DOR & IRS Updates
U.S. Department of Labor Announce Online Portal for Paid Leave Eligibility
The U.S. Department of Labor (DOL) released an online portal through which workers can determine their eligibility for paid leave
under the Families First Coronavirus Response Act (FFCRA).To view the Families First Coronavirus Response Act FAQs, click here
We are in Phase 3 of out reopening plan. For more information, click here
Additional information on this will be posted here
as it becomes available.Department of Public Health (DPH): Click here
to read updates from the DPH regarding COVID-19. Division of Local Services (DLS):
For those who work with cities and towns across the Commonwealth, the DLS has a dedicated webpage that provides finance guidance to city and town officials related to the state of emergency. For more information, click here
.For urgently needed guidance, please email the DLS
Massachusetts’ January Revenue Collections Total $3.347 Billion
The Massachusetts Department of Revenue (DOR) announced its preliminary revenue collections totaling $3.347 billion, “which is $392 million or 13.3% more than the actual collections in January 2021, and $429 million or 14.7% more” than the DOR’s monthly benchmark, which was upgraded to 29.090 billion on January 15.
According to the February 3, 2021 DOR press release, “FY21 year-to-date collections totaled approximately $17.653 billion, which is $764 million of 4.5% more than collections in the same period of FY2020.”
To find a summary of the January 2021 preliminary tax collections as of February 3, click here.
Governor Baker Announces $45.6 Billion Fiscal Year 2022 Budget
Governor Baker announced a $45.6 billion Fiscal Year 2022 budget, which includes no tax increases on Massachusetts residents, commits $1.168 billion to municipalities, authorizes a withdrawal of $1.6 billion from the Commonwealth’s stabilization fund and more.
Among the proposals in the FY22 budget include, but are not limited to:
The two branches of the Legislature have begun to craft their respective Fiscal Year 2022 budgets with a goal to have a signed budget in place by July 1, 2021.
We will keep you updated on these proposals as we continue to learn more information.
Bill Filed MSCPA Calls on Legislature to Address State Tax on Forgiven PPP Income
The MSCPA worked with Senator Eric Lesser’s office to re-file SD.172, An Act providing financial relief to small businesses during the COVID-19 pandemic that will address the Massachusetts tax on the inclusion of income associated with forgiven PPP loans.
We have shared your concerns with leaders in the Legislature, Committee staff and various House members calling for swift, corrective action. In a recent interview with the Boston Globe, MSCPA President & CEO, Amy Pitter, suggested this language be amended to fast-moving legislation, such as the Governor’s Unemployment Insurance bill, so that individuals will have the critical relief available by the time their taxes are filed this season.
We are grateful to Senator Lesser and to all of the bill co-sponsors for understanding the importance of this legislation and the impact it will have on taxpayers.
We will keep you posted on all progress made.
Massachusetts Unemployment Insurance Fraud Resources
Unemployment Insurance Fraud is on the rise again.
If you believe you may have had a false unemployment claim filed using your identity, contact the DUA here or at 877.626.6800. Please stay vigilant.
For more information and resources, click here.
Accountancy Modernization Legislation Signed into Law
Massachusetts Senate bill 2941, An act to Modernize Public Accountancy
was signed into law by Governor Baker earlier this week.Focused in four parts, this legislation provides necessary technical updates that further strengthens the CPA license and positions accounting firms to adapt more easily to a changing industry.The legislation adopts key updates included in the most recent version of the Uniform Accountancy Act (UAA): a revised definition of attest, language to allow firm mobility, a revised and updated code of professional conduct and a provision to allow for non-CPA leadership of public accounting firms.A summary of the four main provisions can be found here
.We want to thank you, our members, who through the years have offered your support, guidance and outreach to your elected officials in support of this bill. This could not have happened without you.Massachusetts Tax Implications Regarding PPP Income & Expense Conformity
We have heard from a few members regarding the Massachusetts tax implications related to the inclusion of income associated with forgiven PPP loans, as well as the concerns around deductible expenses. While there was language in a bill last session that addressed the inclusion of income, the language ultimately was not adopted in the final bill.We have a commitment from a legislator to file a standalone bill to address this issue and we are working to identify fast-moving legislation that might serve as a vehicle for getting this done quickly.We will keep you posted on any progress we make.Massachusetts to Provide $668 Million in Grants for Small Business Relief
Governor Baker announced a $668 million small businesses relief fund
through which eligible businesses may receive grant money of up to $75,000 for operating expenses.The grants will be administered by the Massachusetts Growth Capital Corporation and applications opened on December 31.For more information on how to apply, click here
.Webinar Recording: MassTaxConnect Version 12 Overview
Couldn’t make it to the DOR’s webinar in November? We’ve got you covered!
