News and Analysis
If you are interested in applying for a Paycheck Protection Program (PPP) loan on behalf of your business, you must submit an application to your lender soon so it can be submitted to the SBA before the June 30 deadline.
Meanwhile, the administration this week released a new and simplified forgiveness application for small business owners who received a PPP loan. OMA Connections Partner GBQ Partners has published this analysis of the revised application, while OMA Connections Partner Clark Schaefer Hackett has published this summary with links to key forms and instructions. 6/18/2020
Many businesses that have received loans under the PPP now have questions about the proper accounting for the funds. OMA Connections Partner Clark Schaefer Hackett offers this guidance to provide some clarity under several scenarios. 6/18/2020
The July 15 tax-filing deadline — postponed from April 15 — is quickly approaching. The IRS is reminding all taxpayers who have yet to file their 2019 federal tax return to file electronically now, choose direct deposit for their refund, or pay any tax owed electronically. 6/15/2020
This week, the OMA Tax Committee — chaired by Meredith Mullett, manager of tax compliance for The J.M. Smucker Company — met virtually for its second meeting of the year. Members were briefed on recent tax-related developments since the start of the COVID-19 emergency and were provided an overview of the state’s deteriorating revenues. Guest speakers included Matt Peters, assistant director of the Ohio Development Services Agency (DSA), and John Werkman, chief of DSA’s business services division.
OMA members were briefed by experts from RSM on recent federal activity to provide more flexibility for recipients of Paycheck Protection Program (PPP) business loans and tax relief in response to COVID-19. The committee is scheduled to meet again Nov. 18. 6/10/2020
Last week, the U.S. Senate passed and President Trump signed the Paycheck Protection Program (PPP) Flexibility Act, giving businesses more leeway on how and when to spend the loan funds. Originally, loan recipients needed to spend their funds within eight weeks of receipt. That time limit has been expanded to 24 weeks under the new law. No new loans can be approved after June 30, 2020.
OMA Connections Partner Gilmore Jasion Mahler has posted this recording of its June 10 webinar that examines changes under the new PPP law as businesses work to manage their loans and ensure forgiveness. Also, OMA Connections Partner Crowe has published this summary of the new law. 6/10/2020
In its latest monthly financial report, released this week, the Ohio Office of Budget and Management (OBM) projects the state’s Fiscal Year 2021 budget shortfall to be $2.43 billion. The state’s new fiscal year begins July 1. The DeWine administration has already initiated actions to control spending, including continuing freezes on state hiring.
Four taxes account for the bulk of the deficit. The auto and non-auto sales taxes are projected to fall 13% below estimates. The Commercial Activity Tax (CAT) and personal income tax are estimated to be roughly 10% and 7%, respectively, below forecasts.
For the current fiscal year, total General Revenue Fund receipts are $686.3 million (-2.2%) below estimates. Gov. Mike DeWine has said he expects to tap the state’s $2.7 billion rainy day fund at some point. 6/10/2020
Small businesses will have more time to spend their Paycheck Protection Program (PPP) loans, should new legislation approved this week by the U.S. Senate be enacted. Originally, loan recipients needed to spend their funds within eight weeks of receipt. That time limit has been expanded to 24 weeks under the Senate-approved bill.
As of our publishing deadline, the bill was awaiting signature by President Donald Trump. 6/4/2020
Last week, the OMA joined the Ohio Bankers League and other Ohio business organizations, urging U.S. Treasury Secretary Steven Mnuchin and the U.S. Small Business Administration to streamline and simplify the process for recipients of small business loans made under the Paycheck Protection Program (PPP). Specifically, the group recommend that Treasury and SBA create a streamlined forgiveness application for loans under $350,000. 6/1/2020
Ohio’s Office of Budget and Management (OBM) this week estimated the state’s looming budget deficit for the coming fiscal year, FY 2021, to be $2.5 billion. OBM Director Kimberly Murnieks announced a number of steps to curb personnel costs, including pay cuts and step freezes. These follow adjustments announced in early May by Gov. Mike DeWine to address the budget shortfall for the current fiscal year, which ends on June 30.
While Gov. Mike DeWine has ruled out an income tax increase, there are increasing concerns that the growing state deficit could result in increased taxes on businesses — or rescinded business tax credits. The OMA will continue to monitor the situation. 6/2/2020
As federal policymakers explore options for a “Phase 4” coronavirus relief plan, the Tax Foundation notes that it’s important to understand how the CARES Act modified tax rules for businesses, including changes to net operating loss (NOL) deduction rules such as NOL carrybacks.
The HEROES Act, recently approved by the U.S. House of Representatives, would limit NOL carrybacks by only allowing firms to carry back losses to 2018 rather than a full five years. The Tax Foundation says this would cut short an important liquidity measure while disrupting firms’ plans. 5/26/2020