ESSER Update: Where Things Stand & Where They’re Going

With school district budget planning and presentation season underway, no doubt Elementary and Secondary School Emergency Relief (ESSER) funds and spending will be part of the discussion. Between ESSER I, II and III, a total of $189.5 billion in Federal funding was provided starting in 2020. Here’s a look at where things stand now and what may be coming next.

ESSER I was part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in FY 2020 and allocated $13.2 billion. Funds had to be obligated or budgeted by September 30, 2022 and liquidated or spent by January 28, 2023. (Seven states – including Illinois, Indiana, North Carolina, Mississippi, Ohio, Texas, and Wisconsin – along with the District of Columbia received an extension to March 30, 2024 to draw down funds.)

ESSER II allocated $54.3 billion under the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA) in FY 2021. Funds have to be obligated by September 30, 2023 and liquidated by January 28, 2024.

ESSER III was part of the American Rescue Plan and allocated $122.8 billion in FY 2021. Funds must be obligated by September 30, 2024 and spent by January 28, 2025.

Although COVID and all its protocols are becoming a memory, school districts are still dealing with the impact. Initially, funds were used to support continuous learning during the pandemic; reopen schools; and address students’ academic, social, and emotional needs. Then, the funding focus shifted to re-engaging students. Finally, funds focused on recovery, driving educational progress and emotional/mental health, and addressing critical personnel and staffing needs.

Of the Federal funds, New York received $14 billion; the City received $7.66 billion. A November 2022 press release from the Office of the NY State Comptroller revealed big differences in how funds are used. For example, the NYC DOE’s investment in closing the learning gap represents a smaller share of funds than other large NY districts and national peers. Also, while NYC planned to spend 30.6% on operational supports (i.e., reopening costs; teacher retention; learning technology; and existing programs), Rochester and Buffalo allocated about 62%; Syracuse and Yonkers allocated 36% and 38%, respectively.

NYC’s second largest allocation or 28.4% was for full expansion of universal free educational childcare for three-year-olds (although this may be changing to boosting quality of existing programs considering it will cost $752 million annually to maintain an expansion). By comparison, Rochester, Buffalo, Syracuse, and Yonkers were planning to use 2% or less for early childhood education.

NYS Comptroller DiNapoli urged school districts to monitor and report on academic recovery so policy makers and the public can “assess the effectiveness of funding decisions made.”

In late December, a U.S. Department of Education report provided an update on ESSER spending for FY 2021. K12 Dive notes, “The report said while there are ‘hopeful signs of recovery,’ education leaders and their communities at every level need to continue maximizing ESSER funds and other federal, state, and local resources to address student needs. Specifically, the report mentioned academic support through high-dosage tutoring programs and high-quality summer learning and after-school programs. Also emphasized was ensuring adequate staffing levels and mental health supports for students.”

Late last year McKinsey & Company surveyed 260 district leaders and found more than 90% of district administrators faced challenges deploying funds due to administrative hurdles, talent shortages, and lack of planning/operational capacity. Based on results, McKinsey suggests assessing the impact of existing investments to see what worked; developing new initiatives to fill gaps and allocate remaining funds; and re-examining next steps based on a set of defined criteria (i.e., student outcomes). McKinsey notes, “Districts can think beyond the two-year time frame, prioritizing investments in which money can be spent now that will build toward the future and reimagining elements of their education strategy and delivery to better meet students’ evolving needs.”

There are two more reasons to re-evaluate remaining ESSER budgets and plans. Costs have dramatically increased due to the economy. Also, as noted as part of Education Department FAQ updated in December, there are more pressing needs to address the pandemic’s impact on learning and emotional/mental health. In fact, districts are advised against using ESSER funds on new construction projects, according to K12Dive.com.

While your district is focusing on budget season and longer-term plans, you can depend on RBT CPAs to handle your accounting, tax, audit, and advisory needs with the highest levels of ethics and professionalism. We’ve been serving school districts in the Hudson Valley for over 50 years and believe we succeed when we help our clients succeed. Give us a call to see what we can do for you today.

IRS FAQs Clarify Eligible Expenses Under Tax-Advantaged Health Care Accounts

IRS FAQs Clarify Eligible Expenses Under Tax-Advantaged Health Care Accounts

Health Savings Accounts (HSAs), Flexible Spending Arrangements (FSAs), Archer Medical Savings Accounts (Archer MSA), and Health Reimbursement Arrangements (HRAs) give employees the opportunity to set aside pre-tax income to pay for eligible medical expenses (rather than itemize and file for a tax deduction if expenses exceed 7.5% of qualified income). In mid-March, the Internal Revenue Service (IRS) posted frequently asked questions (FAQs) providing more details about the types of expenses that are eligible for reimbursement through tax-advantaged plans.

As noted on IRS.gov, “These FAQs are part of the National Strategy on Hunger, Nutrition, and Health. The National Strategy provides a roadmap of actions the federal government will take to end hunger and reduce diet-related diseases by 2030.”

In keeping with that line of thinking, the FAQs largely focus on costs related to nutrition, wellness, and general health, addressing questions about the cost of nutritional counseling, weight-loss programs, weight-loss food and drinks, gym memberships, over-the-counter medications, and more.