Changes to MassTaxConnect are on the way in January 2021.Some of the changes include:
- A new design that makes it easier to get around;
- A more convenient third-party management screen; and
- Easily accessible account information.
To watch the presentation, click here
.New England Advocacy Coalition January Newsletter
The New England Advocacy Coalition released its January newsletter on happenings specific to each state in the New England region. To read the newsletter, click here
MSCPA Calls on Congress to Allow Deductibility for PPP Expenses
The MSCPA, along with more than 50 other CPA societies and the American Institute of CPAs, sent a letter to Congressional leadership and the Massachusetts Congressional Delegation requesting that a PPP expense deductibility provision be part of any must-pass, year-end legislative package. We have heard in recent days that a stimulus bill has potential to pass this Congress before the end of the current session and are hopeful that PPP expense deductibility will be included.Thanks to you and your efforts for taking the time to write to our members of Congress and for keeping this issue front and center. To read the letter, click here
.Amid Virus Surge, Governor Baker Revises Reopening Measures
On December 8, Governor Baker announced a series of guidelines
that returns every municipality to Phase 3 of Step 1, which will go into effect this Sunday, December 13. The guidelines are as follows:
- Implement a 40% capacity limit for retail shops, museums, houses of worship and others;
- Limit indoor dining to 90 minutes and require patrons to wear masks at all times, including while sitting at a table, aside from when eating or drinking;
- Call for “stronger mask compliance” while inside offices, gyms, restaurants and other business and communal venues; and
- Encourage people to limit the time spent with those outside of your immediate household.
To read more about the guidelines, click here
Tips for Employers to Slow the Spread of COVID-19 in the Workplace
Secretary Mike Kennealy of the Executive Office of Housing and Economic Development recently released a letter for employers outlining the guidelines in place if an employee tests positive for, or is exposed to, the COVID-19 virus.
As you’ll read in the letter, here’s how employers can help prevent and slow the spread of COVID-19:
- Review the Department of Public Health (DPH)’s information and guidance for persons in quarantine or isolation, and share it with your employees.
- Remind all employees to report instances of possible exposure and to immediately quarantine until either they receive a negative test or they self-isolate for 14 days, in accordance with the DPH guidance.
- Ensure employees who have faced possible exposure do not feel pressured to report to the workplace, whether or not they are exhibiting symptoms. Reassuring employees of their job security will help prevent virus transmission between coworkers.
- Monitor use of break rooms and warn employees of risks associated with carpooling. These settings have both been identified as hot spots for COVID-19 infections.
To read the Secretary’s letter to the business community, click here
.Governor Baker Announces $10 Million to Community Foundations for COVID-19 Relief
Governor Baker and Lt. Governor Polito announced a $10 million fund to support individuals and households experiencing severe economic hardships due to COVID-19.The money is distributed among 14 community organizations across Massachusetts and can be used for housing and utilities, food security, emergency childcare and more.For more information on this program, click here
.Governor Baker Announces Additional Restrictions to Curb COVID-19 Cases
In early November, Governor Baker released a series of executive orders aimed to “disrupt rising trends” of positive COVID-19 cases. Included in the orders and advisories are:
These advisories and orders became effective on November 6.
- Stay-at-home advisory – Instructs residents to stay home between the hours of 10:00 p.m. and 5:00 a.m.;
- Early closure of businesses and activities – Orders certain businesses, including restaurants, liquor stores, gyms and others, to cease certain sales, dine-in service and other activities at 9:30 p.m.;
- Gatherings order – Reduces the number of people allowed indoor or outdoor at private residences and orders that gatherings must end at 9:30 p.m.; and
- Face covering order – Requires individuals to wear face coverings in public at all times, including when more than six feet away from another individual.
