Tax

Article Dean Dorton

Tax planning for 2021 is just as complicated as it was for 2020 for many due to the following major factors:

  • The impact on business profits, cash flow, and activity of the continued COVID-19 pandemic and the related government assistance programs, and
  • The current uncertainty about future tax law changes in proposed legislation.

Discussions of all the “what-ifs” are beyond the scope of this article, and our planning ideas will focus on the short-term – reducing 2021 taxes. We recommend you consult your tax advisor if you believe your situation is particularly impacted by unusual circumstances.

Maximize pre-tax deductions – Determine if you are on track to have 2021 maximum amounts withheld from your paycheck for your retirement plan deferrals, HSA contributions, dependent care benefits, and other pre-tax options with your employer. If you are not going to maximize these, consider having additional amounts withheld from year-end bonuses, if possible. Also, consider increasing these amounts for 2022.

Capital gains and losses – If you have realized net capital gains during 2021, consider realizing capital losses before the end of the year to offset the gains. Remember that net long-term losses can be used to offset net short-term capital gains which otherwise would be taxed as ordinary income. Also, be aware of the “wash sale” rules if you are inclined to reinvest in a security you sell at a loss.

Bonus depreciation & Section 179 – Businesses should consider these tax breaks related to fixed asset acquisitions:

  • Special “bonus depreciation” allowance. For 2021, 100% of the cost of qualifying property (includes used assets) is deductible if the property is placed in service by year end. This deduction can create or increase an existing business loss. Note: Because its requirements are much less restrictive, 100% bonus depreciation usually will make Section 179 not applicable.
  • Section 179 depreciation deduction. In 2021, individuals and business entities can elect to deduct up to $1,050,000 of qualifying business property cost in the year the property is placed in service. The deduction is reduced dollar-for-dollar for qualifying property cost greater than $2,620,000. This deduction is available only to the extent of positive business taxable income.

Self-employed retirement plans – If you have self-employment income and don’t have a retirement plan in place to shelter any of it, you may qualify to use a Self-Employed Plan (SEP). A SEP contribution deduction is allowed for 2021, even if the SEP is created and funded at any time up to the due date, including extensions, of your 2021 income tax return in 2022. Depending on the amount of self-employment income, you could fund (and deduct) up to $58,000 for 2021.

Required minimum distributions (RMDs) – Individuals with traditional IRAs and most individuals with employer-sponsored qualified retirement plan accounts are required to take minimum annual distributions from the account upon reaching a certain age, most recently changed to 72.

Charitable contributions – Depending on your situation, it may be beneficial to accelerate planned 2022 charitable contributions into 2021 or to defer 2021 contributions into 2022 to bunch them into the same year for greater tax savings.

Due to the CARES Act, the deduction limit on cash charitable donations has increased from 60% to 100% of adjusted gross income for contributions made in 2021 (note that the contributions must be to public charities or churches, not private foundations or donor-advised funds to qualify for the increased percentage). Contributions of most non-cash assets remain limited to 30% of adjusted gross income. For taxpayers who do not itemize their deductions, up to $300 of charitable contributions are allowed to be deducted this year even without itemizing.

Annual gifting – You may give your children and others up to $15,000 each in 2021 without any gift tax consequences. This annual exclusion is calculated on a per donee basis and no carryover is allowed for the unused exclusion. Consider making year-end gifts to fully utilize this year’s annual exclusion.

Roth IRAs – With individual tax rates at the lowest levels in recent memory, consider conversion of IRAs to Roth IRAs. The current tax cost from a conversion done now may turn out to be a relatively small price to pay for completely avoiding potentially higher future tax rates on the account’s earnings. Also, consider making a backdoor Roth IRA contribution, if your current income level is too high to make a direct Roth IRA contribution. A backdoor Roth IRA contribution consists of making a nondeductible IRA contribution followed by a conversion of the contributed funds to a Roth IRA. The rules regarding this are very particular so please consult with your tax advisor regarding this strategy.

HSAs & FSAs – Health Savings Accounts (HSAs) and Flexible Savings Accounts (FSAs) are two separate tools, each helping convert your dollars spent on medical expenses from post-tax into pre-tax, potentially saving you up to 42% of the cost. An HSA is a bank account set up to pay for medical expenses and must be paired with a high-deductible health plan. FSAs allow you to direct some of your wages into a pre-tax account, and your employer will reimburse you from the account for your documented medical expenses. Specific funding rules and limits apply to these accounts.

