Regulatory Compliance

Federal Aid Programs  arrow_upward

NADA Releases Guide on Federal Aid Programs

MAY 7, 2020 -- Today, NADA released a short summary of federal aid programs that are available to qualifying businesses to respond to the COVID-19 crisis. Dealers should review these options with their legal and financial advisors. Read the Guide

1. CARES Act, a) Paycheck Protection Program, i) General   arrow_upward

PPP Loan Application Deadline Passes

MAY 31, 2021 -- The Small Business Association stopped accepting lender applications for new first- and second-draw Paycheck Protection Program loans. SBA has until June 30, 2021, to process those PPP Loan applications. For more information on PPP loans, see the SBA PPP FAQ.

To date, the SBA has approved some 11.8 million loans to the tune of $800 billion. Loan data specific to franchised dealerships indicates that, as designed, the PPP successfully kept hundreds of thousands of dealership employees on payrolls during the height of the COVID-19 pandemic.

Dealer PPP borrowers should now focus on PPP loan forgiveness. Upon receipt of a forgiveness application, a PPP lender will make an initial recommendation to SBA, which in turn will make a final forgiveness decision. Of the 5.2 million PPP loans approved in 2020, 3.3 million have been forgiven and 145,000 are under review, leaving 1.7 million forgiveness applications to be filed with SBA. To date, SBA has yet to reject a loan forgiveness application in full. Note: a PPP borrower that fails to file for forgiveness within 10 months after the end of its covered period must begin making loan payments

In addition to PPP loan forgiveness, dealers are encouraged to review the potential availability of employee retention tax credits (ERTCs) with their legal and financial advisors. An NADA webinar covers the ERTC in some detail.

New Small Business Administration PPP Rollout: UPDATE 4

New Small Business Administration PPP Rollout: UPDATE 4

JAN. 29, 2021 -- SBA is making $284 billion available for new (first draw) and certain existing (second draw) Paycheck Protection Program (PPP) loans.

Under the new PPP loan program:

  • a second draw PPP loan applicant must enter its first draw PPP loan number;
  • maximum second draw PPP loan amounts are $2 million per loan and $4 million per corporation;
  • borrowers can adopt covered periods of between eight and 24 weeks;
  • in addition to previously allowed expenses, new loan proceeds may be used for certain operational, property damage, supplier and worker protection expenditures;
  • potential PPP borrowers now include 501(c)(6) nonprofits; and
  • certain first draw PPP loan borrowers are eligible to modify their loan amounts.  

A PPP borrower is generally eligible to apply for a second draw PPP loan if it: 

  • has received a first draw PPP loan and fully uses the proceeds for authorized expenses only;
  • has no more than 300 employees;
  • had at least a 25% reduction in gross receipts between comparable calendar quarters in 2019 and 2020; and
  • can certify that the loan is “necessary to support ongoing business operations in light of current economic conditions.” This parallels the certification dealerships made when applying for PPP loans in 2020.

To date, the SBA has issued the following new PPP loan guidance.

Save-the-Date: On Monday, Feb. 8, at 1pm Eastern Time, NADA will host a webinar on the eligibility criteria for the new PPP, the revised Employee Retention Tax Credit, the deductibility of expenses paid with PPP loan proceeds, and the process and key factors involved with applying for and obtaining PPP loan forgiveness; registration details will be sent to all dealers next week. Reminder: Dealers interested in applying for a new PPP loan should consult legal counsel, accountants and prospective lenders.

SBA Issues New PPP Loan Forgiveness Guidance and Documents

JAN. 22, 2021 -- SBA has announced availability of the following Paycheck Protection Program (PPP) guidance and documents related to loan forgiveness.

All dealer PPP borrowers must file the new controlling interest disclosure form (Form 3508D). PPP borrowers who applied for forgiveness prior to Dec. 27, 2020, must file Form 3508D with their lenders no later than Jan. 26, 2021. PPP borrowers who have applied, or that will apply, for forgiveness on or after Dec. 27, 2020, must file Form 3508D within 30 days of doing so. 

