President Trump Signs Coronavirus Relief and Government Funding Bill

President Trump Signs Coronavirus Relief and Government Funding Bill

On Sunday, December 27, President Trump signed the COVID-19 relief and government funding bill into law. The Coronavirus Response and Relief Supplemental Appropriations Act of 2021 has the following key provisions:

  • Clarification on the deductibility of expenses paid with forgiven PPP loans
  • Additional PPP funding for certain businesses
  • Extends certain tax credits for payroll and sick leave
  • Direct stimulus payments to individuals
  • Extended unemployment benefits

For more details on these key provisions and others, please see our earlier blog regarding the bill by clicking here: Congress Passes COVID-19 Bill, Waiting on the President’s Signature

We will continue to monitor the updates related to this bill and send out additional information as it becomes available. Please reach out to your trusted Scheffel Boyle team member with questions. We are here to help!

Congress Passes the Coronavirus Response and Relief Supplemental Appropriations Act of 2021

Congress Passes COVID-19 Relief Bill, Waiting on the President’s Signature

The U.S. Senate and House of Representatives passed a $900 billion COVID-19 relief bill Monday night. The Coronavirus Response and Relief Supplemental Appropriations Act of 2021, as it has been named, still needs to be signed by the President and is not law at this time.

A summary of the key terms of the proposed bill is as follows:

Business Provisions

  • Paycheck Protection Program (PPP)
    • It clarifies that businesses can deduct expenses paid with forgiven PPP loans. This applies to the original round of PPP loans and now this new round of PPP loans.
    • The bill provides an additional $284 billion in funding for round two of PPP loans.
    • Who is eligible for round two?
      • First-time qualified borrowers with 500 or fewer employees
      • Businesses that previously received a PPP loan in round one who specifically have 300 or fewer employees; have used or will use the full amount of their first PPP loan; and can show a 25% gross revenue decline in certain 2020 quarters compared with the same quarter in 2019
    • The bill expands eligibility for certain nonprofits (for example, Chamber of Commerce and Churches) and includes set-asides for very small businesses and community-based lenders.
    • Maximum loan size for round two PPP loans is $2 million.
    • The bill makes additional expenses eligible for loan forgiveness besides payroll, rent, mortgage interest and utilities. The bill changed the requirement to spend no less than 60% of the funds on payroll over the covered period. It also includes:
      • Covered worker protection and facility modification expenditures, including PPE to comply with COVID-19 federal health and safety guidelines
      • Expenditures to suppliers that are essential at the time of purchase
      • Covered operating costs such as software and cloud computing services and accounting needs
    • The bill creates a simplified forgiveness application process for loans of $150,000 or less. The U.S. Small Business Administration (SBA) must create the application within 24 days of the bill’s enactment.
    • Repeals the requirement that PPP borrowers deduct the amount of any Economic Injury Disaster Loan Program (EIDL) advance from their PPP forgiveness amount.
  • Provides new Economic Injury Disaster Loan Program (EIDL) grants for business in low-income communities.
  • Extends and expands the Employee Retention Tax Credit through July 1, 2021.
  • Expands the deduction for business meals to 100% for 2021 and 2022.
  • Extends the Families First Coronavirus Response Act (FFCRA) paid leave 100% tax credits through March 31, 2021. This does not extend the requirement, but it allows an employer to keep offering such leave.

Individual Provisions:

  • Economic impact payments of $600 for individuals making up to $75,000 per year and $1,200 for married couples making $150,000 per year, as well as a $600 payment for each dependent child.
  • Extended unemployment benefits $300 per week supplement from December 26 until March 14, 2021, an extra 11 weeks. It also extends the Pandemic Unemployment Assistance (PUA) program with expanded coverage to the self-employed, gig workers, and others in nontraditional employment.
  • Adjustments to how the Child Tax Credit and Earned Income Tax Credit are calculated for 2020. The calculation may be able to use 2019 income to determine an individual’s credit eligibility for the 2020 tax year.
  • The new above-the-line charitable contribution is extended through 2021 at $600 married filing jointly and $300 for all other filers.
  • Flexible Savings Accounts (FSA) balances can be rolled from the 2020 tax year into 2021. This could be helpful for any unused childcare expenses unable to be used in 2020.
  • Payroll tax deferral repayment by employees as been extended from April 2021 to December 31, 2021.