S Corporation and partnership losses – If your S Corporation will generate a tax loss this year, consider whether you have enough basis in the stock (or in loans you’ve made to the corporation) to take the full loss. If you don’t, additional investments should be considered. Similar considerations can arise in some situations with partnerships expecting tax losses.

Excess Business Loss – The Tax Cuts and Jobs Act (TCJA), passed in late 2017, introduced a limitation on business losses deductible by individuals and other non-corporate taxpayers (trusts and estates) against non-business income.  Specifically, the TCJA disallowed net tax losses from active businesses in excess of $250,000 ($500,000 for joint filers), adjusted annually for inflation. For pass-through entities, this is calculated at the owner level, as tax-paying persons combine all business activities when determining overall net business income or loss. Disallowed losses are treated as net operating loss carryforwards to the following year. Under the TCJA, the excess business loss (EBL) limitation was effective for 2018 through 2025. The CARES Act retroactively postponed implementation of the EBL limitation until 2021. The EBL limitation for 2021, as adjusted for inflation, is $262,000 (or $524,000 for joint returns).

Article Dean Dorton

Under the Kentucky Constitution, property owners who are 65 or older are eligible to receive the homestead exemption on their primary residence. The homestead exemption is $40,500 for both 2021 and 2022. The exemption amount is subtracted from the property’s assessed value, which reduces the owner’s property tax liability. For example, if the owner’s residence is assessed at a value of $250,000, 2021 property taxes would be computed on $209,500.

To qualify, each person claiming the exemption must file an application with the property valuation administrator (PVA) of the county in which the person resides. Applicants must own and maintain the property for which the exemption is sought as their personal residence as of January 1 of the application year. The application deadline is December 31.

Some PVAs have homestead application forms available on their websites. For example, the application for Jefferson County is available here, and the application for Fayette County is available here.

Only one exemption is allowed per household. Once applicants have been approved for the exemption, they are not required to reapply annually. However, if they move, they are required to reapply for the exemption for their new residence.

Certain utility companies also offer discounts for individuals who are 65 or older. If you believe you may be eligible, contact your utility company for further information.

Have questions? Email us at insights@deandorton.com

Article Dean Dorton

By: Elizabeth Woodward, CPA/CFF, CFE | ewoodward@deandorton.com and Joe Daugherty, CPA | jdaugherty@deandorton.com 

As cryptocurrency seems to be gaining in popularity, there are a couple of issues we believe investors should know about before getting involved with one or more of the proliferating number of cryptocurrencies, such as Bitcoin, Ethereum, and Litecoin. If you aren’t already educated about cryptocurrencies, a good starting place may be the Federal Trade Commission’s website, https://www.consumer.ftc.gov/articles/what-know-about-cryptocurrency-and-scams.

This article is by no means a complete discussion of the things people who are involved with cryptocurrency should know. It is intended to touch upon only a couple of relevant considerations.

One Risk of Cryptocurrency

Earlier this year, Elizabeth Woodward received a phone call from a colleague with what she first thought was a simple forensic accounting matter. Elizabeth’s colleague’s family member had died unexpectedly and there was some evidence that the deceased family member had invested in a cryptocurrency. But, no “private key” (cryptocurrency password) had been found to access the account. Without the private key, the estate’s executor wondered who he could contact to get the private key to know the value of the account and to make appropriate disposition of it to the estate’s beneficiaries.

After making some inquiries and doing a little research, Elizabeth’s answer to the executor’s question was “no one.” Cryptocurrency cannot be claimed without the private key. Maybe the cryptocurrency industry will develop a system to help with his kind of problem in the future. One risk of cryptocurrency is that a fraudulent person reaches out to a family member inquiring about cryptocurrency assets, promising to help – for a fee – and then fails to deliver. Cryptocurrencies are not backed by any government, so purchases, sales, exchanges, and other transactions involving cryptocurrencies are private transactions. It is important to consider both the risk of fraudulent people offering help with finding cryptocurrency and the risk of what happens to cryptocurrency when a family member with cryptocurrency assets dies.

