are divided into four sections addressing different aspects of the process and calculations PPP borrowers should use to determine how much of their loan is forgivable. Following is a brief description of each section and highlights from the guidance provided.
WASHINGTON — With cyberthieves active during COVID-19, the Internal Revenue Service and the Security Summit partners today urged tax professionals to review critical security steps to ensure they are fully protecting client data whether working in the office or a remote location.
The U.S. Small Business Administration (SBA), in consultation with Treasury, released Wednesday a revised loan forgiveness application for the Paycheck Protection Program (PPP). The SBA also unveiled a new EZ application for forgiveness of PPP loans.
IRS News Releases
- News Release IR-2020-71: Protect taxpayers against identity and financial loss
- News Release IR-2020-72: Announces the availability of the new “Get My Payment” tool
- News Release IR-2020-73: Recipients of Supplemental Security Income (SSI) will automatically receive automatic Economic Impact
We know there is frustration around providing services to your small business clients as they apply for Paycheck Protection Program (PPP) loans being issued through the Small Business Administration (SBA). Many firms want to be recognized as an agent for the client and be compensated for their services under the agent fee section of the PPP guidance, but are concerned they will not receive payment from lenders.
Other Updated AICPA Resources on PPP
- Professional Ethics Executive Committee (PEEC) update: Impact of accepting PPP agent fees on independence
- AICPA recommendations for PPP lender documents
As you change business practices in response to COVID-19, it is critical that you take the time to review your data security practices. Whether you are working from home or in the office, ensure that your clients’ data is secure.
If you believe your data has been compromised, contact the New Mexico Taxation and Revenue Department at 1-866-457-6789 or by email at Tax.Fraud@state.nm.us to report your discovery.
The Small Business Administration (SBA), in consultation with the Department of the Treasury, intends to provide timely additional guidance to address borrower and lender questions concerning the implementation of the Paycheck Protection Program (PPP), established by section 1102 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act or the Act).
The Department of the Treasury (Treasury) announced on April 1 that Social Security beneficiaries who are not typically required to file tax returns will not need to file an abbreviated tax return to receive an economic impact payment. The IRS will use the information on the Form SSA-1099 to generate $1,200 economic impact payments to Social Security beneficiaries who did not file tax returns in 2018 or 2019.
SANTA FE – With COVID-19 cases still rising in New Mexico, Gov. Michelle Lujan Grisham on Monday extended her public health emergency order and announced the extension of related public health orders to encourage social distancing and preserve safety equipment for health care workers. Per the order, all guidance and advisories issued by the governor and secretary of health are in effect through at least April 30.
New Mexico small businesses in financial distress due to the coronavirus crisis are encouraged to apply as soon as possible for loans made available under the federal stimulus bill. The stimulus bill, or Cares Act, allocates $349 billion for loans to small businesses. But businesses have until only June 30 to access the money, and loans will be made on a first-come, first-serve basis.
AICPA’s PCPS team has created and updated tools for CPAs to use, in addition to PCPS members. These tools will help CPAs support small businesses (and CPA firms, too) as they work to secure funding through the Small Business Administration (SBA).
The PPP resources for CPAs include:
- Co-brandable PPP overview guides
- PPP payroll calculators (which will be updated each time more guidance is released)
- Statement on CPAs as agents
- Sample PPP application
- Other SBA resources to share with clients
NMTaxTalk Group Update Posts
- IRS: Canceling or Rescheduling a Prescheduled Payment
- Continuation of IRS: Canceling or Rescheduling a Prescheduled Payment
- Questions Answered on Prescheduled Payments
- IRS UPDATE for COVID-19 - Approval for Digital Signatures and Receive and Send Documents Electronically
In recognition of the financial difficulties facing many New Mexico residents and businesses during the COVID-19 pandemic, the Taxation and Revenue Department is temporarily modifying some of its enforcement activities.
This expanded list answers some of the open questions and provides more details on some previously answered questions.
NMTRD Bulletin: Tax Relief for COVID-19: Extension of Time to File and Pay New Mexico Taxes (Revised per IRS Notice 2020-18)
The New Mexico Taxation and Revenue Department (TRD) has announced that New Mexico taxpayers qualify for extended return and payment deadlines due to the Coronavirus Disease 2019 (COVID-19) pandemic (emergency declaration) by the Federal Government and the COVID-19 statewide public health emergency declaration (Executive Order 2020-004) by the Governor of New Mexico Michelle Lujan Grisham. These extensions affect personal income tax, fiduciary income tax, corporate income tax, and withholding tax.
Follow the above link for answers to frequently asked questions related to the relief provided in the Notice 2020-18. These questions and answers will be updated periodically and are designed to be a flexible tool to communicate information to taxpayers and tax professionals in this changing environment.
The Association, the global voice of the American Institute of CPAs and the Chartered Institute of Management Accountants, is taking the Coronavirus (COVID-19) very seriously. We are continually monitoring the virus’ impact on our members, staff, exam candidates, students and the profession.
As the novel coronavirus impacts our lives, how we work and the global economy, the A&A community is coming together to support our members and their clients during this time of uncertainty. In order to navigate this challenging environment, we are providing information on topics such as remote auditing, financial reporting considerations, and other industry-specific guidance.