Our team is closely monitoring this situation as updates are released. Please reach out to your trusted Scheffel Boyle team member with questions. We are here to help!



Digital graphic that illustrates financial fraud

Fraudulent Unemployment Claims on the Rise in Illinois

Government officials throughout Illinois are urging residents to be on the lookout for identity theft activity related to unemployment insurance.

In an alert published by Illinois Attorney General’s office, people who have not filed for unemployment insurance are receiving letters and debit cards, loaded with funds, in the mail despite not having applied for benefits. Unfortunately, Illinoisans receiving these unsolicited letters and debit cards had their personal and financial information compromised.

The Attorney General urges those who believe their personal or financial information has been compromised to take the following steps:

  • If you received a debit card in the mail that you did not request, do not activate it.
  • Notify state and local authorities.
  • Obtain and monitor your credit report.
    • You can check your credit report free once per week through April 2021 by visiting
    • You may request a request a fraud alert by contacting one of the three major credit bureaus. Also, consider placing a freeze on your credit report to prevent further fraudulent activity.
  • Review all your financial accounts closely for accuracy and dispute any unauthorized charges or debits immediately with your financial institution.

Victims of this fraud are not responsible for repaying stolen unemployment benefits and will be eligible to file for unemployment benefits if they do become unemployed.

IRS Clarifies Timing on No Deductibility of Expenses Paid with PPP Funds

The IRS yesterday released Revenue Ruling 2020-27 to clarify the timing on the deductibility of expenses paid with PPP loan funds.

The ruling asks the question, “may a taxpayer that received a loan guaranteed under the Paycheck Protection Program (PPP), and paid or incurred certain otherwise deductible expenses listed in section 1106(b) of the Coronavirus Aid, Relief, and Economic Security Act deduct those expenses in the taxable year in which the expenses were paid or incurred if, at the end of such taxable year, the taxpayer reasonably expects to receive forgiveness of the covered loan based on the otherwise deductible expenses?”



Back in May 2020, the IRS issued Notice 2020-32 that informed taxpayers that “no deduction is allowed for an eligible expense that is otherwise deductible if the payment of the eligible expense results in forgiveness of the covered loan.”  That meant that even though the forgiveness of the covered loan was exempt from income, the nondeductibility of the expenses has indirectly caused the loan to be taxable.  Over the last few months, Congress has proposed legislation that would make the expenses deductible, but nothing has been passed through congress to date.  In addition, as we are approaching the end of the year, taxpayers who haven’t applied for forgiveness have been left wondering the timing of the deduction of the expenses depending on if forgiveness is obtained in a subsequent year.  This brings us to Revenue Ruling 2020-27.



  • Situation 1: During the period beginning on February 15, 2020, and ending on December 31, 2020 (covered period), Taxpayer paid expenses that are described in section 161 of the Internal Revenue Code and section 1106(a) of the CARES Act (eligible expenses).  These expenses include payroll costs that qualify under section 1106(a)(8) of the CARES Act, interest on a mortgage that qualifies as interest on a covered mortgage obligation under section 1106(a)(2) of the CARES Act, utility payments that qualify as covered utility payment under section 1106(a)(5) of the Cares Act, and rent that qualifies as payment on a covered rent obligation under section 1106(a)(4) of the CARES Act.  In November 2020, taxpayer applied to the lender for forgiveness of the covered loan on the basis of the eligible expenses it paid during the covered period.  At that time, and based on taxpayer’s payment of the eligible expenses, taxpayer satisfied all requirements under section 1106 of the CARES Act for forgiveness of the covered loan.  The lender does no inform taxpayer whether the loan will be forgiven before the end of 2020.
  • Situation 2: During the covered period, Taxpayer paid the same types of eligible expenses that were paid in Situation 1.  Taxpayer did not apply for forgiveness of the covered loan before the end of 2020, although, taking into account the Taxpayer’s payment of the eligible expenses during the covered period, satisfied all other requirements under section 1106 of the CARES Act for forgiveness of the covered loan.  Taxpayer expects to apply to the lender for forgiveness of the covered loan in 2021.



