LMC Updates Related to COVID-19

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IRS SAYS EXPENSES REIMBURSED BY FORGIVEN LOANS ARE NOT DEDUCTIBLE

 

Last month's Coronavirus Aid, Relief, and Economic Security (CARES) Act created government-guaranteed Paycheck Protection Program (PPP) loans for small businesses to help meet payroll costs, mortgages, rent, and utilities during the COVID-19 crisis. These loans may be forgiven if the proceeds are used to pay these business expenses between February 15, 2020 and June 30, 2020.

 

Although many taxpayers have already received or applied for these loans, detailed guidance regarding how the loan forgiveness process will work has been slow to appear. One question not addressed in the law itself was whether business expenses that are normally deductible for tax purposes (such as payroll costs and rent) remain deductible if the loan is later forgiven under the CARES Act.

 

This week, IRS Notice 2020-32 disappointed many taxpayers by denying these deductions. Since under the CARES Act the forgiveness is not considered taxable income, the IRS considers it a double benefit to allow a deduction for the underlying expenses. Therefore, they determined that taxpayers who have their PPP loans forgiven may not deduct any business or interest expenses related to the forgiven loan.

 

LM COHEN & COMPANY GIVES BACK TO NEW YORKERS IN NEED. WE INVITE YOU TO JOIN US 

 

In light of all the challenges that many people continue to face because of the COVID-19 pandemic, LM Cohen & Company (LMC) is giving back to help those who are less fortunate. During the current crisis, many New Yorkers are struggling for the most basic of necessities, like food.

 

Food Bank for New York City has been the city's major hunger-relief organization working to end hunger throughout the five boroughs for over 35 years. LMC is centered in the heart of New York, and the work that Food Bank does is so important for all New Yorkers. Donations to this organization will continue to help feed New York and allow us to be a vital part of New York's healing process, to overcome the current pandemic.

 

We invite you to join us in giving back to New York and help LMC make a difference. For every donation that is made through our Spring 2020 fundraiser, LMC will match each donation up to a total of $5,000, for a grand total donation to Food Bank of $10,000.  This size donation will help provide 50,000 meals to New Yorkers in need.

 

https://events-with-food-bank-nyc.everydayhero.com/us/lm-cohen-company-s-spring-matching-donation-program

 

More about the Food Bank:

 

Nearly one in five New Yorkers rely on Food Bank for food and other resources. Through its network of more than 1,000 soup kitchens, food pantries and charities, Food Bank provides food for more than 58 million free meals for New Yorkers in need. Food Bank For New York City distributes more than 4 million kosher meals per year.

 

During the current COVID-19 Pandemic, the need for Food in New York City and the surrounding boroughs, has become much more dire. The Food Bank's network of people they provide food for has increased by 50% since the current crisis began. They have taken steps to deploy new methods of food distribution to accommodate the current crisis. These methods include: Drive-Thru Pantry Bag Pick-ups, Seniors-Only Distribution Hours, and Home Deliveries. Pop-up food distributions are set-up citywide to provide emergency food, fresh produce, and household supplies for vulnerable families.

 

Throughout the current COVID-19 Pandemic, they are actively taking proactive steps to safely provide food and other resources, by providing emergency food to vulnerable New Yorkers who may be quarantined, along with those impacted by this economic downturn.

 

NEW YORK STATE EMPLOYERS - ACTION REQUIRED 

 

Required information to be sent to employees impacted by COVID-19

 

The New York State Department of Labor has asked us to relay the following information to all clients who employ personnel in New York State:

 

Immediate action required: In order to ensure that you are complying with your legal obligations, and to facilitate the timely processing of unemployment insurance benefits applications, the New York State Department of Labor is directing all New York State employers to provide the following information to each of your employees whose work schedule and/or employment status has been impacted as a result of COVID-19 related issues.

 

Employer Information

NYS Employer Registration No:

Federal Employer Identification No:

Employer Name:

Employer Address:

 

Please make sure that all relevant employees, including those who have already been impacted by COVID-19, are promptly provided this information. You may use Form IA 12.3 to provide this information to your employees.

 

During this crisis, your LMC professional is available if you have questions related to the latest updates on this topic.  All our prior Alerts are available on the Updates page of our website.

 

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