COVID-19: How the pandemic is impacting the CPA world
May 26, 2020 | Carolyn LaViolette
From CPA candidates to tax preparers, small businesses and large, the profession has seen significant ramifications due to the COVID-19 pandemic. New information is being announced at a daily — and sometimes hourly — rate, making it difficult to keep track of everything.
This blog post will compile the latest information CPAs need to know during this uncertain time. Check back frequently for the latest information on closures, deadline changes and other related news items concerning the profession.
For more resources to navigate this uncertain time, please visit our pandemic planning webpage for articles, templates and webinars.
May 26, 2020
Interim final rules released for PPP loan forgiveness, loan review procedures
The SBA May 22 posted interim final rules for PPP loan forgiveness and loan review procedures. Highlights of the PPP loan forgiveness rule include:
- Establishment of an alternative method for determining when the eight-week period starts for businesses with pay cycles of biweekly or more frequent.
- Clarification that bonuses and hazard pay are eligible for loan forgiveness.
- Establishment of caps on the amount of loan forgiveness available for owner-employees and self-employed individuals’ own payroll compensation.
- Clarification on when non-payroll costs must be incurred or be paid to qualify for loan forgiveness.
Two concerns about the PPP loan forgiveness remain unaddressed. These include the eight-week period during which PPP funds must be spent, and the rule requiring PPP borrowers to spend at least 75% of the funds on payroll costs. These issues are addressed in multiple bills being considered by Congress.
May 19, 2020
SBA, Treasury release PPP loan forgiveness application, instructions
Much-awaited information on PPP loan forgiveness has been released. The form and instructions inform borrowers how to apply for forgiveness of their PPP loans, and includes measures to help reduce compliance burdens.
The SBA is expected to also issue regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities.
May 13, 2020
SBA, Treasury release information on certification of PPP loans
According to FAQ No. 46, the SBA (in consultation with the Department of the Treasury) has determined that the following safe harbor will apply to the SBA's review of PPP loans:
Any borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.
This safe harbor will allow the SBA to focus its reviews on larger loan requests. However, borrowers with loans greater than $2 million may still have adequate basis for making the required good-faith certification based on individual circumstances.
Please review the SBA's FAQ for Lenders and Borrowers to access the latest information (FAQ 46).
May 1, 2020
CPE, exam scores deadlines extended
The Minnesota Board of Accountancy (BOA) extended the CPE deadline from June 30 to Sept. 30, 2020, and expiring exam scores to Dec. 31, 2020. This decision was greatly influenced by the MNCPA’s request for a uniform CPE and exam scores extension due to the challenges many of our members are facing due to COVID-19.
What you need to know about the CPE deadline extension:
- The number of hours required hasn't changed — only the deadline to take the required hours.
- Any CPE hours taken in July, August or September 2020 can be counted toward either the 2020 or the 2021 cycle. The hours can’t be counted toward both cycles.
- If you decide to apply CPE hours taken July through September to the 2021 cycle, you shouldn’t report those hours until after you have renewed your certificate for 2021.
- There are no changes to the types of credits required (technical, non-technical, etc.) or the delivery formats in which you may earn CPE credits (group live, self-study, etc.).
- Certificate and firm permit renewals haven't changed. CPE must still be reported by Dec. 31 to renew a CPA certificate.
- This is a one-time change that only applies to this year.
What you need to know about the exam deadline extension:
- Any exam score expiring in 2020 is automatically extended to Dec. 31, 2020.
- Continuous testing is scheduled to begin July 1, 2020.
- Prometric plans to open testing locations in a limited capacity, and we’ve learned there’s a backlog in exam appointments extending several months. The BOA may reevaluate the extension as circumstances change and more information is known about Prometric’s schedules and testing times available for CPA exam candidates.
Minnesota's stay-at-home order extended to May 18
Gov. Tim Walz issued Executive Order 20-48, extending the stay-at-home order to May 18. No changes were made to the definitions of critical workers and sectors, but the order does allow customer-facing retail businesses to sell goods through curbside or outside pick-up and delivery.
The Minnesota Department of Employment and Economic Development is issuing guidance for reopening businesses. Please review their website for information on what is and isn't permitted under this latest order.
April 24, 2020
Congress passes $484 billion package for PPP, testing and more
Congress this week passed a bill appropriating more than $300 billion to the Paycheck Protection Program (PPP), the small-business loan program that reached its cap within two weeks of its launch.
