Per the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), the credit for increasing research activities is now a permanent R&D credit. The PATH Act also contains provisions that allow for qualified small businesses (QSBs) to claim the credit against social security taxes paid by the employer up to $250,000 for tax years beginning after 12/31/2015. This credit may also be claimed against alternative minimum tax (AMT).
Who Can Benefit?
Any taxpayer that is a QSB may benefit from the advantages of the PATH Act. In order to qualify as a QSB, a taxpayer must have gross receipts of $5 million or less for the tax year in which the credit is being claimed. The taxpayer also must not have any gross receipts for any tax-year preceding the five-tax-year period ending with the credit year. This credit is particularly beneficial for small startup businesses that do not have income tax liability to offset the credit.
What Qualifies as an R&D Expenditure in the Construction Industry?
In order to qualify as an R&D expenditure, activities must meet a four-part test. The activity must:
- Have a permitted purpose
- Eliminate uncertainty
- Be technical in nature
- Include the process of experimentation
Some examples of activities that generally qualify as R&D expenditures include developing prototypes, modeling, experimentation with new building materials, and design work for energy efficient projects.
More Information
For more information on the qualifications and benefits of this tax credit, please reach out via email, give us a call at (401) 921-2000, or fill out our online contact us form.
Sustainability and social responsibility have become increasingly important in making businesses more profitable, attracting new customers and employees, and gaining a competitive edge. In a world ever-more focused on the environment and going green, businesses of all sizes can experience the benefits of sustainability changes. Rhode Island is no exception to this trend, as is apparent with the recent implementation of the Transparency and Sustainability Standards for Rhode Island Businesses Act (‘the Act’).
What Does The Act Entail?
On January 1, 2020, the Act became effective, allowing businesses to voluntarily set their own sustainability rules and guidelines. Rather than setting industry-wide standards, the Act allows businesses of all sizes and industries to make sustainability changes using individually-based goals. The legislation encourages transparency and commitment by requiring participating businesses to report on their efforts each year, enabling the public to see incremental progress and implementations.
The Rhode Island Manufacturers Association strongly believes in the concept of corporate responsibility and the benefits that it brings to the community. Research shows that investors, customers, and employees are now more interested in businesses that care about the environment and are taking actions to demonstrate their commitment to sustainability and ethical business practices.
Small Changes for Big Results
The manufacturing sector is one of the most relevant industries when it comes to making changes to meet social impact demands. Rhode Island businesses, like CVS, Toray Plastics, and General Dynamics, have been demonstrating their efforts for years and have seen massive benefits by taking environmentally-conscious measures, such as reducing packaging and water waste, recycling, minimizing the use of toxins, and composting.
Changes do not have to be big. Small changes, like using more efficient light bulbs and upgrading windows for improved heating efficiency, can help reduce energy usage. Other changes, such as reducing single-use plastics and putting a larger emphasis on recycling, are effective ways to cut down on waste.
Benefits
Operating an enterprise with a sustainable mindset has many benefits, in addition to protecting the environment. It is also great for business because it provides a competitive advantage in attracting new investors, customers, and employees. It strengthens the reputation of a business by demonstrating its transparency, and builds trust amongst its community and customer base. Another benefit is that it can reduce costs and increase efficiency. Regardless of industry or size, making small shifts towards a more sustainable operation can reap tremendous benefits for both producers and consumers.
It has become increasingly important for today’s businesses to evolve with the changing demands of the marketplace and to become more invested in their efforts of corporate responsibility towards the environment. The good news is that it seems to be catching on.
If you have any questions regarding sustainable business in Rhode Island, please reach out via email, give us a call at (401) 921-2000, or fill out our online contact us form.
In March, 2020, Congress appropriated $100 billion to provide “general” and “targeted” relief to healthcare providers financially impacted by the novel coronavirus pandemic. The general relief portion is expected to total $50 billion.
