MM&C Real Estate Attorney Cathy Greenbaum Borten CREW Maryland Suburban Member Spotlight


MM&C Real Estate and Telecommunications Attorney, Cathy Greenbaum Borten has been a CREW Maryland Suburban Member for two years. She will be joining the Board as its Secretary in 2021. Enjoy the CREW Member Spotlight about Cathy's practice and her involvement with CREW!

Cathy is an associate in the firm's Real Estate practice group, where she focuses her practice in commercial real estate transactions and leasing, real estate litigation, and commercial financings and settlements. She has also handled land use and zoning matters, appearing before county and city government bodies and pursuing zoning and text amendments in cities and counties and has represented clients in contested proceedings in both trial courts and appellate matters. 

 





The Daily Record Announces 2021 Best Lawyers in Maryland; Names Four MM&C Attorneys to the List


Miller, Miller & Canby is pleased to announce four attorneys have been named to the Daily Record list of Best Lawyers in Maryland for 2021. The list recognizes leaders in the state of Maryland based on their professional accomplishments in their respective areas of practice.

Donna McBride was named in the Litigation area of practice for both commercial and estates and trust litigation. McBride is a partner in Miller, Miller & Canby’s Litigation group, where she focuses in complex business matters for corporate clients, as well as insurance-related litigation and trust litigation. In 2019 she was admitted to the American College of Trial Lawyers as a Fellow, an honor reserved for experienced trial lawyers who have mastered the art of advocacy and whose professional careers have been marked by the highest standards.

James Thompson and Joseph Suntum were named in the Eminent Domain and Condemnation practice area.

Thompson concentrates his practice in eminent domain and real estate valuation litigation, in addition to civil litigation involving complex real estate and business/commercial disputes.  Among other honors, he was selected as the 2018 Maryland State Bar Association Senior Lawyer of the Year, received the 2018 President’s Citation for Outstanding Service from the Montgomery County Bar Association, and also was honored with the Century of Service Award and the Leadership in Law Award.

Suntum is a principal in the firm and the leader of the Eminent Domain and Condemnation group. His decades of trial experience and his in-depth knowledge of real property valuation and the law of eminent domain allow him to protect his clients' property rights and maximize their compensation when their properties are targeted for condemnation. He is the Owners’ Counsel of America member  attorney for the state of Maryland, a selective membership restricted to only one attorney per state.

Joel (Jody) Kline was named in Land Use and Zoning. Kline joined Miller, Miller & Canby in 1974, has been a principal of the firm since 1981 and has served as head of the firm’s Land Development practice since that time. His practice concentrates on land use, zoning and subdivision law, representing private clients, nonprofit entities, and municipal corporations and agencies.

The Daily Record, a multimedia news source, publishes a print and online edition five and breaks news daily on its website. In addition, The Daily Record publishes more than 30 special products a year and honors leading Marylanders through annual awards events including Maryland's Top 100 Women, Influential Marylanders, Most Admired CEOs, and Best Lawyers. The Daily Record is part of BridgeTower Media, one of the country’s leading business-to-business media companies with 44 print and digital publications in more than 20 U.S. markets.

About Miller, Miller & Canby
In 2021, Miller, Miller & Canby will celebrate 75 years of serving the legal needs of metropolitan Washington, DC. As the oldest law firm in Montgomery County, MD, the firm recognizes that this milestone reflects the relationships built and maintained with our clients, friends and the business community, many spanning multiple generations. The firm maintains its focus on its core areas of practice: Land Use and Zoning, Real Estate, Litigation, Business Law and Tax Advocacy, and Estates and Trusts Law. The firm's moderate size allows its attorneys to maintain close contact with clients and have the opportunity to develop and foster trusted, lasting relationships. In all of our practice areas, an overarching concern for quality of product and efficiency of accomplishment assures clients that we strive for true value in legal representation. Miller, Miller & Canby is proud to have maintained this standard of service since the firm’s founding in 1946.