Tax Basics of Cryptocurrency

The fundamental tax issue regarding cryptocurrencies is whether they should be viewed as cash or other property. The Internal Revenue Code does not address this issue, but in 2014 the IRS issued its position that cryptocurrencies are non-cash property for tax purposes. The implications of this are very significant. If someone, say, buys $25,000 worth of Bitcoins, it is viewed the same as buying $25,000 worth of Apple shares. Thus, when those Bitcoins are sold, the seller normally will recognize a capital gain or loss, which may be short- or long-term, depending on the familiar holding period rules. But, what if those Bitcoins instead are used to purchase something else, perhaps another cryptocurrency or other property? That transaction also would be a recognition transaction for tax purposes, with the gain or loss being measured by the value of the Bitcoins used, expressed in U. S. Dollars, at the time they are used in relation to their value, again expressed in U.S Dollars, when the Bitcoins were acquired.

For someone who is very active in buying or selling cryptocurrencies and in receiving or using them for property or services, accounting for these transactions can be very challenging.

We anticipate that the IRS will be enhancing third-party reporting rules and increasing its scrutiny of cryptocurrency transactions to reduce noncompliance with its rules.

Final Thoughts Regarding Today’s State of Cryptocurrency

Whether someone views cryptocurrency as an investment or as pure speculation, or with characteristics of each, we believe those who get involved with cryptocurrency first should become educated about its fundamentals, risks, and tax treatment.

This article was originally published in News & Views (Dean Dorton’s quarterly newsletter).

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Article Dean Dorton

We previously published an article highlighting key provisions in the American Rescue Plan Act of 2021 (ARP or Rescue Plan) for small businesses. The $1.9 trillion relief package was signed into law on March 11, and contains several tax changes.

Partial income tax exclusion for unemployment compensation received in 2020

Generally, an individual’s gross income includes unemployment compensation. For taxpayers whose adjusted gross income (AGI) is less than $150,000, the ARP excludes up to $10,200 of unemployment compensation received in 2020 from gross income. In the case of a joint return, the $10,200 exclusion applies to each spouse. The exclusion does not apply to taxpayers whose AGI is $150,000 or more; in this instance, all of the taxpayer’s unemployment compensation is taxable. The IRS has urged taxpayers who have already filed their 2020 tax return not to file an amended return or take any action because reductions in taxable income and refunds, if appropriate, will be processed automatically.

Another round of stimulus checks

The ARP authorizes a third round of stimulus checks. The stimulus payments are structured as refundable tax credits against 2021 income taxes, but the IRS has already started distributing advanced credits based on information from taxpayers’ 2020 income tax returns (or 2019 returns, if a taxpayer’s 2020 return has not been filed when the advanced credit is issued).

Payments are equal to $1,400 per eligible individual ($2,800 for married couples filing jointly) and $1,400 for each eligible dependent. For single taxpayers, the payment begins phasing out at an AGI of $75,000 and is completely phased out for individuals with an AGI of more than $80,000. The phase-out for married couples filing jointly begins at an AGI of $150,000 and ends at an AGI of $160,000. For heads of household, the payment begins phasing out at an AGI of $112,500 and is completely phased out at an AGI of $120,000.

Expansion of the child tax credit and child and dependent care credit

Child tax credit

For 2021, the ARP temporarily increases the amount of the child tax credit by modifying several provisions of existing law. The ARP makes the credit fully refundable and increases the maximum age for an eligible child to seventeen. It also increases the maximum amount of the credit from $2,000 to $3,000 per child ($3,600 for children under age six). The increased credit amount phases out for taxpayers with an AGI of more than $75,000 for single filers, $112,500 for heads of household, and $150,000 for married couples filing jointly.

The IRS is directed to issue half of a taxpayer’s expected 2021 credit in periodic payments from July through December of 2021. The remaining half of the 2021 credit will be claimed on the taxpayer’s 2021 income tax return (filed in 2022). The amount of the payments advanced during 2021 will be estimated by the IRS based on the taxpayer’s 2020 income tax return (or 2019 return if the taxpayer has not filed a 2020 return).

Child and dependent care credit

The ARP also makes several changes to the child and dependent care credit for 2021. This credit is available to taxpayers who pay expenses for the care of a child or other qualifying individual to enable the taxpayer (and the taxpayer’s spouse, if filing a joint return) to work or actively look for work. The amount of the credit is equal to a percentage of expenses paid to a provider for the care of the child or other qualifying individual. Notably, the ARP makes the child and dependent care credit refundable, allowing taxpayers with little to no income tax liability to benefit from the credit.