Dealer PPP borrowers who have yet to apply for loan forgiveness should carefully review the new loan forgiveness IFR, as it replaces all prior IFRs addressing loan forgiveness (see above). It is laid out in question-and-answer format and, among other things, lists forgivable expense items added by the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (Economic Aid Act).

Dealer PPP borrowers who have yet to apply for loan forgiveness should also make sure to use the appropriate revised forgiveness application when they do so (see above). Reminder: to avoid having to make loan payments, PPP borrowers should file for forgiveness no later than 10 months after the end of their covered periods. 

See SBA’s Website for other information related to PPP loans, including specifics related to the reopened program which, in accordance with the Economic Aid Act, extends until March 31, 2021. Existing and prospective dealer PPP loan borrowers should consult legal counsel, accountants, and lenders regarding program specifics.

SBA Issues New Guidance on PPP and EIDLs

AUGUST 12, 2020 -- Yesterday, the Small Business Administration (SBA) issued new borrower guidance on the Paycheck Protection Program (PPP). These include new FAQs on the use of loan proceeds for medical plan costs and on how the PPP interacts with Economic Injury Disaster Loans (EIDL). For more information, please see the following:  

  • A new FAQ 51 clarifying that allowable payments for the provision of group health benefits include vision and dental benefits.
  • Several new FAQs on the interaction between EIDL and PPP loans.
  • A new Interim Final Rule on how to appeal an adverse SBA PPP loan review decision.

As appropriate, dealerships with PPP and/or EIDL loans should review the new FAQs and IFR with their lenders and, as necessary, with outside advisors such as CPAs and attorneys.

Note: Additional PPP loan information is available from NADA’s Coronavirus Hub, including a Guidance on the Use and Forgiveness of PPP Loan Proceeds, a recent Webinar on forgiveness,  and a set of CARES Act FAQs.

On July 23 the SBA released new guidance for procedures on submitting PPP forgiveness loan documents as well as guidance for reporting suspicious activity in the EIDL Program.

Note: The PPP forgiveness platform will go live and begin accepting lender submissions on August 10, subject to extension if any new legislative amendments to the forgiveness process necessitate changes to the system. 

SBA Releases PPP Borrower Information

JULY 6, 2020 -- The Small Business Administration released borrower-specific information related to the PPP. Links to the borrower information can be found under the “Additional Program Information” section of the SBA's PPP website

One-Minute Rundown of the Paycheck Protection Program (PPP)

MAY 19, 2020 -- The PPP prioritizes millions of Americans employed by small businesses by providing forgivable loans geared toward job retention and business expenses.

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  • Who's eligible: Dealerships with fewer than 500 employees that have paid salaries and payroll taxes prior to February 15 can secure a loan up to 2.5 times the borrower’s average monthly payroll costs. For auto groups with more than 500 employees, eligibility affiliation rules may be waived under certain criteria.
  • Where to go: The U.S. Treasury Department website explaining the Small Business Administration’s PPP loan program for small businesses. The site includes an overview of the program, a fact sheet for borrowers and new Borrower Application and Lender Application forms.
  • NADA Resources: NADA’s CARES Act FAQs discuss the PPP in detail. NADA has also produced summary documents on forgiveness, affiliation rules, and larger companies seeking loans. Dealers can also view NADA’s April 1 webinar, Making Sense of the New SBA Paycheck Protection Program: Practical Consideration for Dealers, explains the Paycheck Protection Program..
  • What tax benefits are NOT available for PPP: Dealers who obtain a decision of forgiveness on their PPP loan will no longer be able to defer the payment of payroll taxes. Dealers cannot utilize the employee retention tax credit provided for in the CARES Act if they obtain a PPP loan. Consult your financial advisors to compare the cash flow benefits of these tax provisions versus a PPP loan.
  • For more information on the PPP, see the SBA’s PPP webpage.
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Deadline to Apply for a PPP Loan Is June 30

JUNE 18, 2020 -- The deadline to apply for a loan from the Paycheck Protection Program (PPP), June 30, is fast approaching. The PPP has been the primary resource for small businesses to receive relief for maintaining payroll, hiring back employees and covering eligible overhead. 

Legislation signed on June 6 extends the covered period for loan forgiveness from eight weeks after the date of loan disbursement to 24 weeks and lowers the percentage of a borrower’s loan proceeds that must be used for payroll from 75% to 60%.