U.S. News & World Report and Best Lawyers Name Miller, Miller & Canby among 2021 “Best Law Firms”


Miller, Miller & Canby is pleased to announce the firm has been recognized among the  2021 “Best Law Firms” in the Washington, DC metro area.

U.S. News & World Report and Best Lawyers publicly announced the latest edition of the Best Law Firms rankings this month. Miller, Miller & Canby received Metropolitan Tier 1 honors for its Eminent Domain practice. Tier 1 is the highest rank given; the rankings are based on a rigorous evaluation process.

“We are honored to be recognized once again to this prestigious ranking of law firms,” said Miller, Miller & Canby’s Joseph Suntum, who leads the firm’s Eminent Domain and Condemnation Law practice. “We take great pride in our dedication to our clients and to be recognized for this service is a great privilege.”

Mr. Suntum is also a recognized “Best Lawyer” in Eminent Domain and Condemnation Law.

The U.S. News – Best Lawyers® “Best Law Firms” rankings are determined based on the collection of client and lawyer evaluations, peer review from leading attorneys in the field, and review of additional information provided by law firms as part of the formal submission process. To be eligible for a 2021 ranking, a law firm must have at least one lawyer recognized in the The Best Lawyers in America list for that particular location and specialty.

Rankings will be featured in the physical edition of U.S. News – Best Lawyers “Best Law Firms”, which will be distributed to more than 30,000 in-house counsel. The 2021 “Best Law Firms” rankings can be seen in their entirety by visiting bestlawfirms.usnews.com.

ABOUT MILLER, MILLER & CANBY
In 2021, Miller, Miller & Canby will celebrate 75 years of serving the legal needs of metropolitan Washington, DC. As the oldest law firm in Montgomery County, MD, the firm recognizes that this milestone reflects the relationships built and maintained with our clients, friends and the business community, many spanning multiple generations. The firm maintains its focus on its core areas of practice: Land Development, Real Estate, Eminent Domain, Tax Appeals, Litigation, Business and Tax, and Trusts, Estates and Elder Law. The firm's moderate size allows its attorneys to maintain close contact with clients and have the opportunity to develop and foster trusted, lasting relationships. In all of our practice areas, an overarching concern for quality of product and efficiency of accomplishment assures clients that we strive for true value in legal representation. Miller, Miller & Canby is proud to have maintained this standard of service since the firm’s founding in 1946.

 





Miller, Miller & Canby's Diane Feuerherd Joins Appellate Seminar Panel


Join our own Diane Feuerherd and other speakers on September 14 at 5:30 pm for the Prince George's County Bar Association and Maryland State Bar Association Appellate Seminar 2020. This program will include a discussion of new appellate rules, final judgements for appeals, issue recognition and drafting questions presented.

Date: September 14, 2020
Time: 5:30pm

Moderator: Michael Wein, Esq.

Speakers:
Hon. Douglas R. M. Nazarian
Court of Special Appeals & Member of Maryland Rules Committee

Hon. Joseph F. Murphy, Jr. (Ret.)
Chief Judge, Court of Special Appeals

Hon. Erek L. Barron
Partner - Whiteford Taylor  & Preston

Timothy Maloney, Esq.
Shareholder - Joseph, Greenwald & Laake, PA

Diane Feuerherd, Esq.
Miller, Miller & Canby

For more information and to register click here.





Best Lawyers in America® Announces 2021 Best Lawyers Awards; Recognizes Five MM&C Attorneys


Miller, Miller & Canby is pleased to announce five firm attorneys have been recognized as Best Lawyers in America.® for 2021. James (Jim) Thompson, Joel (Jody) Kline, Donna McBride and Joseph (Joe) Suntum have been recognized in their respective areas of practice as “Best Lawyers” and Diane Feuerherd has been recognized as a Best Lawyers “One to Watch”, an honor for attorneys who are earlier in their careers, typically in practice nine years or less. 

