b'CODING Update ComplianceLEGAL NUTRITIONUpdateANJC NewsANJC Leadership ANJC News!The Coronavirus LEGAL EASE NUTRITION CARES Act: The Government Giveth and Taketh Away By Jeffrey RandolphANJC Legal Counsel to theessentially an advance on your 2020 taxANJC ScholarshipIn responsethe case. On the contrary, the EIPs arespent on payroll while only 25% can be world-widerefund that you would receive when youspent on non-payroll expenses limitedREHAB Update to rent, utilities, and mortgage interest coronavirusfile your 2020 federal tax return in Aprilon obligations in place as of February pandemic,of 2021. For example, if you received15, 2020. This was thereafter amended the Unitedthe maximum EIP of $3,400 and wereto a 60%/40% breakdown of the same Statessupposed to get a federal tax refund ofpayroll/expenses in a law that amended Congress$5,000 for 2020, your refund is reducedthe Act passed in June of 2020. If the passed intoby the amount of your EIP and you wouldLEGAL Q&A CHIRO Assistborrower does not spend the full 60% on law and theonly receive a $1,600 refund. What is alsopayroll, they will get zero reduction for Executive Directors Update illogical about this provision of the law isboth payroll (60%) and non-payroll (40%) president signed the Coronavirus Aid, Relief, and Economic Security (CARES)that it punishes those who overpaid theirexpenses. This so-called 60% cliff for Act on March 27, 2020. The CAREStaxes and are entitled to a refund whilepayroll expenses is quite arbitrary as an Act was rushed through the legislativebenefits those who underpaid their taxesemployer that spends 61% on payroll process in order to provide monetaryand owe money to the IRS for their 2020and 40% on non-payroll expenses gets relief to those who had to shut down theirtaxes. This is so because the government100% forgiveness while an employer businesses or leave their job due to socialhas indicated that those persons who arewho spends 59% on payroll and 40% on distancing mandates and to prevent thenot entitled to a 2020 tax refund will notLegislative Updatenon-payroll expenses gets no forgiveness INSURANCE Update INSURANCE Update at all. Borrowers were also hit with a U.S. economy from crashing. be penalized and have to write a check Key provisions of the Act include: stimulusto the government for their EIP whilereduction in forgiveness if they did not payments to all citizens of $1,200 tothose who are entitled to a refund gethave the same number of Full TimeTECHNIQUE Update$2,400, depending upon income levels;their refund reduced by their EIP amount.Equivalent employees by December the Paycheck Protection Program (PPP)Thus, if you were one of those diligent31, 2020, compared with two optional to help employers pay their payroll andindividuals who overpaid your taxes andpre-pandemic baseline periods. Finally, other business expenses; and Economicprovided what is essentially an interestthe borrower would also get a reduction free loan to the government, you will getin forgiveness if, on an employee Injury Disaster Loans (EIDL), a Smallyour refund reduced while others not soby employee basis, any employees MedicareQ&AMedicare Update salary was reduced by more than 25% Business Administration loan program for businesses with fewer than 500diligent will not get hit with this penalty. compared to pre-pandemic levels. Thus,OUR HEALTHemployees. Due to the urgency in passingSecond, the CARES Act created thewhat started out as an apparent simple these programs, what first appeared asPaycheck Protection Program (PPP)grant by the government to employers free money from the government toadministered by the Small Businessto get back to business turned into a stimulate the economy turned out to notAdministration (SBA) under Section 7acomplex program with less than 100% be exactly that. Multiple provisions of theof the SBA law. At first glance, the PPPforgiveness that you would need a CPA stimulus payments were thereafter limitedappeared to provide a fully forgivabledegree to fully understand. or reduced once the smoke cleared andloan to small businesses of fewer than the government realized that they would500 employees as long as the money wasFinally, the CARES Act provided for soon run out of money before manyused for payroll as well as other regularEconomic Injury Disaster Loans (EIDL) people received their checks and howbusiness expenses. However, after theunder Section 7b of the SBA laws. Unlike much these programs would cost overall.program was launched and even afterthe PPP, EIDL loans would be just that, The following is a brief summary of themoney had already been distributeda loan that would have to be paid back three stimulus programs listed above andto some, significant limitations onat 3.75% interest over a term of up to how they changed over time.forgiveness were implemented by the30 years. Initially, the SBA announced SBA reducing the amount of forgivenessthat any EIDL borrower would get an First, the CARES Act provided formany recipients of PPP funds wouldinitial non-repayable grant of $10,000 to Economic Impact Payments (EIPs) toreceive. This resulted in the amount notstimulate their business. However, the American households of up to $1,200 perforgiven being converted into a standardSBA soon realized it was going to run out adult for individuals whose income wasSBA loan that would have to be repaid,of money in the program too fast and it less than $99,000 (or $198,000 for jointthough under very reasonable terms atwould cost the government too much and filers) and $500 per child under 17 years1% over a number of years with an initialthe initial $10,000 grant was reduced to oldor up to $3,400 for a family of four.six-month moratorium on payment. The$1,000. Further, it was initially announced While on its face this appears to be freefirst and foremost retroactive restrictionthat no collateral would be required for money from the government, if youon forgiveness imposed by the SBAEIDL loans which was later walked back read the fine print of the Act this is notwas that 75% of the funds must beby the SBA to allow no collateral for EIDL 6 I Summer 2020 www.anjc.info'