Generally, the total expenses that may be used to calculate the credit cannot exceed $3,000 (for one child or qualifying individual) or $6,000 (for two or more children or qualifying individuals). The ARP temporarily increases the cap on expenses to $8,000 and $16,000, respectively.

The ARP also increases the credit rate for certain taxpayers. For taxpayers with AGI of less than $125,000, the credit is equal to 50% of eligible expenses. The 50% credit rate phases down for taxpayers with AGI of $125,000 or more, until it reaches 20% for taxpayers with AGI of $185,000. The rate remains at 20% for taxpayers with AGI up to $400,000 and then phases down to 0% for taxpayers with AGI of more than $440,000.

The ARP also increases the maximum amount of employer-provided dependent care assistance that taxpayers can exclude from their income from $5,000 to $10,500. Like the changes to the child and dependent care credit, this change is effective for 2021 income tax returns only.

Extension of excess business loss limitation

The Tax Cuts and Jobs Act (TCJA), enacted at the end of 2017, introduced a limitation on business losses deductible by individuals and other non-corporate taxpayers (trusts and estates) against non-business income. Specifically, the TCJA disallowed 2018 net tax losses from active businesses in excess of $250,000 (for individual taxpayers) and $500,000 (for joint filers), adjusted annually for inflation. Under the TCJA, the excess business loss (EBL) limitation was effective for tax years 2018 through 2025. In March of 2020, the CARES Act retroactively postponed the effective date of the EBL limitation until tax years beginning in 2021, resulting in taxpayers filing amended returns to claim their full net tax loss.

On a less favorable note, the ARP extends the EBL limitation for one year, through 2026.

Miscellaneous tax provisions

The ARP contains a handful of miscellaneous tax provisions, including:

  • Providing for temporary, fully subsidized COBRA continuation coverage premiums for eligible individuals and reimbursing the taxpayer to whom the premiums are payable through a premium assistance credit, taken against the employer’s share of Medicare tax;
  • Specifying that gross income does not include any amount resulting from the discharge of any student loan occurring between 2021 and 2025;
  • Repealing the election to allocate interest expenses of members of a worldwide affiliated group on a worldwide basis, effective for tax years beginning after December 31, 2020; and
  • Broadening the provision that limits a publicly-held corporation’s deduction for compensation paid to certain employees by expanding the list of covered employees for years after 2026.

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Article Dean Dorton

Written by Kaydee Ruppert, Accounting & Financial Outsourcing Manager at Dean Dorton

The Employee Retention Tax Credit (ERTC), often referenced to as just ERC, is confusing a lot of nonprofit employers. If it’s confusing to you, you’re not alone! There are many nuances to this credit, but the following outline will assist you in navigating and maximizing the opportunity presented by ERTC.

The version of ERTC applicable to 2020 is slightly different than the version adopted for 2021, so they are addressed separately below for greater clarity. Also note that receipt of a Paycheck Protection Program (PPP) loan in either round does NOT prohibit your organization from taking advantage of the ERTC if you otherwise qualify, although any wages used for the ERTC cannot be used for PPP loan forgiveness.

2020 ERTC

Organizations that qualify for ERTC in 2020 may still apply for a refund or tax abatement applicable to the credit.

Determine Qualified Time Period
There are two methods for determining your organization’s qualified time period for 2020 ERTC. If both apply, you should select the one that covers the greater number of days. If neither apply, your organization is not eligible for ERTC for 2020.

If applicable, your organization’s qualified time period matches the dates during which operations in 2020 were at least partially suspended because of government orders limiting commerce, travel or group meetings due to COVID-19. The government issuing the order(s) that suspended your operations may be local, state or federal, but it must be a government order and not self-imposed. The starting date for suspended operations cannot be before March 13, 2020. The start and end dates of your qualified time period using this method of calculation will likely not coincide with the start or end dates of any given quarter.

If applicable, gross receipts for your organization must have significantly declined for one or more quarters in 2020 as compared to 2019. To determine eligibility under this method, first determine total gross receipts by quarter for 2019 and 2020. Divide the 2020 quarter totals by the respective 2019 quarter totals. If the result is less than .5, note the first day of that quarter per the chart below. That is the start of your significant decline in gross receipts. Compare subsequent quarters until you reach a result that is greater than .8. Note the last day of that quarter per the chart below. That is the end date of your significant decline in gross receipts.