  • Small businesses must apply with a lender by June 30. SBA has approximately $100 billion available for relief. 
  • See state-by-state data here.

SBA Issues New Interim Final Rule for the PPP

JUNE 17, 2020 -- Today the Small Business Administration and the Treasury Department issued a new Interim Final Rule (IFR) that revises two previous IFRs for the Paycheck Protection Program. This latest rule conforms with changes made by the PPP Flexibility Act. 

Note: A detailed explanation of these changes is included in NADA's Lifeline Series Webinar Paycheck Protection Program Flexibility Act of 2020: Impact on the Use and Forgiveness of Loan Proceeds.

SBA Publishes New EZ Forgiveness Application for PPP Borrowers

JUNE 17, 2020 -- Today the SBA issued an updated version of the Standard Forgiveness Application with instructions. This revised application conforms with changes made by the PPP Flexibility Act.

SBA and Treasury also issued a simplified new EZ Forgiveness Application and instructions for PPP borrowers who can demonstrate:

  1. They qualify to avoid any pay-level-based reduction in loan proceed forgiveness; and
  2. They qualify for either the headcount-based forgiveness reduction safe harbor or the reduced business activity forgiveness reduction safe harbor. 

Note: SBA and Treasury have indicated that borrowers may evaluate their eligibility for the head count and pay level forgiveness reduction avoidance safe harbors as of the date their forgiveness applications are filed. 

SBA Issues New PPP Guidance

JUNE 15, 2020 -- Last Friday the Small Business Administration and the Treasury Department issued new and revised guidance for the Paycheck Protection Program (PPP). This guidance implements the Paycheck Protection Program Flexibility Act (PPPFA), signed into law on June 5, and includes revised application forms to conform to the PPPFA. 

NADA urges dealers to review the newest guidance:

Treasury, Fed Release Additional Guidance

MAY 1, 2020 -- The Paycheck Protection Program (PPP) allows loans of as much as $10 million per borrower for payrolls, hiring back employees, and approved expenses. The Treasury Department and Federal Reserve Board have released more information for the PPP and the Main Street Lending Program: 


    Treasury, SBA Release More Guidance for the PPP

    APRIL 29, 2020 -- Businesses are applying for the Paycheck Protection Program by the thousands. The Administration reports that as of April 29, $52 billion in loan requests have been approved. The Treasury Department and Small Business Administration released additional guidance for PPP’s review procedure, final rule on disbursements, FAQs question 37 and more. NADA urges dealers to review these items carefully.

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    For an overview of the loan program, visit Top-line Overview of PPP and the SBA’s Paycheck Protection Program Loan Report.

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    1. CARES Act, a) Paycheck Protection Program, ii) Affiliation      arrow_upward

    NADA Analysis on Large-Company Eligibility for PPP

    APRIL 29, 2020 -- The government recently clarified guidance in the wake of large, publicly traded businesses applying (and qualifying) for Paycheck Protection Program (PPP) loans during the first round. NADA has released an analysis addressing PPP loan eligibility for businesses owned by large companies.

    New Guidance Clarifies Application Under PPP of Affiliation Rules and 500-Employee Limit

    APRIL 4, 2020 -- Late on April 3, 2020, the Small Business Administration issued an interim final rule (Affiliation IFR) addressing the application of the SBA’s affiliation rules to loan applications under the Paycheck Protection Program (PPP). (The Affiliation IFR supplements the general PPP interim final rule issued on April 2, 2020.) In addition to the Affiliation IFR, the SBA issued on April 3 a summary overview of the its affiliation rules (Affiliation Overview).

    1. CARES Act, a) Paycheck Protection Program, iii) Eligible Lenders      arrow_upward

    SBA Tool Matches Businesses with PPP Lenders

    APRIL 6, 2020 -- The Small Business Administration has developed a Lender Finder Tool for the Paycheck Protection Program, a loan program designed to provide a direct incentive for small businesses to keep workers on the payroll during the downturn caused by the coronavirus outbreak. For more information on the Paycheck Protection Program and other SBA lending programs, see NADA’s CARES Act FAQs (updated June 5).