The agreement also includes funds for small-business disaster loans and grants, emergency funding for hospitals and about $25 billion for testing. The bill totals $484 billion.
April 16, 2020
PPP loan program hits its cap
The Small Business administration announced that the $350 billion emergency loan program has run out of funds.
There is pressure on Congress to add an extra $250 billion to the program as many struggling small businesses need these funds to stay afloat. An agreement has not been reached as of this date.
April 14, 2020
Minnesota Department of Revenue (DOR) issues estimated payments, abatements guidance
This week, the DOR provided the following information regarding estimated payments for the 2020 tax year and abatements.
Estimated payments guidance
The first quarter 2020 estimated income tax payments for individuals, calendar year S-corporations, partnerships and fiduciaries are still due April 15, 2020. To avoid penalty, interest or additional tax charges, you must base your 2020 estimated tax payments on one of the following options:
- 90% of estimated liability in 2020.
- 100% of actual liability in 2019 (110% for individuals if your AGI was more than $150,000).
- 75% of actual liability in 2018.
Abatements for individuals, businesses
You may request the DOR to abate late-payment or late-filing penalties or interest if you've been affected by the COVID-19 pandemic. The guidelines are available on their website:
From the AICPA: Your PPP agent status and independence
The AICPA's Professional Ethics Executive Committee (PEEC) issued a statement about whether serving as an attest client's agent for their PPP application impairs a CPA's independence. According to the PEEC, CPAs may advise their attest clients in understanding the information needed on the application and determining the amounts to be included, provided the CPA doesn't prepare or sign the application or perform management responsibilities on behalf of the applicant. Additionally, if the lender pays the CPA an “agent fee” for that service, the CPA is not, simply by nature of receiving the fee, an agent – nor does receipt of the fee constitute a contingent fee.
Full details from the PEEC can be viewed on the AICPA's website. Be sure to also view more PPP resources for CPAs.
April 13, 2020
Prometric test centers remain closed through April 30
Prometric announced that its test centers in the U.S. and Canada will remain closed through April 30. Prometric will automatically cancel scheduled appointments from April 16-30 and clear Notices to Schedule. Candidates should watch for an email from Prometric confirming the cancellation and providing instructions for next steps.
At this time, Prometric anticipates re-opening test centers beginning May 1 in selected areas. Please consult their website for more information.
April 9, 2020
Additional Paycheck Protection Program resources and information
New resources about the Paycheck Protection Program (PPP) are available to help CPAs advise their clients.
From the MNCPA
From the Small Business Administration (SBA)
- PPP informational page Includes loan information, lender forms and guidance, and details on who can apply.
- NEW PPP FAQs Provides clarification on commonly asked questions, including calculations, application issues and more.
From the AICPA
- PPP resources page Includes payroll calculators, a sample PP application and an overview of other SBA loan options to discuss with clients.
- Video update on PPP A discussion on the role of CPA firms, lender and payroll data elements and other information.
As a reminder, small businesses and sole proprietorships affected by the COVID-19 pandemic can start applying for loans today. Independent contractors and self-employed individuals can apply starting April 10. Please see our intial PPP post for the U.S. Treasury Department's guidance on the program.
IRS grants broad relief on filing dates
The IRS today released Notice 2020-23, extending more tax deadlines for individuals and businesses.
Notice 2020-23 updates Notice 2020-18 by providing additional relief to taxpayers affected by the pandemic, including but not limited to:
- Individual and corporate returns.
- Partnership return filings.
- Estate and trust income tax payments and return filings.
- Gift and generation-skipping transfer tax payments.
- Exempt organizations.
- Excise tax payments on investment income.
- Quarterly estimated income tax payments.
For the affected taxpayers, the due date for filing and making payments is automatically postponed to July 15, 2020. There's no need to file any extension forms.
Please review Notice 2020-23 for details on the affected taxpayer groups.
Minnesota sales and use tax payment grace period extended to May 20
The Minnesota Department of Revenue (DOR) announced they're extending the grace period on sales and use tax payments to May 20 for businesses identified in Executive Order 20-04, the temporary closure of bars, restaurants and other public accommodations. Affected businesses will not be assessed penalties or interest if they have monthly payments due March 20 and pay by May 20, or have monthly or quarterly payments due April 20 and pay by May 20. Returns should still be filed by their due dates.
Please review the DOR's website for more details on this grace period.