Start and End Date for ERTC Sample Periods: 2020 ÷ 2019
Q1 3/13/2020 – 3/31/2020

<.5

 >.5

>.5
Q2 4/1/2020 – 6/30/2020

<.8

 <.5

>.5
Q3 7/1/2020 – 9/30/2020

>.8

 >.8

<.5
Q4 10/1/2020 – 12/31/2020

>.8

 >.8

>.8
Sample Period of Significant Decline in Gross Receipts

3/13/2020 – 9/30/2020

 4/1/2020 – 9/30/2020 7/1/2020 – 12/31/2020

Calculate Qualified Wages by Employee
The following process applies only to nonprofits that averaged 100 or fewer full-time employees in 2019. If your organization averaged more than 100 full-time employees in 2019, be aware that your calculation of qualified wages is different.

Qualified Time Period in 2020 Complete individually for each employee.
Q1 Q2 Q3 Q4  
Calculate wages paid by employee for all employees paid during qualified time periods in each quarter of 2020. Wages eligible for the ERTC are wages for Social Security tax purposes determined without regard to the contribution and benefit base.
Add health care costs that are allocable to that same period, regardless of when they were actually paid. This includes the employer portion of medical insurance premiums as well as employer contributions to an HRA or health FSA. It also includes the portion of the cost paid by the employee with pre-tax salary reduction contributions.
Subtract any portion of the resulting total that is already being used in the calculation of another credit or relief program. Examples include, but are not limited to, use of PPP funding, the Work Opportunity Tax Credit, or paid sick and family leave under the Families First Coronavirus Response Act.
The remainder, by employee, is the employee’s qualified wages eligible for credit by quarter.

Calculate Credit and Request Refund or Abatement
Multiply each employee’s qualified wages, by quarter, by 50%. The result is the ERTC applicable to the employee for that quarter until the total year-to-date cumulative amount for the employee reaches $5,000. At that point, no additional credit can be claimed for the individual.

The maximum credit of $5,000 per employee may be realized in just one quarter for some employees, while other employees may not have sufficient qualified wages in the entire qualified time period to reach $5,000. Determine which quarters in 2020 are impacted by the credit for your organization. Then complete IRS Form 941-X (Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund) for those quarters to claim your refund or abatement.

2021 ERTC

The ERTC is available for qualifying organizations until December 31, 2021 and should be claimed on the quarterly 941 Forms for 2021. These forms are due in April, July, October, and January 2022 so there is still time to determine whether or not you are eligible to include the credit on your return. Once you are confident that your organization is eligible, you may also choose to reduce your employment tax deposits for anticipated credits or submit IRS Form 7200 to request advance payment of employer credits. For the 2021 ERTC, only employers that averaged 500 or fewer full-time employees during 2019 are eligible to request an advance payment of the credit.

Determine Qualified Time Period
There are three methods for determining your organization’s qualified time period that result in two possible time periods for the calculation of the 2021 ERTC. If more than one method applies, you should select the one that covers the greater number of days. If none apply, your organization is not eligible for ERTC for 2021.

If applicable, your organization’s qualified time period matches the dates during which operations in 2021 were at least partially suspended because of government orders limiting commerce, travel or group meetings due to COVID-19. The government issuing the order(s) that suspended your operations may be local, state or federal, but it must be a government order and not self-imposed. The start and end dates of your qualified time period using this method of calculation will likely not coincide with the start or end dates of any given quarter.

If applicable, your organization’s gross receipts for one or all of the quarters in 2021 must significantly decline as compared to the same quarters in 2019. To determine eligibility under this method of qualification, first determine total gross receipts for the quarters being considered for 2019 and 2021. Divide the 2021 quarter total by the respective 2019 quarter total. If the result is less than .8 for the quarter, that full quarter is a qualified time period due to a significant decline in gross receipts.

If applicable, your organization’s gross receipts for the quarters immediately preceding the quarters being considered in of 2021 must reflect a significant decline as compared to the same quarters in 2019. A qualified time period of 1/1/2021 – 3/31/2021 requires that gross receipts for the fourth quarter of 2020 significantly declined as compared to the same quarter in 2019. Divide the quarter ended 12/31/2020 by the same quarter in 2019. If the result is less than .8, the first quarter of 2021 is a qualified time period due to a significant decline in gross receipts.