In both situations, the Taxpayer had a reasonable expectation of the reimbursement.  At the end of 2020, the reimbursement of the Taxpayers eligible expenses, in the form of covered loan forgiveness, is reasonably expected to occur rather than being unforeseeable, such that the deduction is inappropriate.  Taxpayer’s eligible expenses are not deducible because there is a reasonable expectation of reimbursement.

A Taxpayer that received a covered loan guaranteed under the PPP and paid or incurred certain otherwise deductible expenses may not deduct those eligible expenses in the taxable year in which the expenses were paid or incurred if, at the end of such taxable year, the taxpayer reasonably expects to receive forgiveness of the covered loan on the basis of the expenses it paid or accrued during the covered period, even if the taxpayer has not submitted an application for forgiveness of the covered loan by the end of such taxable year.

In summary, no matter when the application is filed or when it is approved for forgiveness, if reasonably expected to obtain forgiveness, the expenses will be nondeductible in 2020.

What was not provided in the Revenue Ruling was how to handle business owners with no employee payroll (for example, Schedule C filers with no employees).  These business owners don’t have the qualified expenses that qualifies them for forgiveness.



Our team is available to assist you during the process of applying for PPP loan forgiveness. We anticipate there may still be some modifications to the Paycheck Protection Program in the coming weeks and our team is closely monitoring the situation.  We will update you as any such changes or new laws are released.  Please contact your trusted Scheffel Boyle team member with questions. We are always here to help.

SBA Simplifies PPP Forgiveness for Loans Under $50,000

On October 8th, the Treasury and U.S. Small Business Administration (SBA) released a new, scaled-down forgiveness application for borrowers with a PPP loan of $50,000 or less, other than any borrower that together with its affiliates received loans totaling $2 million or greater. The new interim final rule (linked here) pertaining to this streamlined process also provides new guidance for both forgiveness and loan review processes for PPP loans.

This new, simplified application (Form 3508S) has been much anticipated by both borrowers and lenders. Although the PPP loans which will qualify for this application account for only 9% of PPP dollars loaned, those loans total about two-thirds of all PPP loans issued.

With the new rules in place, PPP borrowers of $50,000 or less are now exempt from any decrease in forgiveness of the loan based on a reduction in full-time equivalent (FTE) employees and/or reductions in employee salary or wages. This eliminates the need for borrowers of $50,000 or less to calculate potentially complex FTE or salary reduction totals. While borrowers will still be required to make certifications and provide some documentation for their lender for payroll and nonpayroll costs, the process for both borrowers and lenders is now much simpler.

If you have questions regarding your PPP loan forgiveness application, please contact our team. We are always here to help.

Click here to download Form 3508S instructions.

Lenders Are Not Required to Report PPP Loan Forgiveness to IRS

On Tuesday, September 22nd, the IRS released Announcement 2020-12, stating that lenders who make Paycheck Protection Program (PPP) loans are not required to file an information return or furnish a payee statement if all or a portion of the loan is later forgiven based on the borrower satisfying requirements of section 1106.

Under section 1106 of the CARES Act, a PPP loan may be forgiven if certain requirements are met by the borrower. The new announcement states that an institution is not required to “for federal income tax purposes only,” file Form 1099-C for funds that are forgiven. In addition, they are not to give the recipient a payee statement for forgiven amounts.

If you have questions regarding this update, please contact our Financial Institutions Group. We are always here to help.

IRS to Stop Sending Past Due Notices Due to Backlog of Unopened Mail

The Internal Revenue Service is one of many agencies still feeling the effects of office closures due to COVID-19. Like many businesses, the IRS shut its doors this Spring due to the pandemic. As a result of the closure, a large backlog of unopened mail for the agency has accumulated. Even though many IRS employees have now returned to the office, more mail continues to arrive each day, making the backlog of correspondence difficult to dwindle down. At one time during the summer, it was estimated that approximately 12 million pieces of unopened mail sat in trailers outside IRS facilities.