April 8, 2020
Walz extends stay-at-home order to May 4
Effective today, Gov. Walz issued Executive Order 20-33, extending Minnesota's stay-at-home order through 11:59 p.m. Sunday, May 3. Minnesotans are strongly discrouaged from engaging in unnecessary travel during this time period.
An updated list of critical industries was issued along with this order. All workers are encouraged to telecommute, even those identified in critical industries. Accounting and tax services remain a critical industry under this order.
April 1, 2020
Paycheck Protection Program applications open April 3 for small businesses, sole proprietorships
The U.S. Treasury Department released information on the assistance available for small businesses through the recently enacted CARES Act. Small businesses and sole proprietorships affected by the COVID-19 pandemic can apply for loans under the Paycheck Protection Program starting April 3. Independent contractors and self-employed individuals can apply starting April 10.
Below are documents pertaining to the Paycheck Protection Program:
March 30, 2020
DEED issues new unemployment application schedule
Due to the influx of applications for unemployment benefits, Minnesota's Department of Employment and Economic Development (DEED) issued a new application schedule in order to better serve applicants and increase efficiency.
The application schedule is based on the last digit of an applicant's Social Security number. Please review the schedule to see which day of the week you should start an application.
Congress enacts CARES Act
The Coronavirus Aid, Relief and Economic Security Act (CARES Act) was enacted into law March 27. The Act contains many tax provisions to help offset the economic impact of the COVID-19 pandemic.
Several webinars are available that will walk through the critical highlights of this new legislation. Visit the MNCPA's CARES Act Webinars webpage to view dates and register.
March 27, 2020
DEED updates critical industries list, answers business owners' questions
Since the initial stay-at-home order announcement, Minnesota's Department of Employment and Economic Development (DEED) updated its list of critical industries. Industries that are highlighted have had their status changed from non-critical to critical since March 25. The list has also been reordered to read alphabetically by industry name.
DEED Commissioner Steve Grove recently participated in a webinar, hosted by the Minnesota Chamber of Commerce, where he answered business owners' questions about Gov. Walz's stay-at-home order, the critical industries list, maintaining day-to-day operations for non-critical industries and more.
Watch the webinar
Finally, DEED has an email for employers to submit their questions relating to your industry status. Email them at email@example.com to receive an answer within 24 hours.
CPA exam emergency testing period invoked
Due to the closure of Prometric testing centers in the United States and Canada, NASBA, the AICPA and Prometric have decided to invoke an emergency testing period. The 2020 second-quarter testing window will be extended from June 10 to June 30 in anticipation of the reopening of test centers.
This is in addition to NASBA's extension of all Notices to Schedule expiring between April 1 and June 30, and waiving all rescheduling fees.
March 25, 2020
Walz announces stay-at-home order, critical industries
The governor has issued a two-week-long "stay-at-home" order today, effective at 11:59 p.m. March 27 through 5 p.m. April 10. With the exception of workers in identified critical industries who are unable to work remotely, all employees must work from home.
Among the industries identified on the Department of Employment and Economic Development’s website, accounting, tax preparation, bookkeeping and payroll services is listed as a critical industry. That means those workers are allowed to travel to and from their office (and childcare, if needed). It’s important to note that virtual work is still mandated if your organization has the capability to do so.
We encourage your to review DEED’s list identifying which industries are deemed critical to see if your industry is listed as essential during this time. Please note: This list has been updated since the initial announcement.
MNCPA urges Minnesota Department of Revenue (DOR) to conform to federal tax relief
Today, the MNCPA submitted a letter to Commissioner Bauerly outlining our members' concerns with the DOR's state tax filing relief. Amongst the several items listed in the letter, we outlined serious concerns with having the state's relief being limited to individual tax returns, and not including estimated tax payments for tax year 2020 included in the July 15, 2020, extension.
The MNCPA is continuing to have conversations with DOR leaders and the governor's office about this issue, as well as collecting and submitting questions from our members concerning the DOR's response to COVID-19.
IRS releases filing and payment deadlines Q&A
The IRS published answers to frequently asked questions related to the relief provided in Notice 2020-18. The questions and answers will be updated periodically to communicate information to taxpayers and tax professionals.
Department of Labor's guidance on Families First Coronavirus Response Act published
The first round of guidance has been released for employees and employers to better understand the protections and relief offered by the Families First Coronavirus Response Act. The guidance includes:
March 24, 2020
NASBA extends Notice to Schedule (NTS) deadline
According to the Board of Accountancy, all candidates with NTS expirations between April 1 - June 30, 2020, will be extended until Sept. 30, 2020. NASBA is expected to send out communications and will not assess any fees for the extension.