Mr. Thompson
concentrates his practice in eminent domain and real estate valuation litigation, in addition to civil litigation involving complex real estate and business/commercial disputes. He has led Miller, Miller & Canby’s Litigation practice group for close to 30 years. He has been named to the Best Lawyers list every year since first being recognized in 2007.

Mr. Kline
joined Miller, Miller & Canby in 1974, has been a principal of the firm since 1981 and has served as head of the firm’s Land Use & Zoning practice since that time. His practice concentrates on land use, zoning and subdivision law, representing private clients, nonprofit entities, and municipal corporations and agencies. He has also been named to the Best Lawyers list every year since first being recognized in 2007.

Ms. McBride
is a partner in Miller, Miller & Canby’s Litigation practice, where she focuses in complex business matters for corporate clients, as well as insurance-related litigation and trust litigation. In 2019 she was admitted to the American College of Trial Lawyers as a Fellow, an honor reserved for experienced trial lawyers who have mastered the art of advocacy and whose professional careers have been marked by the highest standards.

Mr. Suntum
is a principal in the firm and the leader of the Eminent Domain and Condemnation group. His decades of trial experience and his in-depth knowledge of real property valuation and the law of eminent domain allow him to protect his clients' property rights and maximize their compensation when their properties are targeted for condemnation. He is the Owners’ Counsel of America member  attorney for the state of Maryland, a selective membership restricted to only one attorney per state. The firm’s Eminent Domain practice has been honored as a Best Law Firms Metropolitan “Tier 1” practice.

Ms. Feuerherd
is an attorney in Miller, Miller & Canby's Litigation practice with a focus in appellate, business and real estate litigation. She has successfully represented individuals, property owners, and businesses in a wide variety of matters, ranging from administrative hearings before the Board of Appeals, to jury and bench trials in state and federal courts, and to appeals before the Court of Special Appeals and Court of Appeals. In addition to her work she is active in state and local bar associations.

Best Lawyers in America is the oldest and one of the most respected attorney ranking services in the country. Recognition is based entirely on peer review. For more than 30 years, the organization has assisted those in need of legal services to identify the attorneys best qualified to represent them across hundreds of areas of practice.

Best Lawyers publishes a stand-alone publication which announces recognized attorneys. Best Lawyers lists are also published in local, regional, and national print and digital versions of leading publications, including The Wall Street Journal, The New York Times, and the Washington Post.

ABOUT MILLER, MILLER & CANBY
In 2021, Miller, Miller & Canby will celebrate 75 years of serving the legal needs of metropolitan Washington, DC. As the oldest law firm in Montgomery County, MD, the firm recognizes that this milestone reflects the relationships built and maintained with our clients, friends and the business community, many spanning multiple generations. The firm maintains its focus on its core areas of practice: Land Use & Zoning, Real Estate, Litigation, Eminent Domain, Business & Tax and Trust and Estates Law. The firm's moderate size allows its attorneys to maintain close contact with clients and have the opportunity to develop and foster trusted, lasting relationships. In all of our practice areas, an overarching concern for quality of product and efficiency of accomplishment assures clients that we strive for true value in legal representation. Miller, Miller & Canby is proud to have maintained this standard of service since the firm’s founding in 1946. For more information, visit www.millermillercanby.com.
 





The Daily Record Announces Annual VIP List Winners; Names MM&C Attorney Diane Feuerherd to List


Miller, Miller & Canby is pleased to announce attorney Diane Feuerherd has been named to the Daily Record VIP list for 2020. The VIP list recognizes leaders in the State of Maryland based on their professional accomplishments, community service and a commitment to inspiring change. Honorees are 40 years old or younger. They are selected by an outside panel of judges, which includes previous winners and business leaders.

“We are extremely proud to announce this well-deserved honor for Diane, who has been an instrumental part of our firm since she joined us in 2013,” said Managing Principal Robert Gough.

Added senior Principal Donna McBride, “Diane makes a tremendous positive impact here for our clients, and also in the broader legal community through her many volunteer and leadership roles.  She has accomplished a great deal in a short period of time, and we look forward to continuing to celebrate her achievements as she advances in her career.”