As of April 24, 2020, $30 billion of the general relief funds had been automatically disbursed by Heath and Human Services (HHS) to all healthcare providers that had Medicare Fee-For-Service Payments (Parts A and B) in 2019. No application was required to receive these funds. These funds did not have to be repaid if the provider meets certain terms and conditions, including being able to demonstrate that lost revenues and increased expenses due to the COVID-19 pandemic equaled or exceeded the funds received. However, providers did need to go online within 30 days of receipt and sign an attestation form electing to keep these funds.
Round Two Funding Requirements
Any provider that received a payment from HHS during the first round is now eligible to apply for additional funds from the remaining $20 billion of general relief funding. Unlike the first round of disbursements, healthcare providers will have to apply for round two funds, and provide data on their annual revenues and estimated COVID-related expenses on or before June 3, 2020. To be eligible for round two funding you must meet the following requirements:
- You must have already received a payment during round one.
- You must have billed and received Medicare Fee-For-Service Payments in 2019 and not are not currently terminated from participation in Medicare, or precluded from receiving payments from Medicare Advantage or Part D; and you are not currently excluded from participating in Medicare, Medicaid, and other Federal health care programs and your Medicare billing privileges are not currently revoked.
- You must attest to having received that payment via the Provider Attestation Portal, and agree to the Terms and Conditions on the attestation portal.
- You must have filed tax returns for the years 2017 and 2018, if one was required.
Round Two Funding Application
You will need to have the following ready to submit as part of the application process:
- The Taxpayer Identification Number of the entity applying for relief funds;
- Your estimated revenue losses in March and April 2020 due to COVID-19;
- A copy of your most recently filed federal income tax return, either 2017, 2018 or 2019;
- A listing of the taxpayer identification numbers of any subsidiary organizations, if applicable, that have received Provider Relief Funds but that do not file separate tax returns.
Lost revenue can be estimated by comparing the organization’s March 2020 and April 2020 revenue to your March and April 2019 revenue. You can also use budgeted revenue figures for March and April 2020 that would have been expected had the pandemic not happened, and compare that to your actual figures for those months. The only requirement is that a reasonable method of estimation is used.
Other Resources
If you did not receive a payment from the general relief distribution in round one, you may still be eligible to receive assistance through “targeted” relief distributions. The eligibility requirements for the receipt of targeted funds, and a comprehensive description of the CARES Act Provider Relief Program can be found here.
If you have any questions regarding the CARES Act Provider Relief Funds, please reach out via email, give us a call at (401) 921-2000, or fill out our online contact us form. For further information regarding COVID-19 assistance programs, please visit our COVID-19 Resources page.
Supply chains around the world continue to be affected by the COVID-19 crisis; some countries have been shut down entirely. However, outside of this pandemic, minor short-term supply chain disruptions occur for a variety of reasons—natural disasters, raw material shortages, factory fires, and more. Manufacturers with concentrated supply chains experience the highest level of risk for compromised operations because their ability to procure raw materials or manufactured goods can be directly impacted by uncontrollable factors. Mitigating this risk should be a key consideration when making decisions on where to source materials or products from in the marketplace.
Why Diversifying Suppliers is Key
Diversification of a supplier portfolio can protect a company from supply line shutdowns. The simplest form of diversification is finding at least two suppliers that can provide the same, or similar, product and keeping working relationships with both to prepare the additional sellers to ramp up production in case of increased need. Beyond supplier diversification, some manufacturers benefit from sourcing production supplies from a variety of geographic areas, given the potential environmental risks, including winter storms, wildfires, and earthquakes, that can interrupt transportation routes and facility operations.
Geographic concentration can pose more than just environmental threats. Manufacturers attracted to the cheap cost of labor overseas often utilize vendors in areas where foreign governments, or other relevant parties, have significant influence over industry supply chains, which may expose production to significant, unexpected delays. While these are the more common examples that indicate the importance of diversification, there are many instances, specific to certain industries, where supply chains can be put at risk without a broad supplier pool.
