May 6, 2020
COVID-19 Government Relations Summary
The following is information and updates since our May 1st COVID-19 Daily Summary. There is short notice information below regarding 1099 Workers Unemployment Benefits and Employer Retention Credit/PPP. Readers are encouraged to look at previously daily summaries cataloged in our electronic library.
ICPAS QIK TAKES
Responses to FAQs
Question : Has the Illinois Department of Financial and Professional Regulation modified Continuing Professional Education Requirements for CPAs in light of the COVID-19 Pandemic?
Discussion: The Illinois Public Accounting Act Administrative Rules allows Certified Public Accountants to complete Continuing Professional Education through verifiable and non-verifiable activities. Both verifiable and non-verifiable activities can be completed outside of the traditional classroom live attendance delivery method. CPA CPE Rules are very broad offering a variety of mechanisms to complete the 120 CPE hour requirement every three years for license renewals. There are restrictions on how many hours may be earned through self-study courses, authorship of books and articles and teaching. More Information is available here.
STATE & LOCAL UPDATES
Governor Pritzker Unveils Regionalized Reopening Plan
A Public Health Approach to Safely Reopen Illinois
Governor Pritzker has announced Restore Illinois, a five-phase plan focused on saving lives, livelihood, and safely reopening Illinois. The five-phase plan is based on regional healthcare availability and recognizes the distinct impact COVID-19 has had on different regions of our state. The Illinois Department of Public Health’s 11 Emergency medical Service Regions have been consolidated into four health regions, each with the ability to independently move through a phased approach. See Restore Illinois Plan.
Scrivener's Note: It is important to recognize that the Restore Illinois Plan is a blueprint. More details will be released as data becomes available.
State Asks Supreme Court To Settle Executive Order Issue With Finality
The Attorney General on behalf of the Governor has asked the Illinois Supreme Court for supervisory relief under Supreme Court Rule 383 which includes a stay of the circuit court proceedings. Under Rule 383, the Governor seeks resolution of the underlying legal issue vis-à-vis whether the Governor acted within the scope of his authority under the Illinois Emergency Management Act and the Illinois Constitution when he issued disaster proclamations and executive orders in response to the COVID-19. See AG's Emergency Motion filed with the Illinois Supreme Court.
Supplemental Record: For clarity purposes, the Governor’s COVID-19 Executive Orders remain in force pending resolution by the Illinois Supreme Court.
Illinois Department of Employment Security
1099 Workers Encouraged to Apply for Regular Unemployment Benefits Before PUA Goes Live
The Illinois Department of Employment Security (IDES) released new instructions for 1099 workers who have lost work due to COVID-19. Workers who believe they may be eligible for new federal benefits under the Pandemic Unemployment Assistance Program (PUA) must first apply for regular unemployment insurance before applying for benefits under PUA when a new application portal open on May 11, 2020 via the IDES website. See IDES instructions.
Illinois Department of Commerce and Economic Opportunity
Essential Business FAQs & Guidelines
The Illinois Department of Commerce and Economic Opportunity (DECO) has published Essential Business & Operations FAQs. Additionally, DECO has posted Alternative Occupancy Restrictions for Essential Stores. The FAQs and occupancy restrictions help to ensure that essential businesses are compliant with successive COVID-19 Executive Orders.
Illinois Department of Insurance
Temporary Health Coverage Requirement
The Illinois Department of Insurance adopted emergency rulemaking entitled Temporary Health Coverage Requirements During an Epidemic or Public Health Emergency (50 IAC 2040; 44 Ill Reg 7766) and identical proposed amendments appear at 44 Ill Reg 6693. The rules prevent insurers of group health insurance policies and stand-alone dental plans from canceling coverage for non-payment of premiums during epidemics or public health emergencies when the Governor has issued a stay-at-home order or generally closed non-essential businesses. When such an emergency is in effect, insurers must allow employers to continue covering employees that would normally lose coverage due to layoffs or reduction in their working hours.
Paycheck Protection Program
ICPAS 4.29.20 Recording
The Illinois CPA Society hosted a webinar entitled Update PPP Funding and Main Street Lending Program. See recorded webinar.
PPP Loan Forgiveness Calculations
Treasury and SBA Guidance
The AICPA and stakeholder organizations have provided the Department of the Treasury and the Small Business Administration a list of recommendations addressing the PPP Program and loan forgiveness calculations. The Illinois CPA Society has contacted the Illinois Congressional Delegation requesting their assistance in convincing Treasury and SBA’s adoption, implementation and execution of the PPP recommendations.
If you have not already done so, you may wish to consider contacting your member of Congress and Senators Durbin and Duckworth expressing your support of the recommendations and ask them to encourage Treasury and the SBA to issue needed guidance on the PPP Program using the profession’s recommendations. You can contact your Federal Legislators through a point and click below.
PAYCHECK PROTECTION PROGRAM
Paycheck Protection Program Loan Forgiveness Services Matrix
The AICPA has developed a PPP Loan Forgiveness Services Matrix as a tool to assist CPAs navigate through various engagements or other services around documenting expenses related to PPP forgiveness. The matrix include links to sample letters for various engagement letters for various engagements and documentation along with links to guidance that CPA Firms should consider for each type of service.
Internal Revenue Service
Paycheck Protection Program
The Internal Revenue Service released Notice 2020-32 which clarifies that no deduction is allowed under the Internal Revenue Code for an expense that is otherwise deductible if the payment of the expense results in forgiveness of a covered loan pursuant to section 1106(b) of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The income associated with the forgiveness is excluded from gross income for purposes of the Code in accordance with section 1106(i) of the CARES Act.
Scrivener's Note: Bi-Partisan legislation (S. Res. 3612) is being introduced in the Senate to clarify legislative intent regarding the deductibility of expenses as outlined in Notice 2020-32. The Senate Finance Committee recognizes that the PPP legislation does not adequately express legislative intent of helping businesses and jump starting the economy with PPP Program. The AICPA Federal Legislative Team and Tax Team is working closely with the Senate Finance Committee. The Illinois CPA Society will be contacting the Illinois Congressional Delegation in support of this clarifying legislation. We will continue to keep you updated on developments in this area.
Paycheck Protection Program Repayment
Employer Retention Credit
The IRS updated its FAQs concerning the employee retention credit. The updated FAQs cover employers that received a loan under the PPP Program but opt to repay the loan by the SBA’s May 7, 2020 deadline may claim the employee retention credit after repaying the PPP Loan. See IRS FAQ 80 (updated May 4, 2020).
ICPAS GOVERNMENT RELATIONS DAILY SUMMARY LIBRARY AND COVID-19 EXECUTIVE ORDER SUMMARY