Massachusetts 2020 General Election Results
In what is likely to be a record-setting election turnout in Massachusetts, former Vice President Joe Biden captured over two million votes to President Donald Trump’s 1 million plus votes. For a results breakdown by city and town, click here
.Massachusetts voters decided to send Senator Markey and the rest of the Congressional delegation back to Washington D.C. for another term. Voters in the Fourth Congressional District elected Democrat Newton City Councilor, Jake Auchincloss, over Republican opponent Julie Hall. To read more about the Massachusetts Congressional elections, click here
.The Massachusetts House of Representatives maintained its supermajority as the Senate Democrats expanded their majority by one and now holds 37 of the 40 seats. To read more about the Massachusetts Legislature races, click here
.There were also a number of county races throughout the Commonwealth that haven’t garnered as much media attention as the other competitive races. For more information on those races, click here
.The well-funded ballot questions that commanded the airwaves for months were decided in convincing fashion. Voters overwhelmingly voted yes on Question 1, the “Right to Repair”
campaign and voted no on Question 2, on Ranked Choice Voting
.The official results will be posted to the Secretary of State’s Office webpage once all towns and cities finish counting the ballots. Once that information is finalized, you'll be able to view it here
.Massachusetts October Tax Collections a 3.5% Increase from October 2019
The Massachusetts Department of Revenue (DOR) collected $2.089 billion in October and reported that “collections are running 1% ahead of their fiscal year 2020 pace
” as a total of $9.347 billion has been collected in the first four months of fiscal year 2021.DOR Commissioner Geoffrey Snyder projects tax revenues will come in-between $25.918 billion and $28.387 billion by the end of June 2021, which represents a decline of $2.76 billion to $5.23 billion from fiscal year 2020 total collections of $29.596 billion.Massachusetts House of Representatives Meet to Close Fiscal Year 2020
The Massachusetts House of Representatives will hold a formal session to advance legislation that provides supplemental appropriations in order to finalize the fiscal year 2020 budget, which ended June 30, 2020.Outlined in the “close out bill” is:
- Language temporarily amending the Unemployment Insurance (UI) law to align with the availability of additional UI benefits, which will be mostly paid for by the federal government;
- $62.6 million to the Group Insurance Commission;
- Appropriations for workforce development programs; and
- $727,170 reimbursement funds for municipalities for early voting costs associated with the March 3 presidential primary elections.
To read the supplemental bill and all provisions outlined in the legislation, click here
.Governor Baker Launches $115 Million Economic Stimulus Program for Massachusetts’ Small Businesses
Governor Baker released an economic stimulus program
aimed at assisting struggling small businesses with various expenses including payroll costs, rent and personal protective equipment.As part of a $50.8 million grant program included within the stimulus package, eligible businesses may receive grants of up to $75,000
, which are made available through the Massachusetts Capital Growth Corporation.Applications for the small business grants are accepted until 12:00 p.m. next Thursday, November 12.To apply for a small business grant and for more information on the grant program, click here
.New England Advocacy Coalition November Newsletter
The New England Advocacy Coalition released its November newsletter on happenings specific to each state in the New England region.To read the newsletter. click here
.IRS: Renew Preparer Tax Identification Numbers
In preparation for the 2021 tax season, the IRS is encouraging tax preparers to renew their PTINs before the December 31, 2020 expiration date.For more information, click here
.Governor Baker Releases Updated Fiscal Year 2021 Budget
In October, Governor Baker released an updated budget
for Fiscal Year 2021 based on revised revenue estimates. The $45 billion budget raises no taxes, ensures no budget cuts and projects a roughly $3.6 billion revenue shortfall than what was originally forecasted in January 2020 prior to the COVID-19 pandemic. The new budget comes a week after an economic roundtable coordinated by the Joint Committee on Ways and Means and the Executive Office for Administration and Finance. The Governor’s new budget provides better context of the fiscal state of the Commonwealth for lawmakers as they continue their own discussions on how to best craft a budget for the remaining months of the current fiscal year.The revised budget calls for a withdrawal of up to $1.35 billion from the Commonwealth’s Stabilization Fund, a figure that could be reduced based on whether tax collections exceed expectations. According to the fiscal overview provided by the Governor’s office
, the budget is built to absorb the “income tax rate decrease from 5.05% to 5% effective January 1, 2020” and proposes a one-year delay for the state charitable deduction scheduled to begin January 1, 2021.Also included in the Governor’s budget are sales tax modernization provisions that would:
- Require that vendors file returns for the sales and use tax, the local option meals excise and the room occupancy tax within 30 days after the relevant filing period;
- Require vendors to remit an initial payment of the sales and use tax, the local option meals excise and room occupancy tax, if said vendors collected more than $150,000 in the previous year;
- Require(s) third-party processors (predominantly credit card companies) to remit to the Commonwealth on a daily basis, the portion of a sale that is attributable to sales tax, with an effective date of July 1, 2024; and
- Impose civil penalties on those who sell or install "zapper" software, which is software that falsifies the electronic records of electronic cash registers and other point-of-sale systems.