Although the agency was struggling to process its incoming correspondence, balance due and late payment notices were still being sent to taxpayers, resulting in complaints and confusion from those who received notices but had already sent in payment. The IRS is urging taxpayers not to cancel their checks and allow them more time to process the payments, stating that any payment would be posted as the date received and not the date the agency began to process the payment. In short, as long as the check does not bounce and is not cancelled, interest and penalties will still be avoided if the payment was paid on time.

The IRS is dealing with higher than normal call volumes and longer wait times. All of these issues culminated in Representative Richard Neal (D-Massachusetts), chair of the House Ways and Means Committee, asking the IRS to stop mailing balance due notices to taxpayers. He also urged the agency to ensure penalties and interest would not be charged to those affected by the mail backlog.

On Friday, August 21st, the IRS responded by releasing this statement, announcing it would temporarily stop sending three balance due notices (CP-501, CP-503, and CP-504) while it sorts through the backlog of mail, which is estimated to still be in the millions. These are follow-up notices that are automatically mailed to taxpayers that did not respond to the first notice, CP-14. Although this policy change was announced late last week, the IRS warned that some previously scheduled notices may still hit mailboxes over the next few weeks.

The IRS has advised taxpayers to avoid calling their support lines at this time, as they are still experiencing high call volumes and long wait times. They suggested taxpayers visit the IRS website linked here for options to make payments other than by mail in the future. Payments may still be made by mail as well.

If you have questions regarding this information, please contact our team. We are always here to help.

Madison County CARES Act Relief Provides Funds for Local Businesses

Madison County will open an application process on Monday, August 17,  2020 to grant $1.75 million in CARES Act relief funds to businesses and public service agencies located in the County that were impacted by COVID-19. Funds will be distributed through the Community Development Block Grant (CDBG) as a result of the CARES Act, with an allocation of $1.5 million for businesses and $250,000 for public service agencies. Grants will be awarded on a first come, first served basis for all submissions with complete and qualifying applications. Funds for accepted applicants are expected to be available in late October 2020.

This program provides a maximum $15,000, 0% deferred payment loan to help offset/recover from the significant, temporary loss of revenue to these qualified businesses during this pandemic, and to assist businesses in retaining and paying employees. The amounts disbursed will be broken down by the following Full-Time Equivalent (FTE) Employee counts:


FTE Employees Loan Amount
1-5 Maximum $5,000
6-10 Maximum $10,000
11-25 Maximum $15,000


Program Overview

  • $15,000 maximum (see above) for qualifying small businesses with a physical location in Madison County (1-25 full-time employees, or equivalent part-time employees, including the owner).
  • Food Service Establishments, short-term lodging, and other non-essential businesses impacted by the local or state safer-at-home orders are eligible.
  • Larger businesses over 25 FTE employees, non-profits, and home-based businesses are not eligible.
  • Funds can only be used to reimburse the cost of business interruption due to orders to close or limit operations, provided those costs are not paid by insurance or by another federal program. Such costs may include employee wages, vendors, rent, or other business expenses.


Eligible Businesses & Applications

Qualifying businesses include small businesses hardest hit by the COVID-19 pandemic, such as food service establishments, short-term lodging establishments, and non-essential businesses.

More detailed information on the funding, eligibility and application requirements of the program can be found on the Madison County website by clicking here. Applications can be submitted beginning August 17, 2020 and will be accepted through August 24, 2020 at 4:30 PM.

Alton and Granite City manage their own CDBG funding and will be responsible for taking applications within those communities. Please follow the link above for more details. We have included links below for the Application and Guidelines for applying.

Madison County CARES Act Economic Development Application Guidelines

Madison County Small Business Loan Application


How We Can Help

Our team is closely monitoring the relief programs available to local businesses and we are ready to provide assistance in applying for these funds. Please contact our team with questions on your eligibility or help with your application.

Trump Signs Executive Order Deferring Payroll Taxes

On August 8th, President Trump signed a total of four Executive Orders to provide further Coronavirus relief. The orders provided enhanced unemployment payments, student loan payment relief, eviction suspensions, and, most notably, a deferral of payroll taxes.

