PICPA Amendment Addresses PPP Loan Forgiveness
Pennsylvania House lawmakers are considering legislation that addresses state taxation of relief stemming from the federal CARES Act. House Bill 2408, sponsored by Rep. Brandon Markosek (D-Allegheny), would exempt from state and local taxation cash payments to individuals and couples under the CARES Act.
At the urging of the PICPA, the state House unanimously adopted an amendment offered by Rep. George Dunbar (R-Washington) to clarify that loans forgiven under the federal Paycheck Protection Program (PPP) are not included in the taxable income of individuals, pass-through entities, or other persons subject to the Pennsylvania personal income tax and the Local Tax Enabling Act. In its note to lawmakers, the PICPA wrote, “The tax treatment of loans forgiven under the PPP should not depend upon how a business is organized. The purpose of the program is to help businesses, in whatever form they operate, during this time of crisis. Businesses should be entitled to use the full benefits received from these programs to maintain their businesses during the COVID-19 pandemic and not have to worry about whether they are taxable.”
The bill, with the PICPA language, is before the full House for consideration.
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Continuing Education Restrictions Suspended for CPAs
Gov. Tom Wolf’s administration granted a Department of State request to suspend restrictions on distance-learning for continuing education requirements for some licensed professionals, including CPAs. Many licensing boards of the Bureau of Professional and Occupational Affairs have ongoing continuing education requirements. Although only a few are currently in renewal, many “in-person” education programs have been cancelled or education centers have closed. It is unknown how long this will continue.
The State Board of Accountancy is one of the boards to have restrictions on the continuing education hours that can be done through distance education. Wolf’s order lifts the 40-credit-hour limitation on individual study for the 2020-2021 CPA licensing period. Wolf granted a suspension of restrictions that limited the ability of licensees to take classes online or participate in distance-learning opportunities for the current biennial renewal period to permit all licensees to complete their continuing education online during the COVID-19 pandemic.
Check out PICPA's online education offerings and Value Pass Plus discounts.
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More COVID-19 Bills on Deck
Legislators are continuing their efforts to address the COVID-19 pandemic by introducing measures aimed at helping Pennsylvania residents and businesses.
Sen. Pam Iovino (D-Allegheny) plans to introduce legislation that would assist Pennsylvania businesses in receiving payment for business interruption insurance claims filed during the COVID-19 pandemic. This legislation imposes no costs on the commonwealth or taxpayers, and is modeled on an Oregon insurance statute that has withstood constitutional challenges.
Sen. Jay Costa (D-Allegheny) plans to introduce legislation to address issues regarding the garnishment of stimulus and unemployment compensation benefits by private creditors and collection agencies.
Sen. Anthony Williams (D-Philadelphia) plans to introduce the Pennsylvania Giving Retailers and Our Convenience Employees Relief (GROCER) Act to provide a state personal income tax holiday for essential workers for the entirety of 2020. This mirrors bipartisan federal legislation offered by Congressmen U.S. Reps. Glenn Thompson (R-PA 15) and Dwight Evans (D-PA 3).
Sen. Wayne Fontana (D-Allegheny) plans to introduce legislation that would make personal protective equipment, such as facial masks and gloves, exempt from Pennsylvania sales tax. Many personal protective items are already exempt from sales tax, including medical grade facial masks and gloves. However, with the current pandemic and the shortage of such items, residents and businesses have taken it upon themselves to make these items on their own with materials, and many of the supplies used to make this protective equipment are not exempt from sales tax.
Rep. Seth Grove (R-York) plans to introduce legislation that would restore transparency in state government. Since Gov. Wolf closed the physical locations of commonwealth agencies, they have ignored any requests made under the Right-to-Know (RTK) Law. While transparency between government and people is critical during normal times, it is even more important during times of emergency.
All these bills are awaiting formal introduction.
Rep. Joe Ciresi (D-Montgomery) introduced House Bill 2452, which would establish a COVID-19 grant program for ultra-small businesses. To provide these businesses with additional and needed relief for the hard times that they are facing during this outbreak, this legislation would create a $50 million grant program for the smallest businesses, which make no more than $3 million in gross annual receipts or employ up to 30 full-time employees.
Similarly, Rep. Anita Kulik (D-Allegheny) introduced House Bill 2457, legislation allowing small retail businesses to have limited operations during the COVID-19 pandemic. This only applies to retail businesses with 10 or fewer employees worldwide, and they must be in a brick and mortar setting. The businesses would only allow shopping through online and phone ordering, with curbside pickup or delivery to the customers’ homes by the business, mail, or other service.
Both bills are pending committee consideration.
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Finance Committee Approves Measure to Aid Senior Citizens
The Senate Finance Committee approved a measure that would expedite payments from the Property Tax Rent Rebate Program and create a Senior Tax Reduction Incentive Volunteer Exchange (STRIVE) program.
Under House Bill 1076, introduced by Rep. Tim Hennessey (R-Chester), Property Tax Rent Rebate claims could be paid immediately if funds are available. Under current law, claims cannot be paid prior to July 1. STRIVE would allow school districts to establish a program benefiting taxpayers who are 60 or older and provide volunteer service to their school district through a reduction in their property taxes. The volunteer services provided by participants in the program may not replace or supplant existing job positions and school districts would be permitted to seek private and public funding sources to support the program.
The bill now goes to the full Senate for a vote.
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Plan Introduced to Extend Additional Emergency Relief for Local Taxpayers
Sen. Scott Martin (R-Lancaster) introduced Senate Bill 1125, which would offer more flexibility for discounts and payments of school property taxes. Martin was the prime sponsor of legislation signed into law by Gov. Wolf last week to give county and municipal governments the option to extend deadlines for property tax discount rates to any date up until Aug. 31, and waive any fee or penalty for late payments of property taxes if paid in full by the end of the year.
Senate Bill 1125 takes a similar approach to school property tax legislation. The bill would give each school district the option to extend property tax discount periods and remove penalties for late payments through June 30, 2021. The bill would give school districts the power to help more taxpayers who are struggling financially in the wake of the COVID-19 public health emergency, Martin said.
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Wolf Vetoes Telemedicine Bill Over Abortion Language
As promised, Gov. Wolf vetoed legislation that would have expanded telemedicine in the state because of language inserted in the bill in the state House that would have barred those services from prescribing an abortion drug.
In his veto message Wolf, noted that he supported the original version of the bill, sponsored by Sen. Elder Vogel (R-Beaver). As originally induced, Vogel’s bill would require private insurers to cover telehealth services and that they be reimbursed at the same rate as in-person care.
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Pennsylvanians Encouraged to Use Electronic Filing Options
The Department of Revenue (DOR) is encouraging Pennsylvanians to take advantage of user-friendly electronic filing options for their Pennsylvania personal income tax returns (PA-40s). Even though the deadline for filing 2019 tax returns has been extended to July 15, 2020, due to the COVID-19 pandemic, filing electronically now is a good option, including for Pennsylvanians who are expecting a tax refund.
Despite offices being closed, the DOR is processing the majority of personal income tax returns that it receives electronically. The processing of paper returns and paper check payments submitted during the office closure will be delayed. For more information visit the Department of Revenue’s website.
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