In January, 2021 our Executive Committee participated in a presentation with PRINTING United Alliance ( PrUA ) President, Ford Bowers. In it, Bowers outlined his vision in regard to the affiliate, national relationship. While we understand Ford’s reasoning, it is a direction that we believe would eventually eliminate or reduce our capacity to provide many of the local services, industry connections, networking, and value that is the core of our relationship with you, our members. Additionally, the proposal called for a commonality of services offered across the country which, in our opinion, doesn’t recognize the unique value that each of the affiliates bring to their members. After a thorough review of the Printing United Alliance (PrUA) proposal, The Board of Directors of PGAMA, voted unanimously to reject the proposal and instead asked that both parties go back to the agreement in place, or craft a new mutually acceptable agreement. That offer was rejected by PrUA on March 12, 2021 and they unilaterally ended our relationship as of April 30, 2021. What does this mean to PGAMA members? Services that have been provided through our national affiliation including Environmental Health and Safety and National Government Affairs and Advocacy, are of importance to some of our members and be assured that steps are already being taken to replace and even enhance such services. Existing programs like PrintEd, Wage and Benefit Survey, FSC and SFI certification, Printers 401K, Printers Disability Trust and Print Access, as well many of our buying programs and member benefits, are under the auspices of the regional print associations, not the national organization, and will remain so. You have our pledge of a redoubled effort to continually search for ways that we can support your company and bring additional value to your membership. As always, we encourage you to connect with PGAMA for any business and industry questions and concerns. PGAMA was an early proponent of the merger of PIA and SGIA into Printing United Alliance and we were excited thinking about the possibilities that would result from the bringing together of these iconic brands and welcome into our organization print communities, that had, until this point, never had regional affiliation or representation. PGAMA continues to support the concept of a united industry on a local, regional and national level and hopes that somehow the path that PrUA has chosen is only temporary. We are in the process of scheduling a webinar to answer any and all questions you may have. You can send your questions ahead of time to me,This email address is being protected from spambots. You need JavaScript enabled to view it.or call my cell 443-799-6767. Very truly yours, Jay Goldscher, President of PGAMA

This information comes from PGAMA member,This email address is being protected from spambots. You need JavaScript enabled to view it., CPA, CVAThe Becker Group/TMDL CPA’s Dir line 443-569-4616,This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Employee Retention Tax Credit

Another Federal Government program to help employers through the pandemic by providing a significant payroll tax reduction based on # of employees in a quarter.

Eligibility for 2021:

1)Sales reduction:

-To receive a tax credit based on # of employees in Q1 2021,

must have at least a 20% decrease in sales (same definition of sales as for PPP 2)in either Q4 2020 vs Q4 2019, or Q1 2021 vs Q1 2019.

-To receive a tax credit for Q2 2021, must have at least a 20% decrease in sales in either Q1 2021 vs Q1 2019, or Q2 2021 vs Q2 2019

-To receive a tax credit for Q3 2021, must have at least a 20% decrease in sales in either Q2 2021 vs Q2 2019, or Q3 2021 vs Q3 2019

-To receive a tax credit for Q4 2021, must have at least a 20% decrease in sales in either Q3 2021 vs Q3 2019, or Q4 2021 vs Q4 2019

2)# of employees must be less than 500

3)If donot meet the sales reduction requirement, can also be eligible if company was required to partially or fully suspend operations in 2020 by order of your state or local government.

Tax Credit:

Calculation: Up to $7,000 per employee per quarter based on quarterly gross wages for each employee per quarterly payroll tax Form 941 plus employer paid health care costs (maximum payroll cost of $10,000 at 70%)

Example:  if 20 employees are reported on Form 941 for Q1 2021 that each earn at least 10,000 including health care costs for the quarter, then credit for Q1 2021 is $140,000 ($200,000 x 70%,or 20 x $7,000).

If payroll stayed the same for each quarter in 2021, then thetotal credit for 2021 will be $560,000 ($140,000 x 4 quarters).

How to access the tax credit:

-The credit is a line item on the quarterly payroll tax return Form 941. This credit is refundable and will paid to your company by the IRS.