Payroll tax, or more frequently known as employment tax, is comprised of 6.2% Social Security tax and 1.45% Medicare tax. The order’s deferral will be applied toward the employee’s portion of Social Security tax withheld and for an employee’s pretax wages or compensation covering any biweekly pay period of less than $4,000. This deferral will be held without penalties, interest, or any additional tax imposed on the employer or employee.

While this does provide some assistance to taxpayers since Congress has come to a standstill on relief bill negotiations, a deferral is just a postponement of taxes owed. In short, the deferred taxes will still have to be paid if no further action is taken to eliminate them altogether. The deferral is for the withholding, deposit, and payment of these taxes from September 1, 2020 through December 31, 2020.

The Treasury is expected to issue guidance on implementation of the order as there are many outstanding questions surrounding it. The U.S. Chamber of Commerce and the AICPA are just two major organizations calling for further clarification on the order and its provisions for payroll tax deferral. Some of these issues include:

  • Eligibility to elect this deferral
  • Who is responsible for repayment of the deferred taxes
  • Payment deadlines for the taxes due
  • How payment will be collected
  • How fluctuating salaries and bonuses are accounted for with the order
  • Short-term and seasonal worker payroll
  • How to handle the deferred taxes when employees change jobs during the defined period

We are closely monitoring this situation as more guidance is released. Please contact your Scheffel Boyle team member with questions. We are always here to help.

SBA Will Start Accepting PPP Forgiveness Applications From Lenders on August 10, 2020

The Small Business Administration (SBA) has set a date of August 10th for lenders to begin submitting forgiveness applications for Paycheck Protection Program (PPP) loans. On July 23rd, the SBA issued a procedural notice (linked here) to lenders outlining the process of applying for forgiveness for their borrowers. The SBA has created a forgiveness platform for lenders use only for the process.

A borrower may submit a Loan Forgiveness Application before the end of the 8-week or 24-week Covered Period, provided that the borrower has used all of the loan proceeds for which the borrower is requesting forgiveness and the borrower’s loan forgiveness application accounts for any salary reductions in excess of 25% for the full covered period.

In the notice, the SBA once again stressed that “providing an accurate calculation of the loan forgiveness amount is the responsibility of the borrower, and Lenders may rely on borrower representations. Lenders are expected to perform a good-faith review, in a reasonable time, of the borrower’s calculations and supporting documents concerning amounts eligible for forgiveness.” It went on to say that the Lender must review the application and submit its decision on forgiveness, with supporting documents, to the SBA no later than 60 days after its receipt from the borrower. Furthermore, the SBA will have the opportunity to review all PPP loans at any time, if needed.


PPP loan recipients applying for forgiveness should expect the following:

  • Borrower is to submit SBA Form 3508 or 3508EZ (or Lender’s equivalent Loan Forgiveness Application) to the lender servicing their loan
  • Lender is to confirm receipt of the application and required supporting documentation (payroll and nonpayroll costs)
  • Lender is to confirm the borrower’s calculations on Form 3508 or 3508EZ (or Lender’s equivalent Loan Forgiveness Application)
  • Lender is to review eligible expenses and supporting documentation provided by the borrower
  • If the lender finds errors in the borrower’s calculations or does not feel the documentation provided is substantial for forgiveness, the Lender is expected to work with the borrower to resolve the outstanding issues.


The lender must indicate their decision as:

  • Approval in Full
  • Approval in Part
  • Denied
  • Denied without Prejudice


What should borrowers do to prepare? Talk to your lenders!

Regardless of the Covered Period a borrower chooses, it is critical to begin conversations about loan forgiveness procedures with lenders as soon as possible, particularly since lenders will be making the initial review before it goes to the Small Business Administration (SBA) for final approval.

Borrowers should get clarity from their lender on the forgiveness process, including:

  • Will applications be accepted on the SBA’s paper forms or will an online submission be required?
  • Is the lender requiring borrowers to submit documentation via email, an online portal, or in some other way?
  • What formats are acceptable when submitting supporting documentation?


How We Can Help

Our team is able to assist you during the process of applying for PPP loan forgiveness. We anticipate there may be modifications to the terms of the Paycheck Protection Program in the coming weeks and our team is closely monitoring the situation.  We will update you as any such changes or new laws are released.  Please contact your trusted Scheffel Boyle team member with questions. We are always here to help.