    1. CARES Act, a) Paycheck Protection Program, iv) Loan Use & Forgiveness   arrow_upward

    SBA Outlines PPP Forgiveness Process

    AUGUST 4, 2020 -- The Small Business Administration (SBA) has updated its frequently asked questions on PPP loan forgiveness,

    Previously, SBA released a procedural notice outlining the process by which PPP lenders must review loan forgiveness applications and notes that lenders may begin submitting loan forgiveness decisions to SBA on August 10. Dealerships with PPP loans should review the SBA notice with their lenders and, as necessary, with outside advisors such as CPAs and attorneys. Note: additional PPP loan forgiveness information is available from NADA’s Coronavirus Hub, including Guidance on the Use and Forgiveness of PPP Loan Proceeds, a recent webinar and CARES Act FAQs.

    The loan forgiveness process begins when a PPP borrower files a forgiveness application (or EZ forgiveness application) with its PPP lender. A PPP borrower may file its application after it has used all loan proceeds for which it seeks forgiveness. Read more

    NADA Updates CARES Act FAQs and Forgiveness Analysis

    JULY 9, 2020 -- Today NADA updated its Analysis of PPP Loans: Use of Proceeds and Forgiveness to reflect: 

    NADA also recently updated its CARES ACT FAQs with new information on the PPP and the Main Street Lending Program.

    PPP Loan Forgiveness Application Now Available

    MAY 18, 2020 -- The Small Business Administration and the Treasury Department issued the Paycheck Protection Program Loan Forgiveness Application, along with detailed instructions and worksheets. Forgiveness applications will generally not be filed until after June 30, 2020.

    NADA Provides Guidance for Dealers with PPP Loans

    APRIL 21, 2020 -- Review NADA’s PPP Loans: Use of Proceeds and Forgiveness NADA Preliminary Guidance (updated June 11), which provides valuable insights on the forgiveness elements of the PPP loan program. Many dealers have been able to obtain PPP loans and need further clarification on how to properly apply them. NADA’s latest analysis provides guidance for dealers on how they can use the proceeds from the loan; where they can apply them; and to what extent the loan can be forgiven. If a PPP loan is forgiven, it effectively becomes a grant from the federal government to the borrower. NADA urges all dealers with a PPP loan to review the guidance carefully.  Note: this information is preliminary and does not reflect the additional guidance NADA expects to obtain from SBA and Treasury, which will be circulated as soon as it is received.

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    The Interim Final Rule announced additional eligibility criteria and requirements for certain loan pledges. The official version will appear in the Federal Register.

    In addition, the Treasury’s website has updated its CARES Act page to include specific sections on: 

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    1. CARES Act, a) Paycheck Protection Program, v) Deductibility of Expenses      arrow_upward

    IRS: Expenses Covered Under PPP Loans are Not Tax-Deductible

    MAY 1, 2020 -- The IRS released guidance stating that expenses forgiven as part of a PPP loan are not tax deductible. This works to prevent a “double tax benefit.” The IRS cited section 256 of the tax code, which states that deductions can’t be taken if they are tied to a certain class of tax-exempt income.

    1. CARES Act, a) Paycheck Protection Program, vi) Certification arrow_upward

    NADA Publishes Guidance for PPP Borrower Certifications

    MAY 13, 2020 -- The Small Business Administration and Treasury Department issued a new FAQ (#46) regarding the certification of need that borrowers under the Paycheck Protection Program were required to make in connection to their PPP loan applications. NADA has released an analysis of this new FAQ (updated May 15) that provides helpful guidance regarding the certifications dealers have made.

    • In the PPP FAQs, question 46 establishes a new safe harbor for borrowers who received PPP loans of less than $2 million.
    • For loans in excess of $2 million: Borrowers will likely be audited (expected to have basis for a good-faith certification).
    • If the SBA deems that a borrower’s certification was not justified, the PPP loan will not be forgiven and must be repaid. 

