Tax and Finance Management

The Domino Effect of a $15 Minimum Wage

In its analysis of the Biden administration’s proposed hike to the federal minimum wage, OMA Connections Partner Fisher Phillips writes that “employers should start planning now for at least some increase, whether to $15 per hour or some other (hopefully more reasonable) rate.”

The firm adds: “Keep in mind that an increase in the minimum wage rate to $15 would also increase the overtime premium rate for hours worked over 40 to a staggering $22.50 per hour (currently $10.875 per hour). Moreover, an increase to the minimum wage rate is likely to put upward pressure on wage rates for other jobs.” Finally, at $15 per hour, “an employee who works 40 hours per week would earn $600. This is just $84 less than the current minimum salary threshold for exempt employees, which would likely prompt regulatory increases of that rate as well.” 2/2/2021

At a Glance: Ohio’s General Revenue Spending

In odd-numbered years — like this year — Ohio lawmakers’ top priority is crafting the state budget for the upcoming two fiscal years. During the budget process, the General Assembly largely focuses on the General Revenue Fund (GRF) — the largest funding source for state agencies.

Ohio’s major taxes fund the bulk of the GRF, with more than half of that funding coming from sales-and-use taxes and personal income tax.

As lawmakers prepare to receive the governor’s new budget plan, here’s a look at state spending from the GRF during fiscal year 2020. As illustrated by the Legislative Service Commission, spending for Medicaid — at $15.47 billion — was easily the biggest budget item, followed by K-12 education ($7.85 billion). 1/26/2021

Employee Retention Credit Webinar Available Now

The Employee Retention Credit (ERC) — a refundable tax credit against certain employment taxes — was recently extended by Congress. See the IRS’ FAQs page for updated information on the ERC, as well as this summary from OMA Connections Partner Clark Schaefer Hackett.

OMA Connections Partner GBQ Partners is offering an on-demand webinar that discusses the changes to the ERC and what they may mean for your business. Watch the webinar. 1/27/2021

Tax Calendar of 2021 Deadlines

To help employers ensure they don’t miss any important 2021 tax deadlines, OMA Connections Partner Clark Schaefer Hackett has provided this summary of key dates for various tax-related forms, payments and other actions. 1/27/2021

OMA Tax Committee Meets Feb. 17

The OMA’s Tax and Finance Committee will hold its first meeting of the year on Feb. 17 at 10 a.m. On the agenda is Ohio Tax Commissioner Jeff McClain, who will brief members on the state budget. Members can register now for this online event. 1/27/2021

Experts: Dramatic Hike in Minimum Wage Would Mean Job Losses, Fewer Hires

In Congress, Democrats have introduced legislation to increase the federal minimum wage to $15 per hour by 2025, more than doubling the current minimum wage of $7.25. In Ohio, a bill has been introduced to raise the state’s minimum wage from $8.80 to $15 by 2027 — and indexing it to inflation thereafter.

But experts say now is not the time to raise the minimum wage. After studying the effects of recent minimum wage hikes in six different states, researchers at Washington University in St. Louis found that increasing the minimum wage would hurt new entrants into the labor market, especially in the manufacturing sector.

A recent analysis by the non-partisan Congressional Budget Office found that as many as 3.7 million workers could lose their jobs as a result of a $15 minimum wage. 1/27/2021

JobsOhio Takes Issue With Tax Foundation Rankings

JobsOhio, the statewide economic development corporation, is objecting to a new ranking released by the Tax Foundation, a Washington, D.C.-based think tank.

In its Jan. 7 blog post, JobsOhio staff wrote that despite the Buckeye State’s strong showings in several comparisons by business publications, Ohio is near the bottom of the Tax Foundation’s 2021 State Business Tax Climate ranking. Echoing the longtime sentiments of the OMA, JobsOhio says the foundation uses a flawed methodology that does not reflect the tax reality that most Ohio businesses face.

“Ohio is a business-friendly state,” the blog post says. “In fact, Ohio is one of only a handful of states in the U.S. with no state level corporate income tax and no personal property tax.” 1/19/2021

A Closer Look at the Employee Retention Credit Extension

OMA Connections Partner Gilmore Jasion Mahler has published this analysis of the federal government’s extension of the Employee Retention Credit (ERC), designed to support businesses that keep employees on payroll during the pandemic. Under the most recent COVID-19 relief law, the ERC has been extended through June 2021 and is now available to businesses with Paycheck Protection Program (PPP) loans. 1/19/2021

Guidance for Second Draw PPP Loans

This week, the U.S. Small Business Administration (SBA) issued an interim final rule titled “Business PPP Loan Forgiveness Requirements and Loan Procedures,” a 62-page document that mostly recaps guidance already issued about the First Draw Paycheck Protection Program (PPP) loans, while updating and incorporating the guidance for the Second Draw PPP loans.

OMA Connections Partner GBQ Partners has summarized the key points from the SBA’s new PPP guidance. 1/21/2021

Payroll Tax Relief for Employers Affected by COVID-19

In response to the pandemic, Congress last year created four payroll tax relief programs. These programs were expanded in the Consolidated Appropriations Act (CAA), which was enacted last month. Eligible employers may qualify for one or more of the following four programs:

• payroll tax deferral;
• employee retention credit;
• paid sick leave credit; and
• paid family leave credit.

OMA Connections Partner RSM has published this updated summary of the four programs. It includes steps that employers can take to utilize the programs. 1/14/2021