Diane Feuerherd
is an attorney in Miller, Miller & Canby's Litigation practice with focuses in appellate, business and real estate litigation. She joined the firm after serving for two years as an appellate law clerk to the Honorable Lynne A. Battaglia of the Court of Appeals of Maryland, the State's highest court. She has successfully represented individuals, property owners, and businesses in a wide variety of matters, ranging from administrative hearings before the Board of Appeals, to jury and bench trials in state and federal courts, and to appeals before the Court of Special Appeals and Court of Appeals.

In addition to her work, she is active in state and local bar associations. She serves as co-chair of the Maryland State Bar Association’s Judicial Appointments Committee, Blog Manager of the Maryland Appellate Blog, Board Member of the Maryland Bar Foundation and a past Fellow of the MSBA’s prestigious Leadership Academy.

"This year's VIP List honorees are an impressive group of young professionals with a strong work ethic and a drive to succeed," said Suzanne Fischer-Huettner, group publisher of The Daily Record. "They are making significant contributions to their professions and to improving their communities. The Daily Record is pleased to honor them."

Click here for more information about the Daily Record VIP list for 2020 and celebratory event on September 17, 2020. Click the Download Attachment link below to view the entire list of VIPs.

Take a peek at the write-up about Diane on the Daily Record website by clicking here.

ABOUT MILLER, MILLER & CANBY
In 2021, Miller, Miller & Canby will celebrate 75 years of serving the legal needs of metropolitan Washington, DC. As the oldest law firm in Montgomery County, MD, the firm recognizes that this milestone reflects the relationships built and maintained with our clients, friends and the business community, many spanning multiple generations. The firm maintains its focus on its core areas of practice: Land Use and Zoning, Real Estate, Litigation, Eminent Domain, Business and Tax, and Trusts and Estates Law. The firm's size allows its attorneys to maintain close contact with clients and have the opportunity to develop and foster trusted, lasting relationships. In all of our practice areas, an overarching concern for quality of product and efficiency of accomplishment assures clients that we strive for true value in legal representation. Miller, Miller & Canby is proud to have maintained this standard of service since the firm’s founding in 1946.





Widening Washington D.C.’s Beltway & I-270 for Toll Lanes in Maryland: June 2020 Project Update


If you live in Montgomery or Prince George’s Counties, or you regularly commute into Washington D.C. or Northern Virginia, you are likely already aware of plans to widen the I-495 Beltway and I-270 to make way for new toll lanes.  Miller, Miller & Canby’s eminent domain and condemnation attorneys are closely monitoring this major infrastructure project.

The Landscape
This project is a priority of Governor Hogan, which is emerging out of the I-495 & I-270 Managed Lanes Study launched in March 2018 by Maryland Department of Transportation’s State Highway Administration (MDOT SHA).  A Public-Private Partnership (P3) has been established to manage and indeed fund the project’s development, design and construction.  The P3 releases periodic newsletters and maintains this project website.

On January 8, 2020, Maryland’s Board of Public Works (BPW), comprised of the Governor, Treasurer and Comptroller, voted 2-1 to approve Phase-1 of the project.  On February 7th the P3 posted an announcement on its website (click here to view) clarifying that the BPW’s vote “only allows the solicitation process to move forward for a Phase Developer to assist the MDOT SHA with preliminary development and design activities, which is allowable under federal regulations.”   Once the project’s new toll lanes are constructed, the P3’s development contractor will retain some level of ownership interest in those lanes while operating and maintaining them for a given time period – purportedly 50 years.

Prior to January’s BPW vote, the National Environmental Policy Act (NEPA) process was already well underway for the I-495 & I-270 Managed Lanes Study.  In fact, the Draft Environmental Impact Statement (DEIS) was scheduled to be released earlier this year for public review and comment until the COVID-19 situation introduced delay.  The P3 is working to release the DEIS in the mid-July timeframe, and it will be followed by an announcement scheduling public hearings, which will most likely be held virtually, but in-person hearings have not yet been ruled out.  P3 also announced that the minimum-required 45-day review period will be extended.