The Governor also included language relative to partnership audits
, which would enable the Department of Revenue (DOR) to collect tax from partnerships or from individual partners in cases where the partnership accounts for the federal tax as a result of changes in federal partnership auditing rules in order to avoid significant revenue loss.The legislature will debate the Governor’s revised budget and will likely offer its own budget sometime after the November 3 elections.Massachusetts Primary Election Results U.S. Senate
There were a few hotly contested races on the September 1 Primary Election Day, but none more than that between incumbent Senator Ed Markey and challenger Congressman Joseph Kennedy III. After a year-long campaign, Senator Markey bested Congressman Kennedy with around 55% of the vote. On the Grand Old Party (GOP) side, Attorney Kevin O’Connor defeated Dr. Shiva Ayyadurai with 59% of the vote. Senator Markey and O’Connor will face each other in the November 3 general election.Massachusetts First Congressional District
In a race at the First Congressional District that caught the eye of national media outlets in the last few weeks, Congressman Richie Neal, chairman of the House Committee on Ways and Means, defeated Alex Morse, mayor of the City of Holyoke. While Congressman Neal won with almost 59% of the vote, this was said to be his most challenging primary to date. Many suspect that 31-year-old Mayor Morse will be around elected politics in Western Massachusetts for years to come.Massachusetts Fourth Congressional District
About 1,000 votes between the top two candidates in a seven-person race in the fourth Congressional District, currently represented by Congressman Kennedy, will decide the Democrat party’s nominee for the November general election. In a race that is still too close to call, Jake Auchincloss, Newton city councilor, and Jesse Mermell, former president of the Alliance for Business Leadership, both hope to be their party’s nominee to face off against the Republican nominee, Air Force veteran, Colonel Julie Hall (Ret.).WBUR has a full list of election results including additional contested congressional and county races. To learn more, click here
Fiscal Year 2020 Closes $3 Billion Short of 2019 Projections
The over $4 billion in tax collections for the month of July was a welcomed surprise, but the close of the fiscal year fell around $3 billion short of the revenue projections set in 2019. About half of the July collections will help close the $3 billion budget gap and the other half will go towards crafting the FY21 budget. As many sectors of the economy continue to struggle and with the virus promising to stay around for quite some time, Governor Baker and administration officials don’t believe the July returns signify the beginning of a trend
. We will learn more about the economic status of Massachusetts once we are able to see the August and September collections, which are less likely to be as positive as July.Massachusetts to Continue Taxing Telecommuters
The Massachusetts Department of Revenue released a technical information release (TIR)
in July stating they will continue to tax telecommuters, including non-residents, to the end of this year. The declaration sparked an outcry from our New Hampshire neighbors, which led to NH governor Chris Sununu directing the NH attorney general to review the Massachusetts Department of Revenue’s TIR to ensure that NH residents are not being “improperly taxed
.”In an interview with WBUR Radio Boston last week, MSCPA President and CEO Amy Pitter agreed with Massachusetts’ approach
as any changes to this process would require employers to “jump through a lot of very complicated hoops and [rework] their payroll systems for something that’s only going to be in place for a number of months.” To listen to Pitter’s interview with WBUR, click here
. Massachusetts Legislature Releases $16.5 Billion Interim Budget to Fund State Government through October
The Massachusetts legislature announced a $16.5 billion interim budget
that will fund state government services through October 31. This proposal comes as legislators continue discussions on how to both close the FY20 budget and craft a budget for FY21. Beacon Hill leaders are waiting to see what level of federal relief, if any, comes from Washington, D.C. to assist with the budget gap.
Legislators are also discussing an extension to its formal legislative session as there are multiple high-profile bills currently being debated. As the formal session concludes tomorrow, we should know more details on the potential extension soon, and we will share that information with you when it’s available.
MSCPA President and CEO Amy Pitter will take a leading role in these discussions through her involvement with the Senate Revenue Working Group, which has shifted gears to assist in finding quality solutions for the significant economic and financial problems Massachusetts faces. Pitter is convening a group of business leaders in the next week to discuss the difficult path forward and ensure that individual taxpayers and local businesses don’t bear the brunt of tax burdens.
The MSCPA compiled a list of business community tax policy principles to guide these discussions. To read the principles, click here
There are several major initiatives waiting for action before the legislature breaks in August. For a summary of the “nine Issues to watch over the next nine days,” please click here
.Senate GOP Unveils the $1 Trillion HEALS Act
In August, the Senate GOP unveiled its HEALS Act
, a $1 trillion piece of legislation that would send payments of up to $1,200 to qualifying individuals, providing funds for school openings, bolstering unemployment assistance and more. The legislation does not provide funding for state and local governments, a main policy point for democrat lawmakers in the House and Senate.In May, the U.S. House of Representatives passed the $3.2 trillion HEROES Act
that would also provide payments of up to $1,200 to individuals, as well as funding for community hospitals, COVID-19 testing, state and local governments and much more. Now that the Senate and the House have produced each of its own federal relief legislation, leaders in each branch of Congress will begin discussions to find a compromise on a final bill.