    A recorded webinar outlining NADA’s guidance regarding borrower certifications and answering many of the related questions can be found here

    1. CARES Act, b) Other Lending Programs, i) Main St. Lending Program   arrow_upward

    Main Street Lending Program Lender Portal is Open

    JUNE 16, 2020 --  The Federal Reserve Bank of Boston announced that the Main Street Lending Program lender portal is now open. The program is designed to help ensure that small- and medium-sized businesses have access to the credit they need. The program will operate through three facilities: The Main Street New Loan Facility, the Main Street Priority Loan Facility, and the Main Street Expanded Loan Facility.

    Dealers interested in the MSLP can review NADA’s Main Street Lending Program FAQs.

    Federal Reserve Board Expands Main Street Lending Program

    JUNE 10, 2020 -- Yesterday U.S. Treasury Secretary Steven T. Mnuchin issued a statement on the expansion of the Main Street Lending Program. The Federal Reserve Board has taken these actions so more small- and medium-sized businesses are able to receive support:

    • Lowering the minimum loan size for certain loans to $250,000 from $500,000;
    • Increasing the maximum loan size for all facilities;
    • Increasing  to five years the term of each loan option;
    • Extending the repayment period for all loans by delaying principal payments for two years, rather than one; and
    • Raising the Reserve Bank's participation to 95% for all loans.

    Note: The Fed expects the Main Street program to be open for lender registration soon and to be actively buying loans shortly after. See NADA’s updated MSLP FAQs for more details.  

    Fed to Launch Main Street Lending Program

    JUNE 1, 2020 -- The Federal Reserve created the Main Street Lending Program (MSLP) to provide $600 billion in financing for small and medium-sized businesses. The Federal Reserve Bank of Boston released several documents for the MSLP, along with revised FAQs. These revised FAQs provide more answers about the MSLP design, borrower eligibility and regulatory requirements. The program is expected to launch in the coming days. 

    NADA's updated MSLP FAQs reflect these recent developments. 

    Using funds appropriated under the CARES Act, Treasury will make a $75 billion equity investment to implement the program.

    • This investment will enable up to $600 billion in new financing for businesses with up to 15,000 employees or $5 billion in 2019 annual revenues.
    • This Main Street initiative aims to help 40,000+ medium-sized businesses and complements the relief efforts already in place—the Paycheck Protection Program, Employee Retention Credits and Economic Impact Payments—while protecting taxpayer funds.

    1. CARES Act, b) Other Lending Programs, ii) Economic Injury Disaster Loans    arrow_upward

    EIDL Portal Open Until December

    JULY 24, 2020 -- The SBA’s EIDL and Advance Program is available to all eligible small businesses impacted by COVID-19. Dealers can access the following links:

    The EIDL offers long-term, low interest assistance. The Advance Program will provide up to $10,000 ($1,000 per employee) of emergency economic relief to businesses that are currently experiencing temporary difficulties, and these emergency grants do not have to be repaid

    Deadline to Apply for Economic Injury Disaster Loan Is December 31

    JUNE 18, 2020 -- The Small Business Administration’s Economic Injury Disaster Loans and Advance Program is now open to all eligible small businesses and non-profits impacted by the pandemic. 

    • The deadline to apply is December 31.
    • The loan program offers long-term, low-interest assistance for a small business or non-profit. See state-by-state data here.
    • The advance program will provide up to $10,000 ($1,000 per employee) of emergency economic relief to a business that is experiencing temporary difficulties; these emergency grants do not have to be repaid. See state-by-state data here.

    SBA Reopens Economic Injury Disaster Loan Program

    JUNE 16, 2020 -- The Small Business Administration announced it’s reopening the Economic Injury Disaster Loan (EIDL) and EIDL Advance program to all eligible small business applicants experiencing hardship due to COVID-19. NADA reminds dealers that new SBA Paycheck Protection Program loan applications must be filed by June 30. Dealers may also want to consider the Federal Reserve Board’s Main Street Lending Program (MSLP).

    Note: Borrowers may not have more than one PPP loan. Borrowers may apply for both an EIDL and a PPP loan, but cannot spend the funds on the same expenses. Interested dealers should consult with their CPAs and at least one prospective lender. A breakdown of the different programs:

    • EIDL: Maximum loan $2 million; maximum forgivable $10,000; 3.75%/up to 30 years
    • PPP: Maximum loan $10 million; maximum forgivable is total loan amount spent on qualifying expenses; 1%/up to five years
    • MSLP: Maximum loan $35 million (can be higher by expanding an existing loan); none of the loan amount is forgivable; Libor + 300 points/up to five years

    Dealers interested in these programs can review NADA’s CARES ACT FAQs.

