Week Ending Dec. 18, 2020

Dec 18, 2020


Season’s Greetings!

As we close out a challenging and tumultuous 2020, the PICPA and its government relations team thanks you, our more than 20,000 members, for your unwavering support of and commitment to our advocacy efforts in Harrisburg and across Pennsylvania. This past year will undoubtedly be remembered for the COVID-19 pandemic, the ensuing shutdowns, and a long and bitter election season that did not seem to want to come to an end. Through it all, we persevered and fought through the challenges.

The PICPA’s voice has never been stronger nor more pronounced throughout the four corners of our beautiful Pennsylvania Capitol. As the year unfolded, the PICPA continued to provide the Wolf administration, our state lawmakers, and the public with the strategic leadership and technical expertise that only CPAs can provide. The voice of the CPA profession is strong! Our volunteer-led committees played a pivotal role in our ability to be nimble in the face of an overwhelming amount of information that flooded our email boxes at the start of the pandemic. In the end, by working together we were successful in navigating the past year. You—our members—are the reason for our successes, and for that we again say thank you!

As we embark on 2021, we are optimistic about the future. A new Pennsylvania General Assembly gets sworn in on Jan. 5, followed by Gov. Tom Wolf’s budget address in early February. Undoubtedly there will be challenges—some foreseen others not—but by standing together we will thrive.

We wish you and your loved ones a happy, healthy, and safe holiday season!  

 

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We Are No. 1 ... Again

Pennsylvania courts top a national list of “Judicial Hellholes” for the second year running. In this dubious distinction, the Pennsylvania Supreme Court joins the Philadelphia Court of Common Pleas in the top position.

In its report, the American Tort Reform Foundation (ATRF) cites a pervasive liability-expanding approach that has permeated the state’s civil justice system. The report also highlights Gov. Tom Wolf’s recent veto of COVID-19 liability protections found in House Bill 1737 as part of the problem facing Pennsylvania.

“It is increasingly obvious that any statute or long-term precedent opposed by the state’s plaintiffs’ lawyers is in danger of being struck down by the Supreme Court. The list of statutory and precedential casualties has steadily grown under the current makeup of the Supreme Court,” noted Curt Schroder, executive director of the Pennsylvania Coalition for Civil Justice Reform (PCCJR). “The uncertainty created by rapid changes in liability expectations as the result of court decisions harms the economy and acts as a deterrent to employers looking to expand or establish business in Pennsylvania.”

PCCJR, of which PICPA is a member, calls on the Supreme Court to carefully consider the impact of their decisions on health care access and Pennsylvania’s economy.

 

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PICPA Federal Tax Committee End-of-the-Year Update Webinar

The Federal Tax Committee will host an End-of-the-Year Update on Jan. 20, 2021, from 10:00 to 11:00 a.m. Presenters Michael Radich, Joseph Figurelli, and Damian Gaspari will help you understand what to expect for your clients as you gear-up for tax season.

Register for the one-hour webinar today. Also, view the Dec. 16 PICPA Legislative Update webinar here.

 

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PTIN Required on PA-40 Returns Starting in Tax Year 2020

The Pennsylvania Department of Revenue (DOR) reminds tax return preparers that they will need to sign and list their IRS preparer tax identification number (PTIN) on each Pennsylvania personal income tax return (PA-40) that they prepare starting in tax year 2020.

This requirement takes effect for tax years that began Jan. 1, 2020. That means it will be applicable as tax return preparers work on their clients’ tax returns for the 2020 year. This requirement is part of Act 13 of 2019.

Under the law, a tax return preparer is a person who is paid to prepare a personal income tax return or employs one or more persons who prepare returns for compensation. Preparation of a “substantial portion” of a personal income tax return shall be treated as if it were the preparation of the return.

The law also gives the DOR the authority to impose an administrative penalty of $50 on a tax return preparer each time the preparer fails to sign a return or fails to provide their PTIN on a return. Under the law, the maximum annual penalty that can be imposed on an individual tax return preparer is capped at $25,000 per year.

 

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Updated Nexus, Apportionment Policies Issued by Philadelphia

The Philadelphia Department of Revenue will temporarily waive the legal nexus threshold that considers the presence of employees working temporarily from home within Philadelphia as establishing sufficient nexus for out-of-Philadelphia businesses. This waiver applies when an employee works from home solely because of the COVID-19 pandemic.

This temporary guidance will be in effect until the earlier of June 30, 2021, or 90 days after the Proclamation of Disaster Emergency in Pennsylvania is lifted. This policy is consistent with guidance issued by the Pennsylvania Department of Revenue regarding telework during the COVID-19 pandemic.

The special sourcing rule is an exception that applies only for the duration of the governor’s and mayor’s emergency stay-at-home orders issued in response to the COVID-19 coronavirus health emergency. 

 

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Brewster Named Winner in State Senate Race

The last state election to be called goes to the Democrats, for the moment. The Pennsylvania Department of State this week certified that incumbent Sen. Jim Brewster (D-Allegheny) defeated his opponent, Republican Nicole Ziccarelli, by a margin of 69 votes out of nearly 133,000 votes cast. Brewster won 66,261 to Ziccarelli’s 66,192.

Ziccarelli is challenging the results in federal court. At issue is 300 mail-in ballots that did not include a date. The Pennsylvania Supreme Court already ruled that the ballots can be counted. A federal appeals court refused to intervene, but Ziccarelli has appealed her case. The matter could be decided by the U.S. Supreme Court.

With Brewster in place, Republicans will hold a 29-21 majority (which includes one independent who caucuses with the Republicans).

 

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IFO Report Examines PPP Loans to Pa. Businesses

An Independent Fiscal Office report examines the impact of the Paycheck Protection Program (PPP) on Pennsylvania businesses. The report looks at the number and type of firms affected, the potential employment impact and possible tax implications. Regarding the tax implications, the IFO assumed that all loans would be forgiven and would be nontaxable.

The primary goal of the PPP was to provide economic relief to small businesses and nonprofits that had been adversely impacted by COVID-19 and related mitigation efforts, notes the IFO report.

 

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