As of today, there hasn't been an extension of the 18-month timeline to complete the CPA exam; all waiver requests must be done on an individual basis. The MNCPA submitted a letter to the BOA requesting an extension be made for all candidates since testing centers have been closed. The letter also requested an extension to the CPE reporting deadline for active CPAs.
March 23, 2020
Minnesota Department of Revenue (DOR) issues notice of state tax filing extension
As expected, the DOR officially annouced that the state tax filing deadline will be extended to July 15, 2020.
Unexpectedly, the state's guidance differs from the IRS in significant ways, including:
- The filing extension doesn't apply to estimated tax payments due April 15, 2020, for the 2020 tax year.
- The extension only applies to individual tax returns, not business or corporate returns.
The MNCPA continues to reach out to the DOR and urge them to address these discrepancies.
Emergency loans available for struggling Minnesota businesses
Executive Order 20-15 authorizes the Minnesota Department of Employment and Economic Development (DEED) to establish a Small Business Emergency Loan program. These loans are meant to help close the gap for business owners who may be waiting a few weeks before their SBA emergency loan is received.
The emergency loan program is available to businesses that were required to close per Gov. Walz’s executive orders last week. The loans will be 50% forgivable and offered at a 0% interest rate.
March 21, 2020
IRS releases Notice 2020-18, eliminates payment caps
The IRS issued Notice 2020-18
, which supersedes and expands on the tax relief originally announced in Notice 2020-17.
The most significant change in 2020-18 is that taxpayers may defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest regardless of the amount owed
. The original payment caps have been eliminated.
2020-18 also clarifies that this extension applies to estimated tax payments due April 15, 2020.
Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief.
Small Business Administration (SBA) disaster loans available
The Minnesota Department of Employment and Economic Development (DEED) announced the availability of SBA Economic Injury Disaster Loans for Minnesota businesses. These low-interest loans of up to $2 million to small businesses and private nonprofits may be used toward working capital to meet needs such as payroll, accounts payable and fixed debt payments that can’t be paid due to the COVID-19 pandemic.
If you or your clients are interested in more information, please visit the SBA’s Economic Injury Disaster Loan webpage
March 20, 2020, 3 p.m.
Walz announces intent to extend Minnesota tax deadline
During a press conference, Gov. Walz announced that he plans to follow suit on a state income tax filing extension with no interest or penalties. The presumed date for the state’s filing deadline is July 15, 2020, in accordance with the federal extension.
Commissioner Bauerly and the Minnesota Department of Revenue staff are evaluating whether a statute change to move Minnesota’s tax deadline is required.
Federal tax deadline extended to July 15
Secretary Mnuchin announced that tax day will be moved to July 15. Along with the payment deferral announced earlier in the week, taxpayers now also have an extra three months to file their returns.
The Minnesota Department of Revenue does not have guidance out about the state tax deadline, but it’s expected to by March 23. Commissioner Bauerly and DOR staff are evaluating whether a statute change to move Minnesota’s tax deadline is required.
March 19, 2020, 1 p.m.
MNCPA submits letter urging accounting be deemed “essential service”
Gov. Walz is expected to issue a shelter-in-place order in the near future. The MNCPA sent a letter to Gov. Walz requesting he designate the accounting profession as an essential service should such an order be put in place.
Families First Coronavirus Response Act signed into law
On March 18, Congress enacted the Families First Coronavirus Response Act
(FFCRA). This legislation expands relief, including changes to paid sick leave, in response to the COVID-19 outbreak. It goes into effect within 15 days.
March 18, 2020, 4:30 p.m.
IRS, Treasury announces guidance to defer tax payments
The U.S. Treasury Department and IRS this afternoon issued guidance allowing a deferral of federal income tax payments until July 15, 2020. According to their website:
- All individual and other non-corporate tax filers may defer up to $1 million of federal income tax (including self-employment tax) payments due on April 15, 2020, until July 15, 2020, without penalties or interest.
- Corporate taxpayers may defer up to $10 million of federal income tax payments due on April 15, 2020, until July 15, 2020, without penalties or interest.
Please note: This guidance has been superseded by the guidance issued in Notice 2020-18.