Additional Considerations
Spreading supply resources mitigates risk, but there are also potential costs to consider. A company may not reach the thresholds required to receive quantity discounts if it parcels out orders from multiple suppliers. Additionally, ordering a manufacturing module from multiple suppliers may result in varying quality standards. A cheaper vendor is good, unless it costs more in manufacturing errors, spoilage, or additional wear on equipment. These common factors must be weighed against expanding the supplier mix. Successful company managers will strive to achieve a balance between supply chain risks and keeping production up to the required standards.
If you have any questions regarding diversifying your supply chain, please reach out via email, give us a call at (401) 921-2000, or fill out our online contact us form. For further information regarding COVID-19 assistance programs, please visit our COVID-19 Resources page.
The Families First Coronavirus Response Act (FFCRA) requires employers to provide paid leave to employees under two circumstances: the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Leave Expansion Act (Expanded FMLA). The EPSLA entitles workers up to 80 hours of paid sick time when they cannot work for reasons related to the coronavirus and the Expanded FMLA provides paid leave for when an employee or one of their family members become sick. Employers subject to these provisions are provided relief under the FFCRA and can receive fully refundable tax credits to cover the cost of providing paid leave to their employees. Additionally, employers can claim these credits on their 941 quarterly payroll tax filings.
FFCRA Eligibility
Eligible leave under FFCRA is related leave taken between April 1, 2020 and December 31, 2020, and applies to businesses with fewer than 500 employees. For more complex entities (joint employers) and situations (temporary labor and jointly employed individuals), the Department of Labor can help determine eligibility. Once a business determines eligibility, it should determine what expenses qualify for the tax credit. Qualified leave wages (both sick leave and family leave), qualified health plan expenses, and an employer’s share of Medicare tax are the expenditures identified by the IRS as eligible for tax credit. Below is a list of qualifications for leave eligible for required pay, as defined by the IRS:
- The employee is under a Federal, State, or local quarantine or isolation order related to COVID-19;
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
- The employee is caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19, or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- The employee is caring for the child of such employee if the school or place of care of the child has been closed, or the child care provider of such child is unavailable, due to COVID–19 precautions;
- The employee is experiencing any other substantially similar condition specified by the U.S. Department of Health and Human Services.
Payment
The amount of required leave to be paid to employees, and the related tax credits, can vary depending on the reason the employee is taking leave. However, the maximum required paid sick leave an employee can receive over a two-week period is $5,110 and the maximum required family paid leave is $10,000 over a ten-week period. The tax credits for qualified health plan costs and employer Medicare tax are directly related to the employees being paid the required paid leave.
For additional information about the required paid leave payroll tax credit provisions and eligibility, please reference the IRS or Department of Labor websites.
If you have any questions regarding paid leave or the credit process, please reach out via email, give us a call at (401) 921-2000, or fill out our online contact us form. For further information regarding COVID-19 assistance programs, please visit our COVID-19 Resources page.
Help is on the way for the commercial fishing industry, as the Secretary of Commerce has allocated $300 million in CARES Act funding assistance for fisheries.
Funding Eligibility
This funding is being provided directly to coastal states, tribes, and territories, and NOAA Fisheries will grant awards for spending plans submitted by interstate marine fisheries commissions and states. These spending plans must address direct or indirect fishery-related losses, subsistence, cultural, and ceremonial impacts related to COVID-19. The spending plans can include direct payments, infrastructure, and education. In line with Sec. 12005 of the CARES Act, this funding is designed for companies that have economic revenue losses greater than 35 percent, as compared to the prior five-year average. Eligible participants for these spending plans can include fishing businesses (i.e commercial, charter, for-hire), qualified aquaculture operations, processors, dealers and certain other fishery-related business. Certain businesses in the supply chain (i.e. vessel repair, restaurant, retailers) are not considered fishery-related business for purposes of this assistance. Over $28 million of this assistance is expected to be made available to Massachusetts, over $3.2 million to Rhode Island, and over $1.8 million to Connecticut. These amounts were determined proportionately based on readily available total revenue.
