Accounting
6 Points Congress Must Include in Next Covid Relief Package
The AICPA says that Congress must address taxes, PPP forgiveness, remote work issues, local government support and liability protections in the next round of Covid relief.
Jul. 20, 2020
The American Institute of CPAs (AICPA) says there are six policy solutions that should be included in the next phase of federal COVID-19 relief legislation. These recommendations, which were sent in a letter (attached) to Congressional leadership, are focused on small business’ and the American workforce’s urgent need for fast, simple solutions that drive economic recovery.
“CPAs are on the front line helping small businesses and other organizations understand and access coronavirus relief resources, such as the Paycheck Protection Program (PPP). These accounting professionals are trusted advisers to millions of organizations across our nation, and they tell us that small businesses continue to struggle,” said Barry Melancon, CPA, CGMA, AICPA president and CEO. “We call on Congressional leadership to not delay in finding bipartisan consensus on additional relief and recovery legislation, and to include provisions such as ours that reflect the true and immediate need of organizations today.”
The AICPA’s recommendations are:
1. Allow Full Deductions for Paycheck Protection Program (PPP) Related Business Expenses: To uphold Congress’ intent that PPP recipients receive the full benefit of a PPP loan, AICPA supports bipartisan legislation clarifying that receipt and forgiveness of coronavirus assistance through the PPP does not affect the deductibility of ordinary business expenses. (Read letter of support.)
2. Provide Information and Tools to Further Simplify PPP Loan Forgiveness Application Process: It is critical that all PPP borrowers have access to key guidance from the SBA and Treasury, as well as tools to easily determine and apply for the forgiven amount. AICPA supports bipartisan, bicameral legislation (H.R. 7413 / S. 4171, the Calculate PPP Forgiveness Act of 2020) that would require the SBA and Treasury to provide or certify free, publicly accessible PPP loan forgiveness calculators. (Read press release.)
3. Remove Unnecessary and Unfair Tax Obstacles to Remote Work: The AICPA has long called for simplifying complex tax reporting rules employers and employees face as a result of numerous state income tax laws and varying de minimis exemptions when employees work outside their home states. We support bipartisan legislation, S. 3995, the Remote and Mobile Worker Relief Act of 2020, which reaches a balance between states’ rights to tax income and the needs of individuals and businesses, especially small businesses, to operate efficiently in this economic climate. (Read letter of support.)
4. Allow Section 501(c)(6) Associations and Organizations Access to PPP: Local 501(c)(6) organizations are currently ineligible for assistance through the PPP. Many AICPA members serve these organizations, which are suffering from event and meeting cancellations. We appreciate the strong bipartisan congressional support on this issue and urge Congress to include language allowing section 501(c)(6) organizations access to the PPP in the upcoming package.
5. Provide Additional Federal Fiscal Relief to State and Local Governments: Without appropriately targeted federal assistance, state budget shortfalls could trigger new state taxes on many already-struggling small businesses. CPAs have sounded the alarm on the urgent need for more direct federal aid to states and localities to keep our economic recovery on track. AICPA urges Congress to include meaningful federal aid for state and local governments in the upcoming package.
6. Adopt New Coronavirus-Related Liability Provisions: We are concerned about a wave of meritless coronavirus-related lawsuits against employers trying their best to operate safely in an uncertain environment. Employers and employees must both feel safe and confident about returning to work, and new temporary and targeted liability protections that do not dampen key worker protections should be an important piece of the upcoming legislative package.
The AICPA has developed several resources, including the new, free PPP loan forgiveness platform (read more here), practice aids and guides, to help small businesses and CPA firms during the pandemic. To learn more, visit the AICPA Coronavirus Resource Center.