The Plan for Phase 1
The P3’s February 7th website post included a map of Phase-1 as planned, a copy of which is provided below.  Phase-1 will widen I-495 and I-270 for toll lanes, beginning by replacing and widening the American Legion Bridge that crosses the Potomac River from Virginia, and extending northward to I-70 in Frederick County.  Current plans are to divide Phase-1’s delivery, first widening I-270 up to its intersection with I-370 in Montgomery County.  However, since the project’s details remain undefined, the extent of privately owned real estate that will be required to support the widening remains unresolved.  At present, there is an interactive map posted online by MDOT SHA for preliminary planning purposes, which remains subject to change.


Failure of Legislation Proposed to Stop the Project
This project remains highly controversial.  In fact, Bills S.B. 229 & H.B. 292, cross-filed in both chambers of the General Assembly in the 2020 regular session, proposed to prohibit the State from constructing toll roads or bridges without the consent of the majority of the affected Counties.  The Bills proposed to rewrite an existing law (Maryland Transportation Code Section 4-407), which already requires majority County consent for toll projects, but only amongst nine named Counties all located east of the Chesapeake Bay Bridge.  If successfully enacted, the new law would have extended that majority consent requirement to ALL Maryland Counties and Baltimore City.  

However, on March 16, 2020, the House Environment and Transportation Committee voted 16-5 against HB292 and issued an unfavorable report.  The Senate’s version of the Bill, S.B. 229 technically died in the Finance Committee by March 18th, when the regular session prematurely adjourned due to the COVID-19 situation.

While the General Assembly’s debate over the 495/270 widening project may carry on due to its passionate opponents, they find themselves in the minority – so it seems highly unlikely the General Assembly will enact legislation that even potentially threatens to curb the project.


About Miller, Miller & Canby
Miller, Miller & Canby has extensive experience in protecting property owners’ rights throughout the eminent domain process. Jamie Roth is an Associate in the firm’s Litigation Practice Group, concentrating his practice in real estate litigation with a focus in eminent domain. Prior to becoming an attorney, Jamie enjoyed a distinguished career spanning over twenty years in the private and public sector with experience in project management, strategic planning, asset management and risk mitigation, including eleven years as a successful real estate consultant in federal eminent domain matters.

If you have any eminent domain-related questions or questions about the project or its potential impact to your property, please contact Jamie at 301.762.5212 or via email.

Visit our firm’s website for general information on the eminent domain process and our firm’s services by clicking here.

 





New Guidance on PPP Flexibility Act and New 3508EZ Forgiveness Application


On June 5, 2020, the Payroll Protection Program Flexibility Act (Flexibility Act) was signed into law, amending the Coronavirus Aid, Relief, and Economic Security (CARES) Act.  Central to the Flexibility Act was expanding the 8-week forgiveness period under the CARES Act for which businesses must spend their PPP loan proceeds to qualify for loan forgiveness.  Now, under the Flexibility Act, businesses may opt to spread their forgiven period over twenty-four (24) weeks, beginning on the date the PPP loan proceeds was disbursed.

Payroll Compensation Thresholds
Upon enactment of PPP loan program, it was unclear how to spread payroll costs out over the new 24-month period for individuals earning more than $100,000 per year.  Under the CARES Act, businesses are capped at $100,000 of annualized pay per employee, with a maximum amount paid to such employee capped at $15,385.  The SBA had arrived at that maximum amount by dividing the $100,000 amount by 52 weeks and multiplying by 8 weeks (100,000/52 x 8).  Last week, the Small Business Administration (SBA) released an Interim Final Rule (IRF) to address the confusion for whether the maximum amount under the 24-month forgiveness period would be the same as the 8-week forgiveness period.  Per the IFR, payroll costs are still capped at $100,000, but the maximum amount jumps to $46,154 per employee. In doing so, the SBA swapped the 8 weeks with 24 weeks (100,000/52 x 24).  Accordingly, businesses that opt for the 24-week forgiveness period are permitted to allocate almost 3 times as much PPP loan proceeds to employees making over $100,000 than they would under the 8-week forgiveness period.