Securing Funding
Fishing industry companies should contact their state marine fisheries management agencies to understand their eligibility and procedures for applying for these funds. The states have been given some discretion in determining eligible companies, so contacting the specific management agency is important. Direct payments to companies are available if they meet the requirements of the CARES Act and are a part of an approved spending plan. There are expected to be less barriers to disbursement from this assistance, as the Secretary of Commerce does not have to declare a fishery disaster, and the awards can be made on a rolling basis.
For More Information
DiSanto, Priest & Co. is prepared to assist with any questions or concerns regarding this funding; please reach out via email, give us a call at (401) 921-2000, or fill out our online contact us form. For additional information, please visit our COVID-19 Resources page.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020, providing $100 billion in relief funds to hospitals and healthcare providers on the front lines of the coronavirus response, amongst other provisions.
The CARES Act created the Provider Relief Fund, which reimburses healthcare providers for lost revenues and increased expenses due to the COVID-19 pandemic. The funds are being distributed by the Health Resources Service Administration (HRSA) section of the U.S. Department of Health and Human Services (HHS).
Through this program, $50 billion in funds is available for general distribution and the remaining $50 billion for targeted distribution. These payments are grants, not loans, and will not need to be repaid if certain terms and conditions are met. A complete list of the terms and conditions for Provider Relief Fund distributions can be found on the HHS website.
General Distribution Qualifications
To be eligible for the general distribution, a healthcare provider must have billed Medicare in 2019 and provided diagnosis, testing, or care to individuals with possible or actual cases of COVID-19 after January 31, 2020. Some healthcare providers may have already received a payment from HRSA as $30 billion was distributed prior to April 24, 2020. These funds were paid in proportion to the healthcare provider’s Medicare fee for service reimbursements in 2019.
These initial payments did not require an application nor engagement activity, however, within 30 days of receiving the funds, the provider must sign an attestation confirming receipt and agreeing to the terms and conditions of payment. Should a provider choose to reject the payment, they must also complete the attestation to indicate this. If the payment is not returned within 30 days of receipt it will be processed as accepted, and in turn, the terms and conditions will be viewed as accepted as well.
For those that received general distribution payments prior to April 24, 2020, a CARES Act Provider Relief Fund Application Portal has been deployed by HHS to collect information from healthcare providers. There are four pieces of information needed to allocate the remaining general distribution funds, which can be found on the HHS website.
The remaining $20 billion of the general distribution began dispersal on April 24, 2020, ensuring the program properly allocates each healthcare providers’ share proportionally based on its 2018 net patient revenue.
Targeted Distribution Qualifications
The CARES Act also provides $50 billion for targeted distributions to:
- Hospitals disproportionately impacted by COVID-19
- Healthcare providers who treated the uninsured with COVID-19
- Rural providers
- Indian healthcare service providers
- Other healthcare providers such as skilled nursing facilities and other Medicaid providers
Eligibility details and application instructions for these distributions can be found on the HHS website along with additional information regarding the CARES Act Provider Relief Fund. Alternatively, this information is available via the CARES Provider Relief line at (866) 569-3522.
If you have any questions regarding the CARES Act or need assistance with the application, please reach out via email, give us a call at (401) 921-2000, or fill out our online contact us form.
For additional information, please visit our COVID-19 Resources page.
In this era of ever-changing guidelines addressing workplace health and safety due to COVID-19, the Rhode Island Manufacturers Association (RIMA) has set the tone for responsible and proactive solutions to keep businesses up to date and moving, and invites other manufacturers to join them.
