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Guidance on American Rescue Plan’s Tax Credits

May 14, 2021

Some OMA members have recently asked for more details about the tax credits provided by the American Rescue Plan (ARP) Act, the most recent federal COVID-19 relief law. Here’s a short list of helpful resources from OMA Connections Partners:

  • GBQ Partners’ summary of the extended Employee Retention Credit — a refundable tax credit against certain employment taxes that equals up to 70% of the qualified wages (as much as $28,000 per employee for 2021).
  • Dinsmore’s summary of the sick and family leave tax credit, which allows employers to take an additional credit for 100% of wages paid as qualified sick or family leave to employees.
  • Benesch’s summary of the ARP’s COBRA coverage credit, as well as other key provisions in the law.

Also, the IRS recently published details regarding tax credits for employers that provide paid leave to employees to get COVID-19 vaccinations. 5/10/2021

Ohio to Receive $12B in Federal Funds

May 14, 2021

This week, the U.S. Department of Treasury announced that Ohio will receive nearly $5.4 billion as part of the $1.9 trillion American Rescue Plan (ARP) Act. Another $6.6 billion will be sent to Ohio counties, cities, and townships. (See the eligible funding sources.) In all, 37 Ohio cities and townships and all 88 counties will receive funding.

Ohio Attorney General Dave Yost criticized the Treasury Department for including in its guidance the ARP’s restriction that forbids states from providing tax relief if they accept the federal funds. A federal judge has ruled that Yost may proceed with his lawsuit challenging Congress’ stipulation that the ARP funding can’t be used, directly or indirectly, to offset state tax cuts. 5/13/2021

Bill Would Create Sales Tax Exemption for Production of Electric Vehicle Parts

May 14, 2021

Last week, bipartisan legislation (House Bill 292) was introduced in the Ohio House to establish the Electric Vehicle Commission and create a temporary sales tax exemption for the production of electric vehicle parts. Co-sponsor Rep. Al Cutrona (R-Canfield) says electric vehicles are on track to be an essential part of the future of the automobile industry, and creating a commission to make recommendations is a productive first step. 5/14/2021

Inflation Gauges Show Big Jump From a Year Ago

May 14, 2021

According to new federal data, U.S. inflation accelerated at its fastest pace since 2008 last month with the Consumer Price Index (CPI) spiking 4.2% from a year ago. The index for used cars and trucks rose 10% percent in April, the largest one-month increase since tracking began in 1953.

Meanwhile, the Producer Price Index spiked 6.2% for the 12 months ended in April, the largest increase since the Bureau of Labor Statistics started tracking the data.

In its analysis, OMA Connections Partner RSM reminds clients that comparing prices in today’s marketplace to prices 12 months ago is an “apples-to-oranges comparison.” 5/12/2021

Let Your Representatives Know How Ohio’s Changes to Income Tax Withholdings Would Affect Your Operations

May 7, 2021

When the General Assembly voted in March to override the governor’s veto of Senate Bill 22, the countdown started on the repeal of temporary language that has allowed employers to continue withholding employees’ municipal income tax based on their principal (pre-pandemic) place of work.

Absent a law change, there’s a chance the temporary withholding provision could go away as soon as late August — meaning employers would need to begin withholding income tax in the municipalities in which their employees are remotely working. The OMA contends that August is too soon for employers to revamp their payroll systems and, among other things, have return-to-work plans in place or determine the treatment of hybrid work arrangements. The OMA is advocating for an end date that is no earlier than Dec. 31, 2021.

Click here to tell your lawmakers how your operations would be affected if your business is forced to enact withholding changes as early as August. 5/6/2021

A Look at Biden’s Far-Reaching Tax Overhaul

May 7, 2021

President Joe Biden recently announced his $1.8 trillion American Families Plan, the third step in his “Build Back Better” policy initiative. This followed an earlier announcement of the president’s proposed $2.3 trillion American Jobs Plan (which would be funded with the “Made in America” tax plan). These plans propose major changes to the federal tax system, including tax increases on both individuals and businesses.

OMA Connections Partner Clark Schaefer Hackett has published this brief summary detailing the administration’s far-reaching tax proposals. Connections Partner Crowe has also published its analysis of Biden’s tax plans. 5/3/2021

Manufacturers Respond to Biden’s Proposed Tax Hikes

April 30, 2021

The Biden administration has announced details on two major initiatives — one to fund a massive expansion of social and educational programs; the other to fund new infrastructure spending. OMA Connections Partner Plante Moran has published this comprehensive look at the Biden tax proposals to fund these plans.

National Association of Manufacturers President and CEO Jay Timmons has reacted to President Joe Biden’s address to Congress. Timmons says manufacturers want to work with the administration to achieve historic infrastructure investment and other priorities, but cautions that “raising taxes on manufacturers — including many small businesses that pay at the individual rate — would stop our recovery in its tracks” and cost American jobs. He also warns against enacting anti-worker policies like the PRO Act. 4/29/2021

Ohio’s Top Combined Cap Gains Rates Would Soar to 48% Under Biden Plan

April 30, 2021

President Joe Biden’s American Family Plan includes a big increase in the top federal tax rate on long-term capital gains and qualified dividends, from 23.8% today to 39.6%. This would be bring the top federal rate to highs not seen since the 1920s — an obvious disincentive to invest, including for many Ohio manufacturers.

The non-partisan Tax Foundation reports that under the Biden plan, the maximum federal rate on capital gains would be 43.4% when including the net investment income tax. This means Ohio’s maximum combined capital gains rate would soar from the current 28.6% to 48.2%. 4/26/2021

Webinar on Demand: Employer Credits in COVID-19 Law, Including COBRA Impacts

April 30, 2021

The latest federal COVID-19 relief package — the American Rescue Plan Act — created new employment provisions while expanding existing programs created by previous pandemic-related legislation.

In this 75-minute recorded webinar — and accompanying handout — Jeffrey D. Smith, partner with the Cleveland office of OMA Connections Partner Fisher Phillips, takes a detailed look at the benefits and obligations for employers under the expanded Employee Retention Credit; the expanded Paid Sick and Family Leave Credits; and the new COBRA subsidies for qualified individuals. 4/28/2021

Analysis: Inflation in Material Prices Alarming, Not Unexpected

April 30, 2021

From January 2020 to January 2021, iron and scrap steel prices, as well as those for lumber and plywood, increased more than 50%. Copper and brass mill shapes experienced a 22% price hike.

According to new analysis from OMA Connections Partner GBQ Partners, while the magnitude of these price increases has been alarming, the spikes were not unexpected due to reduced production, U.S. tariffs, and a return to more normal economic activity. GBQ says the current overheating should cool off by the third quarter of 2021. 4/27/2021