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The deadline for 2020 Individual income tax returns is rapidly approaching on May 17, 2021.  We are working to meet this deadline for as many clients as possible.  If we are waiting for info from you, please get that in as soon as possible so that we may finish your return. 

We are told that the Governor has the PPP Loan legislation, AB 80, on his desk to sign this week.  We will keep you posted on that progress.

Restaurant Revitalization Grants -
Apply starting May 3

The SBA will allow potential applicants to register and open up accounts to apply for revitalization grants starting April 30, 2021, at 9:00 a.m. EDT. Actual applications may be submitted starting Monday May 3, 2021, at noon EDT. The online application will remain open to any eligible establishment until all of the $25 billion of available funds is exhausted.

For the first 21 days that the program is open, the SBA will prioritize funding applications from businesses owned and controlled by women, veterans, and socially and economically disadvantaged individuals. However, all eligible applicants should submit applications as soon as the online application portal opens. Following the 21 days, all eligible applications will be funded on a first-come, first-served basis.

Additional information is available at:

www.sba.gov/article/2021/apr/27/sba-administrator-guzman-announces-application-opening-286-billion-restaurant-revitalization-fund

Looking for sources of
Covid Relief Assistance?

USA Today recently had an article that provides information about covid relief assistance programs for small businesses.  Click here to read it.

Child Tax Credit Changes

The Child Tax Credit is increased from $2,000 to $3,000 per child and made fully refundable for the 2021 tax year only ($3,600 for a child under age 6). The American Rescue Plan Act also allows for advance payments of the credit starting as early as July 2021.  The Department of the Treasury has been directed to issue at least 50% of the credit owed to taxpayers in advance monthly payments.  The logistics for these advanced payments are to be worked out by the IRS.  The IRS will be required to establish an online portal for taxpayers to elect not to receive advanced payments and report information that would change their advance amounts.  The IRS must also provide taxpayers with a notice that includes the amounts paid during 2021. 

Our experience has been that these kinds of prepayments tend to create a lot of chaos for clients and hassles for confirming amounts received.  We strongly encourage clients to opt out of the prepayments if they are not needed in advance.  After seeing how things went with the Economic Stimulus Payments last year, our concern is that it will be very difficult to confirm the actual amounts received.  A lot of time and energy will be spent trying to figure the correct amount to report on the return, only to receive correspondence from the IRS that their records do not agree.

CalSavers Program

By June 30, 2021, businesses with 50+ employees in California must provide a retirement plan (those with 5+ employees are next). If you already offer a retirement plan, you need to login to CalSavers and opt out of the program.  For more information about this program, read on.

The CalSavers program is a state-administered Roth-like retirement plan that is available to California employees who are working for businesses that don’t offer a retirement plan. Registered employers will provide CalSavers with a list of their employees, and CalSavers will communicate program information directly to employees and will answer any questions an employee may have. No enrollment/program questions should be answered by the employer. 

Employers who already offer a retirement plan do not have to participate in the program but must go on the CalSavers program website and register as “exempt.” Nonprofit organizations are treated like other businesses and must register with CalSavers (if not exempt), but religious organizations are exempt from the registration requirements.

The employee thresholds are based on the average number of employees for the prior year. So for 2021, you will look at the business’s average number of employees (based on the quarterly DE 9C reports filed with the EDD) for 2020. New businesses will not have to register for at least a full year prior to being subject to the registration requirements.  Even if all employees choose to opt out of the program, the employer must still register if they meet the employee threshold.

The CalSavers program will notify employers via letter of their requirement to register in the program. Employers will be provided an access code in their notification letter. They then go to the following website to register:  https://employer.calsavers.com/  The employer can ask for their access code on the website if they didn’t receive their notification or have lost the code.
 

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