RIMA has prioritized the importance of safety and has proposed transparent and effective changes to flatten the COVID-19 curve in Rhode Island. While best practices and protocols may change as information about the virus continues to evolve, RIMA’s devotion to their community of businesses and industry workers remains their top priority. To keep this promise, they have created the RIMA Manufacturers Pledge and Response and request Rhode Island manufacturing companies sign it to certify their compliance with COVID-19 safety precautions and policies.
Why Should You Back This Initiative?
Once a company signs this pledge, RIMA offers to review and assess the company’s procedures in terms of effectiveness in stopping the spread of the virus. This review would help confirm a company’s compliance with the enhanced COVID-19 safety measures mandated by Governor Raimondo. Examples of these enhanced safety measures include controlling site traffic, rigorous hygiene routines, social distancing, and improved communication.
The Review Process
The review has several phases, beginning with an internal assessment of the effectiveness of the plan, which includes virtual and visual reviews, and ultimately culminates in a signed pledge to certify compliance. Phases would also include the review of documentation of proper safety procedures and the visual observation of protocols, amongst other workplace changes. RIMA may also offer recommendations to further improve worker and community safety.
The Goal
The purpose of this Pledge is to keep Rhode Island’s manufacturing plants open and running by showing that they are seriously addressing the safety and health concerns of their workforce during the COVID-19 threat. RIMA is encouraging all Rhode Island manufacturers to meet this challenge and sign the pledge by April 30. The RIMA Manufacturers Pledge and Response can be found on RIMA’s homepage in red text, along with other guidelines recommended by the CDC and RI DOH.
If you have any questions, please reach out via e-mail, give us a call at (401) 921-2000, or fill out our online contact us form.
For more information on COVID-19 and to get the latest updates, visit our COVID-19 Resources page.
Expanded Unemployment Benefits for the Self-Employed and Others
The U.S. Department of Labor recently announced the publication of the Unemployment Insurance Program Letter (UIPL) providing guidance to states for implementation of the Pandemic Unemployment Assistance (PUA) program, a provision under Section 2102 of the Coronavirus Aid, Relief, and Economic Security Act (CARES). Pandemic Unemployment Assistance provides temporary “unemployment” assistance to those individuals not traditionally eligible for unemployment benefits, and affected by COVID-19, including the self-employed, independent contractors, and gig workers.
Eligibility
Eligibility appears very broad. Section 2102 provides for payment of PUA to “covered individuals,” defined as individuals not qualified for regular unemployment compensation, extended benefits under state or federal law, or Pandemic Emergency Unemployment Compensation (PEUC), including those who have exhausted all rights to such benefits. Individuals seeking part-time employment, individuals lacking sufficient work history, or those otherwise not qualified for regular UC, extended benefits under state or federal law, or PEUC are also included. For purposes of PUA coverage, an individual “lacking sufficient work history” means an individual (1) with a recent attachment to the labor force (2) who does not have sufficient wages in covered employment during the last 18 months to establish a claim under regular UC, and (3) who became unemployed or partially unemployed because of one of the COVID-19 related reasons identified under Section 2102.
Examples of Inability to Work
Under Section 2102, reasons for an inability to work include:
- The individual has been diagnosed with COVID-19 or is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
- The individual is providing care for a family member or member of the individual’s household who has been diagnosed with COVID-19;
- A child or other person in the household for which the individual has primary caregiving responsibility is unable to attend school or another facility that is closed as a direct result of the COVID-19 public health emergency and such school or facility care is required for the individual to work;
- The individual is unable to reach the place of employment because of a quarantine imposed as a direct result of the COVID-19 public health emergency;
- The individual’s place of employment is closed as a direct result of the COVID-19 public health emergency.
A qualified individual’s benefit equals the amount the person would have otherwise received under state law plus $600. Section 2102, however, explicitly excludes from coverage individuals who can work remotely with pay and individuals who are receiving paid sick leave or other benefits (even if they would otherwise qualify for unemployment under the CARES Act).