    SBA Offers Emergency Loan and Grant to Small Businesses

    MAY 19, 2020 -- The CARES Act provided additional funding for the SBA to offer Economic Injury Disaster Loans and a $10,000 grant upon application. As of 6/14/2020, these loans are again available to small businesses. More information can be found through the SBA website or through NADA’s CARES FAQ (#48-55).

    1. CARES Act, b) Other Lending Programs, iii) Section 504 Real Estate Loans   arrow_upward

    SBA Offers Loans for Small Business Real Estate

    MAY 19, 2020 -- The 504 Loan Program provides approved small businesses with long-term, fixed-rate financing used to acquire fixed assets for expansion or modernization. Dealers can find more information on Section 504 loans through the SBA website or through NADA’s CARES FAQ (#56).

    1. CARES Act, c) Tax Relief, i) Employee Retention Tax Credit      arrow_upward

    IRS Releases FAQs on Employee Retention Credit

    APRIL 30, 2020 -- The IRS released FAQs on Employee Retention Tax Credit under the CARES Act. The tax credit is fully refundable for employers, equal to 50% of qualified wages that eligible employers pay their employees. The maximum amount of qualified wages per employee is $10,000, so that the maximum credit for qualified wages paid to any employee is $5,000.

    Note: Employers who have received loans through the PPP are not eligible to benefit from the Employee Retention Tax Credit.

    IRS Publishes Infographic on Employer Tax Credits

    JUNE 8, 2020 -- The IRS published a new infographic detailing employer tax credits that dealers may qualify for under coronavirus-related relief efforts. Included in these credits is the Employee Retention Tax Credit and credits for paid family leave under the Families First Coronavirus Relief Act.

    Note: Dealers who are participating in the Paycheck Protection Program are not eligible for the Employee Retention Tax Credit. 

    IRS: Three Tax Credits for Businesses Hit by COVID-19

    MAY 8, 2020 -- The Internal Revenue Service is providing employers three important new credits to help with COVID-19 relief: The Employee Retention Credit; Paid Sick Leave Credit; and Family Leave Credit. Qualifying employers must fall into one of two categories:

    • The employer's business is fully or partially suspended by government order due to COVID-19 during the calendar quarter; or
    • The employer's gross receipts are below 50% of the comparable quarter in 2019. Once the employer's gross receipts go above 80% of a comparable quarter in 2019, they no longer qualify after the end of that quarter. 

    IRS Updates FAQs on Employee Retention Tax Credit

    MAY 8, 2020 -- Last night, the IRS updated its Employee Retention Tax Credit (ERTC) FAQs, clarifying that businesses can treat health plan expenses as qualified wages under the ERTC, including health plan expenses for furloughed employees paid by the business. This will provide additional relief to dealers utilizing the ERTC and provide health care benefits for their furloughed employees. Note: dealers participating in the Paycheck Protection Program are ineligible to receive tax credits under the ERTC. 

    1. CARES Act, c) Tax Relief, ii) Qualified Improvement Property      arrow_upward

    Dealers Can Find Liquidity Through Look-Back Depreciation

    APRIL 20, 2020 -- The CARES Act includes a technical correction of an error in the Tax Cuts and Jobs Act of 2017 (TCJA). The correction is for depreciation of qualified improvement property (QIP). In the TCJA, Congress intended to allow a 15-year recovery period (20 years for an alternative depreciation system) and 100% bonus depreciation eligibility for QIP.

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    Due to a drafting error, the statute failed to include QIP as eligible property for purposes of the recovery period and the bonus depreciation rules. The CARES Act corrected the error and allows the 15-year recovery period and bonus depreciation eligibility retroactively for property placed into service after Dec. 31, 2017. Bottom line: Taxpayers can now claim additional depreciation for QIP placed in service in 2018 and 2019.