Minnesota Department of Revenue provides sales tax payment extension for certain businesses
Gov. Walz today announced the state is moving the March 20, 2020, deadline for February sales tax remittances to April 20, 2020, for those businesses identified in Executive Order 20-04. Executive Order 20-04 temporarily closed bars, restaurants and other public places to reduce the spread of COVID-19.
There will be no interest or penalties assessed for those identified businesses who remit sales tax payments by April 20, 2020. Businesses should still file their return by March 20; the grace period is only for monthly filers and only for the March 20 payment at this time.
March 17, 2020, 4:30 p.m.
Prometric to close CPA testing centers
NASBA announced that, effective immediately, Prometric will close test centers in the United States and Canada for a period of 30 days. They anticipate re-opening test centers on April 16, 2020.
Candidates with existing appointments should watch for an email from Prometric about rescheduling. Candidates wanting to schedule a new appointment may do so through Prometric, but note that appointments won’t be available before April 16.
Learn more from Prometric →
If this delay causes you to risk losing a previously passed exam section, you can request a waiver with the Minnesota Board of Accountancy. If you have questions about the process or how to word the request, contact us at firstname.lastname@example.org and we can help you.
Social Security announces office closures
Effective March 17, 2020, all local Social Security offices will be closed to the public. Secure online services will remain available at www.socialsecurity.gov. Local offices will also continue to provide critical services over the phone. Please refer to the following if you require service from your local Social Security office:
- First, please visit their secure and convenient online services available at www.socialsecurity.gov/onlineservices. You can apply for retirement, disability, and Medicare benefits online, check the status of an application or appeal, request a replacement Social Security card (in most areas), print a benefit verification letter, and more. They also have an FAQ page to answer most of your Social Security questions online.
- If you cannot conduct your Social Security business online, please check their online field office locator for specific information about how to directly contact your local office. Your local office will be able to provide critical services to help you apply for benefits, answer your questions and provide other services over the phone.
- If you already have an in-office appointment scheduled, you’ll be called to handle your appointment over the phone instead. If you have a hearing scheduled, they will call you to discuss alternatives for continuing with your hearing, including offering a telephonic hearing. Please note their call may come from a PRIVATE number and not from a U.S. Government phone. Please remember that Social Security employees will not threaten you or ask for any form of payment.
- If you cannot complete your Social Security business online, please call their National 800 Number at 1-800-772-1213 (TTY 1-800-325-0778) for automated service options you can use without waiting to speak with a telephone representative. A list of automated telephone services is available online at www.socialsecurity.gov/agency/contact/phone.html.
March 12, 2020
OMB memo outlines potential extension of the single audit submission deadline
The Office of Management and Budget (OMB) issued a memo, Administrative Relief for Recipients and Applicants of Federal Financial Assistance Directly Impacted by the Novel Coronavirus (COVID-19). The memo identified certain actions to relief short term administrative, financial management and audit requirements under 2 CFR 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards.
There was some confusion as to whether the memo provides a blanket extension to the single audit deadline. This is not the case. OMB confirmed the following:
- The memo is intended to provide guidance to federal agencies relating to areas where relief may be provided to certain recipients.
- The memo is not instructing federal agencies to provide a blanket waiver for all recipients impacted by COVID-19. Instead, its guidance primarily relates to recipients receiving funds disbursed from the approximately $9 billion in emergency supplemental appropriations for coronavirus preparation and response (H.R.6074). Note that there could be cases where agencies may decide to apply the guidance in the memorandum for existing awards that are deemed by the agency to be for continued research and services necessary to carry out the emergency response relating to COVID-19.
- Federal agencies are expected to issue their own guidance implementing the provisions of the OMB memo. The Department of Health and Human Services is the primary funder of awards made under H.R. 6074.
- OMB understands that other recipients that are not receiving H.R.6074 funds may have operations that have been adversely impacted by COVID-19. OMB is working on additional guidance to address these situations, including whether any flexibility will be given on single audit submissions that are late due to these circumstances.
Topics: Legislative & Government Affairs, Government, Health Care
Carolyn LaViolette is the MNCPA communications manager, working to enhance members’ professional reputations through content, media relations and public affairs. She is also the MNCPA’s unofficial pianist and has tickled the ivories at multiple MNCPA events. Outside of her love for writing and music, Carolyn spends her time playing with her two daughters, attending Tommie football games with her husband, and memorizing the lyrics to musicals. If you can’t get tickets to Hamilton, she is happy to sing the soundtrack for you. Carolyn can be reached at 952-885-5530 or email@example.com.
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