We hope that both branches of Congress and the White House find a compromise that would provide much-need relief to state and local governments before drastic measures are taken.
Read the key differences of both federal relief bills here
The MSCPA led the charge of 28 state societies of CPAs advocating for federal funding for state and local governments. To read our letter to congressional leadership, click here
.Governor Baker Implements Travel Order Effective 8/1
As the number of COVID-19 positive cases begins to increase, Governor Baker issued a travel order to all visitors, including residents returning to Massachusetts, to complete a Massachusetts travel form and requiring them to quarantine for 14 days or produce a negative COVID-19 test. Travelers returning from lower-risk states as designated by the Massachusetts Department of Public Health are exempt from completing the form or quarantining. Failure to comply with the COVID-19 travel order are subject to a $500 fine per day.For more information, click here
.Massachusetts DOR: How Does the CARES Act Impact MA State Tax?
The Massachusetts Department of Revenue (DOR) recently released a blog post outlining the Massachusetts tax implications of the provisions in the CARES Act and how they affect individual and business and corporate tax filers.
To read the blog post, click here
To read the Technical Information Release on the Massachusetts Tax Implications of the CARES Act, click here
.IRS Lock Box Locations
The IRS recently published a 2020 Lockbox Address Directory for tax practitioners and taxpayers. Please take note that the addresses to mail returns varies by form and whether or not a payment is included with the returns.
Uniform Accountancy Act (UAA) Model Rule Change to Support CPA Evolution
The AICPA and National Association of State Boards of Accountancy (NASBA) leadership recently proposed changes to the Uniform Accountancy Act (UAA)
to ensure the CPA credential reflects the rapidly changing landscape of the accounting profession and the necessary skills CPAs need today and will need in the future. The exposure draft issued by NASBA
updates the educational requirements that create more flexibility and consistency and would:
Massachusetts Economists: Q2 Will be Worst in Recorded History
- Align the UAA Model Rules with what many state boards of accountancy are already requiring today;
- Recognize the large role technology plays in the CPA profession today;
- Help students in their pursuit of 150 credit hours by expanding the number of credit hours that can be earned through internships; and
- Clarify the role that accreditation plays when a state board of accountancy is reviewing a candidate's transcript.
The MassBenchmarks Editorial Board, comprised of leading economists and financial experts in Massachusetts, recently suggested that the Q2 of 2020 is likely to be the worst financial quarter in recorded Massachusetts history
. Between March 15 and May 30, the Department of Unemployment Assistance received over 1.4 million new claims, representing one-third of the Massachusetts workforce and led to a 15% unemployment rate in April.
Economic recovery will be largely based on public health data, employee comfortability to return to work, financial assistance from the federal government and whether a second wave of the virus hits in the future. MassBenchmarks advises against making cuts to services that would have long-term ramifications, put more people out of work and on unemployment. Solutions provided to bridge the gap include tapping into existing reserves and raising taxes temporarily.
Separately, but on a related note, the Boston Globe Editorial Board
this week called for the state to borrow through bonding to avoid budget cuts and increased taxes.U.S. Congress Passes Paycheck Protection Program Flexibility Act of 2020
In an unanimous vote last night, the U.S Senate passed the Paycheck Protection Program Flexibility Act of 2020
. The legislation, which moved through the U.S. House of Representatives last week, creates more flexibility for borrowers
and extends the time period for businesses to use the funds from eight weeks to 24 weeks, and changes the ratio from 75/25 to 60/40 for payroll to other fixed costs. Other updates include:
- Extending the repayment period to a minimum maturity of five years after application for forgiveness with a remaining balance;
- Access to payroll tax deferment for businesses that received PPP loans; and
- Extending the rehiring deadline to align with expiration of enhanced unemployment insurance benefits.
The bill now goes to the President's desk for his signature.
To learn more about the details in the legislation, click here
MSCPA Legislative Brief
This newsletter offers information and resources available through the federal and state governments regarding business loan programs, updates from the Departments of Labor and Health, and news as it relates to the impacts of COVID-19 on the accounting profession, the economy and the Society. Check out past issues here
.Coronavirus Resource Center for CPAs
For a full list of Massachusetts relief programs and professional resources, please visit the MSCPA’s Coronavirus Resource Center for CPAs