The IFR also clarified owner compensation.  Now, under the Flexibility Act, owners may pay themselves either 1) 8 weeks’ worth (8/52) of 2019 net profit (up to $15,385) for an 8-week forgiveness period; or 2) 2.5 months’ worth (2.5/12) of 2019 net profit (up to $20,833) for a 24-week forgiveness period.  The IFR stated that, for self-employment income earners opting for the 24 week forgiveness period, the SBA limited the forgiveness of owner compensation to 2.5 months’ worth of 2019 net profit (up to $20,833) since the maximum loan amount is generally based on 2.5 months of the borrower’s total monthly payroll costs during the one-year period preceding the loan.

PPP Loan Forgiveness EZ Application
On June 17, the SBA released an EZ version of the forgiveness application, Form 3508EZ, that applies to borrowers that:

•    Are self-employee with no employees; or
•    Did not reduce the salaries or wages of their employees by more than 25% and did not reduce the number or hours of their employees; or
•    Experienced reductions in business activity as a result of health directives relating to COVID-19, and did not reduce the salaries or wages of their employees by more than 25%.

The EZ application requires fewer calculations and less documentation, and can accessed here.

SBA Guidance on Loan Forgiveness
On June 22, 2020, the SBA issued a clarification to its IFR whereby it detailed, among other things, when a borrower may apply for loan forgiveness.  Per this new guidance, borrowers may submit their forgiveness application any time on or before the maturity date of the loan, including before the end of the covered period, if the borrower has used all the PPP loan proceeds for which the borrower is requesting forgiveness. However, if the borrower applies for forgiveness before the end of the covered period, and the borrower has reduced any employee’s salaries/wages in excess of twenty five percent (25%), the borrower must account for the excess salary reduction for the full 8-week or 24-week covered period.  In addition, in the event the borrower does not apply for loan forgiveness within ten (10) months after the last day of the covered period, or if the SBA determines that the loan is not eligible for forgiveness (whether in whole or in part), the PPP loan will no longer be deferred, and the borrower must begin paying principal and interest.

For businesses interested in learning more about the loan forgiveness application or how to navigate their way through it, please contact Chris Young at 301-738-2033.

Chris Young
is an associate in the Business & Tax practice at Miller, Miller & Canby. He focuses his practice on corporate legal agreements, business formation, tax controversy work and helping clients deal with new tax regulations. View more information about Miller, Miller & Canby's Business & Tax practice by clicking here.
 





Good News for PPP Borrowers: The New Paycheck Protection Program Flexibility Act of 2020


The landmark COVID-19 stimulus package, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, has been a significant tool for assisting struggling small businesses during the current international pandemic. Indeed, it has provided much-needed financial relief and saved countless from closure or bankruptcy. However, the centerpiece of this legislation, the Paycheck Protection Plan (PPP), has been a source of confusion and frustration for many business owners seeking this aid. In an attempt to alleviate frustrations and stay true to the original intent of the bill—providing cash flow to keep people employed and businesses afloat—a new bipartisan bill was passed by the Senate and signed by President Trump on June 5, 2020. The Paycheck Protection Program Flexibility Act of 2020  modifies and provides additional flexibility to portions of the PPP to address those needs. These are the key changes in the new act:
 
●    An extension of time to use funds. A major source of concern for PPP loan borrowers has been the limitation of the eight-week covered period. Only expenses incurred during this time frame were eligible for loan forgiveness. Unfortunately, many businesses were anticipating that they would not be able to utilize all of the loan proceeds during this period because of challenges like restricted operations due to mandatory stay-home orders and lockdowns, and unconventional payroll structures. The new act addresses that issue by expanding the covered period from eight weeks to the earlier of twenty-four weeks or until December 31, 2020. By extending the covered period, businesses have the flexibility to use the loan funds in a way that is more consistent with their standard practices without forfeiting their ability to take advantage of loan forgiveness.

