Article Archives: 2021

Posted by: Grant Shaver · Bob Heller

For business and occupation (B&O) tax purposes, taxpayers earning apportionable revenue calculate their taxable Washington revenue by applying a “receipts factor” apportionment methodology. Taxpayers computing B&O tax in this manner are required to complete and file an Annual Reconciliation of Apportionable Income form with the Department of Revenue.

When is the Annual Reconciliation of Apportionable Income Form Due?

The form must be submitted to the Department of Revenue by October 31st of each year. Failure to timely file the reconciliation form may result in penalties.

Who Must File?

In-state taxpayers that earn income from apportionable business activities performed for customers located inside and outside of Washington may apportion such revenue to Washington for B&O tax purposes.

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Posted by: Steve Vasconcellos

Introduction

The Information Security Policy (IS Policy) is the most important security document of an organization. Ideally, it should serve as the guiding principle of an organization’s information security, providing structure and vision to ensure the organization can achieve its mission, while keeping its data safe.

The IS Policy requires a mature process to ensure its objectives are met. This article will cover the steps to creating one for your own organization.

Click here to download a more in-depth version of this piece, with a template for you to reference when building your own IS Policy.

Step 1: The Policy Statements

The IS Policy typically begins with the Policy Statements,

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Posted by: Jason Chong

There’s no amount of money you can throw at cybersecurity to create a 100%, hacker-proof environment. But even on a limited budget, there are still simple steps you can take to make your organization more secure. The following are five actions and policies you can implement on a budget to keep your sensitive information safer.

(We’ll assume you already have enterprise network firewalls and anti-virus protections in place. But if not, start there!)

Internal Security Policies

Internal security policies are a great first step for any organization operating on a shoestring budget. That’s because, for the most part, they’re free!

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When additional Employee Retention Credit (ERC) guidance was provided in March 2021, the Notices clarified wages utilized for Paycheck Protection Program (PPP) loan forgiveness are not eligible for the ERC.

We assumed this double dipping prohibition would extend to post-CARES Act COVID relief programs, such as the Shuttered Venue Operator Grants (SVOG) and the Restaurant Revitalization Fund (RRF). However, Notice 2021-49 provides guidance that indicates otherwise.

RRF and SVOG Wage Double Dipping Permitted for 2020 and 2021 Q1 and Q2

For RRF and SVOG recipients, coordination between these and the other COVID programs (PPP,

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The IRS recently released Notice 2021-49, providing long awaited guidance on many aspects of the Employee Retention Credit (ERC). One aspect relates to the timing of the wage disallowance for ERC claims.

In FAQs issued by the IRS in 2020 and reiterated earlier this year in Notice 2021-20, employers that claim an ERC must reduce their wage expense and health plan expenses (if appliable) on their income tax returns by the employee retention credit amount. However, the timing of this reduction was uncertain – is it in the year the amounts were paid or the year which the ERC claim is filed?

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Revenue Procedure 2021-33, issued by the IRS on August 9, 2021, now answers one of our biggest Employee Retention Credit (ERC) questions: Are Paycheck Protection Program (PPP) loans included in gross receipts for ERC eligibility? Based on this guidance, the answer is NO.

ERC Eligibility Refresher

As a reminder, an employer is eligible for the ERC through one of three ways during 2021:

  1. A full or partial suspension of operations due to a government order;
  2. A gross receipts decline of over 20% when compared to the same quarter in 2019; or
  3. Qualification as a Recovery Startup Business (2021 Q3 and Q4 only).

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In early August, the IRS issued two pieces of guidance on the Employee Retention Credit (ERC) – Notice 2021-49 and Revenue Procedure 2021-33. This guidance includes answers to your top questions, including:

  • Whether PPP loan proceeds are included in the gross receipts calculation;
  • Whether S-corporation owners are eligible for the ERC;
  • When the ERC credit is included on your income tax return; and
  • What method of accounting to use when calculating a decline in gross receipts.

Also included is a new provision that allows for double dipping on wages for recipients of Shuttered Venue Operator Grants and Restaurant Revitalization Fund Grants.

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Posted by: Celia Davis

For tax-exempt organizations that are currently working on filing their annual Forms 990, new rules surrounding mandatory electronic filing (e-filing) are causing quite a headache for tax professionals.

Originally enacted on July 1, 2019, the Taxpayer First Act required all tax-exempt organizations to electronically file their annual returns. Though electronic filing for exempt organization returns was available before the passage of this Act, it was mandatory only for select organizations. And several forms and scenarios were unavailable for e-filing all together, such as the Form 990-T, Form 4720, initial filers, or organizations that had a name change or year-end change in any given year.

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Posted by: Grant Shaver

As detailed in the original article published by Clark Nuber, in July 2020, the Seattle City Council passed City Ordinance 126108 establishing a new Seattle payroll expense tax that takes effect January 1, 2021.

Updates to the Original Tax

Following the passage of that ordinance, the Department of Finance and Administrative Services (FAS) conducted a rulemaking process and then published a Director’s Rule for the payroll tax. As a part of that process, FAS staff received numerous questions from businesses about how to apply the payroll expense allocation methodology included in the ordinance, especially in situations where employees split their time between work in Seattle and work in other jurisdictions.

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Posted by: Victoria Kitts

If your organization receives federal funding subject to the rules and regulations in the Uniform Guidance, make note of changes made in 2020 to the procurement standards.

Though these changes were made and, for some awards, became effective in fall 2020, many not-for profit organizations are now receiving federal grants for the first time, highlighting the need to be aware of the procurement standards contained in the Uniform Guidance.

Overview

Procurement refers to the purchase of goods or services, typically for other-than-payroll and certain non-payroll expenses. Procurement standards require entities to establish policies and procedures before making purchases with federal funding and are often more prescriptive than how a typical not-for-profit would procure goods and services

The revisions made to the Uniform Guidance this last fall are effective for new federal awards (subawards) and amendments to existing awards issued on or after November 12,

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