    Note: The accompanying IRS revenue procedure to the QIP fix allows dealers to amend a previous election out of bonus depreciation. This appears to include dealers who elected out of bonus depreciation before the IRS issued a proposed regulation providing that dealers who have interest expenses, including floor plan financing interest, of less than 30% of adjusted taxable income could also avail themselves of bonus depreciation. Dealers who previously elected out of bonus depreciation should contact their tax professional to discuss potential tax relief under this revenue procedure.

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    1. CARES Act, c) Tax Relief, iii) Payroll Tax Deferral      arrow_upward

    IRS Updates FAQs on Deferred Tax Deposits and Payments

    APRIL 10, 2020 -- The IRS has released updated FAQs that address specific issues related to the deferral of deposit and payment of employment taxes. Please review the updated IRS FAQs and consult your tax advisors.

    • Note: Certain tax benefits are not available for PPP loan recipients. Dealers who receive a PPP loan cannot utilize the employee retention tax credit as provided for in the CARES Act at any time. Dealers should consult their financial advisors to compare the cash flow benefits of these tax benefits versus a PPP loan.

    1. CARES Act, c) Tax Relief, iv) Limitation on Interest Deductibility arrow_upward

    NADA CARES FAQs Discuss Interest Deductibility

    MAY 19, 2020 -- The CARES Act made important changes to interest deductibility during the coronavirus pandemic. The NADA CARES FAQ (#58) contains information on this issue. 

    1. CARES Act, c) Tax Relief, v) Net Operating Losses    arrow_upward

    IRS Publishes FAQ on Net Operating Losses

    APRIL 23, 2020 – The IRS has released an FAQ addressing issues related to the expanded NOL carryback provisions found in the CARES Act. Additional information can be found in NADA’s CARES Act FAQ (updated June 5).

    1. CARES Act, c) Tax Relief, vi) C Corp AMT Credits    arrow_upward

    NADA CARES FAQs Discuss Changes to AMT

    MAY 19, 2020 -- The CARES Act made changes to AMT credits for C Corps to assist companies in finding liquidity. Check the NADA CARES FAQ (#62) for more information.  

    2. FCCRA, a) Expanded Leave      arrow_upward

    NADA FAQs on the Emergency Employee Leave Mandate

    MAY 19, 2020 -- Review NADA's FAQs on the federal emergency employee leave mandates under the Families First Coronavirus Response Act (FFCRA). This guide reflects DOL's updated guidance on how to compute hours and regular rate of pay and clarifications for emergency sick leave under FFCRA. Topics include what employees need to qualify for paid sick leave or child care leave and the records dealerships must keep. Reminder: The emergency leave mandates are effective April 1, 2020 - Dec.31,2020. More DOL guidance is available here.  |  View the NADA FAQs


    Treasury Issues Guidance on Reporting Sick and Family Leave Wages

    JULY 9, 2020 -- The Treasury Department and the Internal Revenue Service provided guidance to employers requiring them to report the amount of qualified sick and family leave wages paid to employees under the Families First Coronavirus Response Act (FFCRA). 

    DOL Clarifies Eligibility for FFCRA In Light of Summer Program Closures

    JUNE 26, 2020 -- Today the U.S. Department of Labor’s Wage and Hour Division clarified eligibility for paid sick or expanded family and medical leave under the Families First Coronavirus Response Act (FFCRA). This provides guidance for employers and employees affected by the closure of summer camps, summer enrichment programs and other childcare programs. DOL also issued a poster and an eligibility tool.

    For more information on the FFCRA, see NADA's updated FAQs on the federal emergency paid leave mandates, which reflect this latest guidance. An important addition: 

    Q: May an employee request FFCRA leave based on the closure of summer camps or other summer programs?

    A: Yes. FFCRA leave may be taken if the employee is unable to work or telework due to a need to care for his or her child whose place of care is closed due to COVID-19 related reasons.