●    A reduction in the amount required to be directed to payroll. Under guidance provided by the Small Business Administration (SBA) and the Department of the Treasury regarding PPP loans, in order to qualify for loan forgiveness of the total amount borrowed, small businesses had to spend at least 75 percent of their loan amount on payroll expenses. The new law reduces that requirement to 60 percent. This change affords business owners the opportunity to allocate the funds toward other eligible expenses such as utilities or rent without fearing the loss of loan forgiveness. However, there is a caveat: Under the language of the new law, which may be clarified by future SBA guidance, businesses must be careful to meet the lower 60 percent threshold because failure to do so will apparently result in the total loss of loan forgiveness. Previously, the forgiveness amount would have merely been reduced.

●    A change in the loan period from two to five years. The new law also changed how repayment of loans ineligible for loan forgiveness is handled. Rather than requiring the funds to be paid back within two years, the new act requires them to be paid back within five years. This amendment was effective immediately upon the law’s enactment. For businesses that have already obtained funds from lenders, the act leaves room for the lenders to make adjustments to the maturity terms for existing loans in order to comply with these improvements. Additionally, the timeline for deferring repayment has been extended. Lenders can defer all payments—principal, interest, and fees—until the loan forgiveness amount is determined.

●    Greater flexibility for rehiring employees or returning to typical workforce size. As was the case under the original PPP Act, businesses are still required to attempt to maintain or return to their prepandemic average number of full-time equivalent (FTE) employees in order to avoid a reduction in their loan forgiveness amount. However, the new law has provided more flexibility to businesses that seek to restore their workforce to previous levels. First, businesses have been given additional time—until December 31, 2020—to restore their workforces before incurring a reduction in their loan forgiveness amount. Next, small businesses that are still unable to meet the requirement due to challenges in rehiring for post-COVID-19-related reasons may be eligible for additional exemptions under the new legislation. To benefit from the exemptions, businesses must show that because of COVID-19-related orders from the federal government, they have been unable to restore their average number of FTE employees despite having made good-faith efforts to (1) restore the workforce and (2) restore the business to normal business functions. Documentation showing these good-faith attempts is required in order to avoid a reduction in the loan forgiveness amount.

●    Deferment of payroll taxes. The new act expands the number of businesses allowed to defer payroll taxes. Previously, small businesses were given the opportunity to defer payroll taxes, but businesses that had obtained PPP loans were not allowed to take advantage of this option if they also planned to seek forgiveness of their loans. Now, even borrowers who seek and receive PPP loan forgiveness can defer the Social Security tax and 50 percent of the tax on self-employment income from March 27 until December 31, 2020.

Ultimately, the PPP Flexibility Act alleviates many of the pressures small business owners were facing in an attempt to comply with the original PPP requirements under the CARES Act. In light of the changes in the new PPP Flexibility Act, an updated loan forgiveness application is anticipated. Nevertheless, one thing that has not changed is that documentation will still be a critical component of applying for loan forgiveness.

June 17 Update:  SBA and Tresury issued a press release announcing a new EZ PPP Loan Forgiveness Application and a Revised Full PPP Loan Forgiveness Application

For businesses interested in learning more about the loan forgiveness application or how to navigate their way through it, please contact Chris Young at 301-738-2033.

Chris Young
is an associate in the Business & Tax practice at Miller, Miller & Canby. He focuses his practice on corporate legal agreements, business formation, tax controversy work and helping clients deal with new tax regulations. View more information about Miller, Miller & Canby's Business & Tax practice by clicking here.
 