Or, in anticipation of receiving the credit, you may stop remitting payroll tax deposits in a quarter up to the projected credit amount, therefore $$ will be obtained immediately. Also, any available credit can be applied to the next quarter to allow for stoppage of payroll tax deposits in the next quarter in lieu of waiting for an IRS refund check.

Also, if payroll tax deposits are stopped and there is still a projected quarterly credit available, you can file Form 7200 to receive the credit in advance of filing Form 941.

Other Rules:

-If you acquired a company in 2021, can include acquired company’s sales into the 2019 quarterly sales calculation.

-No double-dipping of wages and health care costs: If $10,000 is used for the quarterly credit calculation, then cannot use the same $10,000 for the PPP2 loan forgivenesscalculation.

Note: it is expected that this limitation will not adversely affect the forgiveness calculation since there are 24 weeks available in the covered forgiveness period with the requirement that at least 60% of the loan amount be used for payroll costs, and supplier costs are now eligible to help fulfill the 40% requirement. Also, wages in 2021 prior to the receipt of thePPP2 loan can be used in full for the credit calculation.

-Covid related sick leave reimbursed by the IRS is excluded from wages for the credit calculation.

Eligibility for 2020:

-Must have a 50% decrease in sales vs 2019 (quarter vs quarter).

-Maximum Credit is $5,000 per employee per year (not per quarter) and calculated at a maximum payroll cost per employee of $10,000 x 50%.

-Can file retroactively by amending Form 941 and filing Form 941-X. Wages submitted for PPP1 loan forgiveness can be modified to take maximum advantage of the creditandloan forgiveness without resubmitting the forgiveness application.

Note: the above rules for 2021 are subject to change upon guidance yet to be released by the  IRS (as of March 22, 2021).

This year has been an interesting and challenging year. Due to Covid-19 there have been economic stimulus payments, Payroll Protection Loans, and new regulations by the CARES Act, the Disaster Act, and SECURE Act. Many of these rule changes have affected taxpayers by extending previous expiring provisions, changing retirement rules, charitable contribution deductions, and much more.
We will highlight some year-end tax planning that may help you to lower your tax bill for 2020.

• NOL-If you expect a business loss in 2020, you will be able to carry back 100% of the loss to the prior 5 years. If you carry an NOL into 2020, you can claim a deduction for 100% of your 2020 taxable income.

• MD Tax Benefit -MD has implemented a workaround for the $10,000 itemized deduction state tax limitation. You may elect to be taxed at the entity level for an S Corp, Partnership or LLC. Taxes will need to be paid before year-end. Please contact us for further information.

• Establish a Retirement Plan -If you do not already have a retirement plan set up for your business this is a good time to consider your options. The SECURE Act offers an additional incentive for establishing a retirement plan in 2020 in the form of a credit up to $5,000. Please let us know if you would like to discuss the many options available to small businesses.

• Bonus Depreciation -100% first-year bonus depreciation is still available for qualified new and used property that is acquired and placed in service in 2020. Consider making any additional acquisitions between now and the end of the year.

• Heavy SUVs, Pickups or Van Depreciation -100% bonus depreciation is allowed on qualified vehicles used over 50% in your business. It is available to SUVs, pickups or vans that have a Gross Vehicle Weight over 6,000 pounds.

• First-Year Depreciation of Cars, Light Trucks & Light Vans -There are still limits on new and used passenger vehicles acquired and placed in service in 2020, the limits are $18,100 for Year 1, $16,100 for Year 2, $9,700 for Year 3 and $5,760 for Year 4 and after.

• Section 179 Deduction -For qualifying property placed in service in 2020, the maximum deduction is $1.04 million. The phase-out threshold in $2.59 million.

• PPP Forgiveness -As of this letter, the IRS wants to treat the expenses paid by the loan proceeds as non-deductible, therefore creating taxable income on the forgivable portion of your loan. This is counter to the intent of the forgivable loan but only Congress can stop this. We are hopeful that Congress will act within the next month or two ... Stay tuned!! Also, to certify the forgivable portion of your loan with your bank, you have 10 months from the end of your selected covered period (8 weeks or 24 weeks after loan proceeds were received). For most companies, this will be around April or August 2021.

Questions?  Contact Bart Krupnick 44-569-4624 or This email address is being protected from spambots. You need JavaScript enabled to view it.