Likewise, a qualified time period of 4/1/2021 – 6/30/2021 requires that gross receipts for the first quarter of 2021 significantly declined as compared to the same quarter in 2019. Divide the quarter ended 3/31/2021 by the same quarter in 2019. If the result is less than .8, the second quarter of 2021 is a qualified time period due to a significant decline in gross receipts. The same methodology then applies to quarters 3 and 4 of 2021.

If this method is used to determine eligibility for a time period, you must elect to do so. Although the method for election has not been clarified yet by the IRS, there is an assumption that Form 941 will be updated to reflect this requirement.

Calculate Qualified Wages by Employee
The following process applies only to nonprofits that averaged 500 or fewer full-time employees in 2019. If your organization averaged more than 500 full-time employees in 2019, be aware that your calculation of qualified wages will be different.

Qualified Time Period in 2021 Complete individually for each employee.
Q1 Q2 Q3 Q4  
Calculate wages paid by employee for all employees paid during qualified time periods in each quarter of 2021. Wages eligible for the ERTC are wages for Social Security tax purposes determined without regard to the contribution and benefit base.
Add health care costs that are allocable to that same period, regardless of when they were actually paid. This includes the employer portion of medical insurance premiums as well as employer contributions to an HRA or health FSA. It also includes the portion of the cost paid by the employee with pre-tax salary reduction contributions.
Subtract any portion of the resulting total that is already being used in the calculation of another credit or relief program. Examples include, but are not limited to, use of PPP funding, the Work Opportunity Tax Credit, or paid sick and family leave under the Families First Coronavirus Response Act.
The remainder, by employee, is the employee’s qualified wages eligible for credit by quarter.

Calculate and Report Credit
Multiply each employee’s qualified wages, by quarter, by 70%. The result is the ERTC applicable to the employee for that quarter. The credit is capped at $7,000 per quarter per employee and must be reported on Form 941 for the applicable quarter to receive the respective offset to employment taxes due.

Dean Dorton’s nonprofit team has been closely monitoring the changing relief opportunities available to nonprofit organizations in this time of crisis. We are here to provide consultation, collaboration, or confirmation as needed in your journey back to sustainability.

Click the button below to learn more about Kaydee Ruppert, the newest nonprofit expert to join the Dean Dorton team:

Meet Kaydee Ruppert

For more information on COVID-19 relief efforts, visit our coronavirus relief resources page:

COVID-19 Resources

Do you have questions about House Bill 278? Contact your Dean Dorton advisor, or contact us at:

covid19solutions@deandorton.com

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On Friday, March 12, 2021, the Kentucky General Assembly passed House Bill 278 (HB 278), providing deductibility for Kentucky tax purposes of expenses paid with Paycheck Protection Program (PPP) loans. The same bill provides for the exclusion from taxable income and deductibility of expenses paid with Economic Injury Disaster Loan advances.

The CARES Act, passed in March 2020, launched PPP loans and Economic Injury Disaster Loan (EIDL) advances or grants. The Act provided that the cancellation of indebtedness income from a forgiven loan would not be taxable income. The CARES Act was silent on the deductibility of expenses paid with loan proceeds and made no provision for EIDL advances.

The Consolidated Appropriations Act, 2021 (Appropriations Act) made expenses paid with PPP loan funds deductible for federal income taxes and provided that EIDL advances would be treated in the same manner as PPP loans. With the Appropriations Act, Congress reversed the Internal Revenue Service’s decision that expenses paid with PPP loan proceeds would not be deductible. A collective sigh of relief could be heard across the country. Then, business owners and their advisors realized that deductibility of expenses at the state level would depend on each state’s laws.

The Kentucky Department of Revenue announced that Kentucky law did not permit the deductibility of expenses associated with income not subject to tax. Thus, Kentucky taxpayers were back at square one for at least a portion of their 2020 tax liability. With the passage of HB 278, expenses paid with PPP loan proceeds are deductible, and EIDL advances are treated the same as for federal income tax; that is, the amount of the advance is not subject to tax and amounts paid with the proceeds of the advance are tax-deductible. The General Assembly’s action is welcome, needed relief for most of Kentucky’s small businesses. Governor Beshear has stated that he will sign the bill when it arrives on his desk.

For more information on COVID-19 relief efforts, visit our coronavirus relief resources page:

COVID-19 Resources

Do you have questions about House Bill 278? Contact your Dean Dorton advisor, or contact us at:

covid19solutions@deandorton.com