How the CARES Act Affects Your Retirement Plan


The Internal Revenue Service (IRS) recently published questions and answers (click here) regarding retirement provisions in Section 2202 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. In addition to providing the well-known stimulus aid for individuals and the Payroll Protection Program and Economic Injury Disaster Loan programs for businesses, the CARES Act increases accessibility to funds and loans from certain retirement plans and accounts. The information the IRS published clarifies which individuals may benefit from the legislation and which plans and accounts are covered.

Retirement Account Rules Established by the CARES Act
Under Section 2202 of the CARES Act, individuals may withdraw up to $100,000 in “Coronavirus-related” distributions from certain retirement accounts. Distributions are deemed “Coronavirus-related” if they are withdrawn from approved plans between January 1, 2020, and December 30, 2020, by individuals who have been adversely affected by COVID-19 in a number of specified ways (discussed below). Individuals may take distributions from 401(k), 403(b), and individual retirement accounts (IRAs). Under normal circumstances, a 10 percent penalty is imposed on distributions made from these accounts by account owners under the age of 59.5 - the CARES Act now waives this penalty.

In addition to expanding access to retirement distributions, eligible individuals may also take loans of up to $100,000 from their employer-sponsored retirement plans. Prior to the CARES Act, the limit was $50,000 or 50 percent of the vested account balance. Loans taken under this CARES Act provision must be entered into by September 22, 2020. For existing loans, payment due dates have been extended, and repayment is not required through December 31, 2020.

Qualified Participants
Like much of the legislation pertaining to COVID-19, the retirement relief sections were specifically designed to provide broad coverage. According to the IRS information, a qualified participant is eligible for the expanded access set forth in Section 2202 if the participant, the participant’s spouse, or the participant’s dependent was either diagnosed with COVID-19 using a test approved by the Centers for Disease Control and Prevention (CDC) or has experienced “adverse financial consequences” caused by COVID-19. The “financial adverse consequences” experienced by the participant must be the result of one of the following:

  • The participant has been quarantined, furloughed, laid off, or has experienced a reduction of work hours due to COVID-19;

  • The participant has been unable to work due to the lack of child care caused by COVID-19; or

  • The participant has had to reduce business hours or close a business the participant owns or operates due to COVID-19.

An individual who falls within any of these categories is eligible for the expanded distribution and loan options available under the CARES Act.


Additional Benefits for Individuals of Retirement Age
The CARES Act also temporarily suspends required minimum distributions (RMDs) from IRAs, and 401(k) and 403(b) retirement accounts. In general, once an individual reaches a certain age (currently 72 years old per the SECURE Act – click here to learn more about SECURE), the government mandates that the individual begin taking out a minimum distribution to ensure that these retirement funds are not left untouched indefinitely. This temporary suspension of RMDs is unique because it is not limited to retirees impacted by COVID-19. The suspension also applies to:

  • individuals who turned 70.5 years old in 2019 and did not take their RMDs in 2019,

  • individuals who are 72 years old or older, and

  • beneficiaries of inherited IRAs for Decedents who died before 2020.

These law changes allow retirees to keep their money invested for a longer time. If you have already taken an RMD that you were not required to due to the CARES Act, please note that you may be able to redeposit these distributions via rollover provisions, but you must act quickly. In the past, the IRS allowed the rollover of funds within sixty days of withdrawal. Under the CARES Act, however, the sixty-day rollover period has been extended to July 15, 2020.

A Word of Caution
Despite the various new options available under the CARES Act, it is critical to carefully consider whether distributions should be taken from any accounts. The tax implications of these options vary, and action should be taken only after careful consideration of an individual’s personal goals and capacity.

Schedule a Meeting
We know that these are trying times. Let us help you choose the best course of action.  We are more than happy to meet with you by phone or video conference.

David Lucas
is an attorney in the Estates & Trusts and Business & Tax practice groups at Miller, Miller & Canby. He focuses his practice in Estate Planning and Trust and Estate Administration. He provides extensive estate and legacy planning, asset protection planning, and retirement planning.

Contact David at 301.762.5212 or via email. To learn more about Miller, Miller & Canby's Estates & Trusts practice click here.  


 





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