Further Information
The process for applying for these benefits will vary from state to state. For more information on whether you may qualify for Section 2102 benefits, and how to apply, please contact the Rhode Island Department of Labor and Training or the Massachusetts Department of Unemployment Assistance.
If you have any questions, please reach out via e-mail, give us a call at (401) 921-2000, or fill out our online contact us form.
For more information on COVID-19 and to get the latest updates, visit our COVID-19 Resources page.
While challenging times can bring out the best in people, there are also individuals who view these times as opportunities to prey on those most vulnerable by trying to steal money, identities or both. The novel coronavirus (COVID-19) pandemic has caused significant disruption to both domestic and international economies and led governments to impose various forms of social, travel, and work restrictions. As a result, there are many people in our communities that are experiencing significant financial hardship. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was recently signed into law and is designed to bring assistance to those in need.
One of the items included in the CARES Act is a direct stimulus payment (economic impact payment) to individuals, married couples, and children who qualify. The CARES Act provides direct payments of up to $1,200 for single filers and $2,400 for married couples filing jointly, plus $500 for each child under 17. Children who are, or can be, claimed as dependents by their parents aren’t eligible individuals even if they have to file a return. Income limits apply, for single filers the phase-out range begins at an adjusted gross income of $75,000 and completely phases out at $99,000. For married couples the phase-out range begins at $150,000 of adjusted gross income and completely phases out at $198,000. 2019 tax returns, if they have been filed, will be used to determine eligibility. If a 2019 tax return has not been filed yet, the payment will be based on the 2018 return. This means that taxpayers who receive a smaller payment than they are eligible for based on 2020 income will receive the difference after filing a 2020 tax return, but overpayments due to a higher income in 2020 are not expected to be due back.
This provision provides relief for individuals and families who are struggling financially right now, however, the desire to receive this money quicker leaves people vulnerable to scammers. By keeping the following in mind, you can protect yourself, and those you care about, from falling victim to fraud:
The federal government will NOT contact you. Federal offices will NOT contact individuals directly via phone, email, or text to verify personal or bank information. If someone contacts you claiming additional information is necessary to process your economic impact payment, immediately cease communications and report the number or email address.
There is not a faster way to get the economic impact payment. If someone claims they can expedite your check, know that this is a scam. Currently, the payments are expected to go out in the next three weeks.
You do not need to pay anything! There are no processing fees involved in receiving your economic impact payment. If anyone contacts you regarding a small fee to authorize the payment, know that it is a scam.
Communicate directly with the IRS. If you’d like to set up a direct deposit of your stimulus payment, communicate only with the IRS directly. The United States Department of the Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, which will streamline distribution. If your bank information was already provided to the IRS on your 2018 or 2019 tax return, no further action will be required. If the federal government does not have your bank information, they will send a hard check to your home address.
No need to sign up or file a simple tax return. Social Security recipients who are not required to file an income tax return will not need to file a simple tax return to receive a payment. Rather, the economic impact payments will be automatically deposited into your bank account, as is the case with the normal monthly payments received.
Watch out for fake checks! Some people have reported the receipt of economic impact checks in the mail for odd amounts, including ones with cents. It is going to take the United States Department of the Treasury a few weeks to mail out hard checks, so if you receive one too early, it is likely a scam. Also, these early, fake checks may ask you to verify the check online or by calling a certain number; these are signs of a scam!
If you do identify any coronavirus-related scams, you should report them to the Federal Trade Commission.
Hopefully, the information above will provide you with the awareness and information that you need to avoid falling victim to a scam related to the economic impact payments. We are all in this together, and together we will make it through this stronger than ever. If you have any questions related to the economic impact payments and/or the CARES Act, our team of professionals stands ready to assist you. Please give us a call at (401) 921-2000, or fill out our online contact us form.
For more information on COVID-19 and to get the latest updates, visit our COVID-19 Resources page.