    NADA Hosts Webinar on COVID-19 Best Practices, Impact of New Legislation

    MARCH 19, 2020 -- Labor attorney Rick Warren reviews key pandemic-related legal issues and mandates for automobile dealerships. Also joining are NADA's David Regan and Doug Greenhaus, who discuss legal compliance and prudent policies impacting franchised dealerships, their employees and their customers. Watch the webinar

    2. FCCRA, b) Tax Credits arrow_upward

    Treasury, IRS Clarify Paid Leave for COVID Vaccine

    APRIL 9, 2020 -- The Treasury Department and Internal Revenue Service yesterday clarified that the paid leave provided for in the American Rescue Plan Act (ARPA) applies to employees seeking time off to obtain or to recover from a COVID-19 vaccine. ARPA allows businesses with fewer than 500 employees to voluntarily offer federally funded sick and family leave if related to coronavirus illness, exposure or child care. A dealership that offers such leave may take a credit against its share of employee payroll taxes through September 30, 2021. Federally funded coronavirus-related leave is limited to 80 hours for the second and third quarters of 2021 and is capped at $511/day ($5,110 total) per employee for sick leave and $200/day ($2,000 total) per employee for family leave.

    For more information, see Treasury's fact sheet.

    IRS Provides Guidance on Recapture of Excess Employment Tax Credits

    JULY 27, 2020 -- The Internal Revenue Service has issued temporary and proposed regulations on how it will recapture excess credits taken by employers under coronavirus relief legislation. Read more

    Treasury Department Clarifies the Cash-flowing of Temporary Paid Sick and FMLA Leave

    MARCH 21, 2020 -- The Department of Treasury issued an important announcement regarding how it plans to implement the recently enacted federal legislation relating to paid sick and FMLA leave. This announcement should address concerns that some dealers and dealer advisors have expressed about certain provisions under the new law. Specifically, people are concerned that the tax credit provisions of the legislation are insufficient to ensure the orderly funding of the payment obligations imposed, despite the fact that all of the direct costs a dealer would bear would ultimately be repaid via a refundable tax credit.

    IRS Form 7200 Allows Advance Payment of FFCRA Credits

    MAY 15, 2020 – Dealers with employees on qualified FFCRA leave may be entitled receive an advance of associated FFCRA tax credits from the IRS by filing Form 7200. Under IRS guidance, dealers may retain federal employment taxes in order to cover qualified paid leave under the FFCRA. If there aren’t sufficient employment taxes to cover the cost of qualified sick and family leave wages, employers can file Form 7200 to request an advance payment from the IRS.

    3. Essential Business Guidance      arrow_upward

    Auto Sales Officially Deemed Essential Service

    APRIL 20, 2020 -- Dealer efforts have paid off: Automotive sales were deemed an essential service, according to guidance released Friday. The U.S. Department of Homeland Security amended its list of essential critical infrastructure workers. The new guidelines include "workers critical to the manufacturing, distribution, sales, rental, leasing, repair, and maintenance of vehicles and other transportation equipment, including electric vehicle charging stations, and the supply chains that enable these operations to facilitate continuity of travel-related operations for essential workers."

    4. Assistance for Workers      arrow_upward

    Economic Impact Payments: What You Need to Know

    MARCH 30, 2020 -- The Treasury Department and the Internal Revenue Service today announced that distribution of economic impact payments will begin in the next three weeks and will be distributed automatically, with no action required for most people. However, some taxpayers who typically do not file returns will need to submit a simple tax return to receive the economic impact payment. Read more

    5. Compliance Guides      arrow_upward

    DOL Issues Guidance to Aid Employee Benefit Plans

    APRIL 30, 2020 -- The Department of Labor’s Employee Benefits Security Administration issued deadline relief and other guidance under Title I of the Employee Retirement Income Security Act of 1974. The guidance helps employee benefit plans, plan participants and beneficiaries, employers and other plan sponsors, plan fiduciaries, and other service providers impacted by the coronavirus. Also see DOL's FAQs for participants and beneficiaries.

    For more information on how employers can lower health insurance expenses, see NADA’s Reduce Annual Health Insurance Costs Within 90 Days

    NADA Releases New FAQs: "Dealership Health and Safety Concerns During A Pandemic"

    APRIL 16, 2020 -- NADA's latest FAQs, "Dealership Health and Safety Concerns During A Pandemic" (updated April 24), outline the steps dealerships can take to provide a safe environment for their employees, followed by frequently asked questions related to occupational health and safety law during the pandemic and what steps to take should an employee test positive for covid-19. Download the FAQs