That does not mean a new pair of expensive running shoes is fair game. IRS.gov says, “Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body. These expenses include payments for legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners. They include the costs of equipment, supplies, and diagnostic devices needed for these purposes. They also include the costs of medicines and drugs that are prescribed by a physician. Medical expenses must be primarily to alleviate or prevent a physical or mental disability or illness. They don’t include expenses that are merely beneficial to general health.”

According to the FAQs, dental, eye and physical exams are all considered eligible expenses, as are expenses for alcohol abuse disorder programs and smoking cessation programs. The cost of therapy used to treat a mental illness is eligible, as are costs for nutritional counseling and weight loss programs to treat a specific, physician-diagnosed disease like obesity.

When it comes to the cost of a gym memberships, it’s considered an eligible expense when purchased “for the sole purpose of affecting a structure or function of the body (i.e., prescribed physical therapy for an injury)” or for treating a physician-diagnosed disease (i.e., obesity, hypertension, or heart disease).

More information about eligible expenses can be found in IRS Publication 502, Medical and Dental Expenses, and Tax Topic 502, Medical and Dental Expenses.

These clarifications follow other changes to certain tax-advantaged accounts as the pandemic wound down. For example, certain pandemic relief measures affecting FSAs (like allowing any balance remaining to rollover from one year to the next) ended in 2022, although employers can choose to allow rollovers up to annual limits — $570 for 2023 and $610 for 2024). (Cuadra Deanna. “The pandemic FSA carryover allowance is over: Here’s what’s changed.” November 11, 2022. Benefitnews.com.) Also, the Continuing Appropriations Act of 2023 allows certain telehealth benefits to be provided before a deductible is met under a high deductible health plan, without disqualifying the covered person from being eligible to participate in an HSA. (For more details, visit Fisherphilips.com.)

If you are a plan sponsor, it’s a good idea to let employees know about the clarifications provided in the IRS FAQs, as they could get reimbursed on out-of-pocket expenses that they may have thought were previously excluded.

While you help employees understand how to maximize tax-advantages available in a benefits program, RBT CPAs is here to help you maximize your tax strategy for your business. We’re a leading accounting, tax, audit and business advisory services firm serving the Hudson Valley for over 50 years. To learn more, give us a call. We would love to talk and see what we can do to help you be more successful.

Please note: We are accountants and financial experts – not benefits attorneys. We are providing this content for informational purposes only; it should not be construed as legal advice. If you are considering communicating or making changes to benefits, we strongly encourage you to seek advice from benefits counsel.

When Hospitality Thrives, The Entire Community Benefits

When Hospitality Thrives, The Entire Community Benefits

When people eat, partake in entertainment and travel, they are setting in motion a series of interactions that can help a local community’s economy thrive.

According to Cumberlandbusiness.com, “When you choose to shop or dine at a local business or restaurant, you generate almost four times more economic benefits for your local community.” Fundera reports that when you spend $100 at a local business, about $68 stays in your local community. How is that possible?

It starts with the money a customer spends at a restaurant, hotel, and/or entertainment venue. In turn, those venues pay taxes on income earned and, at least a portion of those taxes get reinvested in the local community’s schools, roads, infrastructure, and more.

The money spent at a local restaurant, hotel, or entertainment venue also helps cover payroll for a business’ employees. In turn, those employees likely spend some of those earnings at other local businesses, whether it’s to put gas in their cars, food on the table at home, or just some retail therapy during breaks. If those employees and business owners live locally, they’re also adding to the local revenue and tax base every time they purchase oil or wood to heat their homes, pay for local recycling services, and more.

Additionally, restaurants, hotels, and entertainment venues are likely purchasing supplies – from food and toiletries to furniture and more – from local businesses. They may also be spending locally on business-related services like accounting, banking, cleaning, maintenance, printing, plumbing, heating, marketing, legal, and snow removal, to name just a few.

Hospitality businesses oftentimes serve as sources of referrals for one and other, as well as local tourist attractions, via flyer displays, placemat advertisements, and verbal recommendations. So, the cycle of spending – and collecting tax dollars within a community – continues.

There’s more. Community-based organizations and non-profits often depend on local hotels, restaurants, entertainment venues and other businesses for financial support, donations, and volunteers for their own fundraisers. According to TheFulfillmentLab.com, “52% of small business owners donate to charity, and of those that donate, 90% donate to local causes.” Again, a portion of funds raised likely get reinvested back into the local community.

There are also big picture benefits. When local hospitality establishments succeed, it can help a community attract and retain other employers, which can translate into more jobs, skills, and tax dollars.

Beyond financial benefits, hospitality businesses fulfill important social and emotional needs. In fact, a study conducted by  TheCustomer, Brand Keys, and Suzy during the Coronavirus quarantine found that the first thing people wanted to do once quarantine restrictions were lifted was eat in a restaurant (that was followed by get a haircut/go to the salon and shopping.)

When hospitality businesses take advantage of all the opportunities available within a local community, and combine that with disciplined business practices as measured by key performance indicators, they not only promote their own success but that of the surrounding community as well. That benefits everyone.

Work Less, Succeed More By Outsourcing the Financial Part of Your Veterinary Business

Work Less, Succeed More By Outsourcing the Financial Part of Your Veterinary Business

Did you happen to notice People Magazine’s recent article entitled: “New Studies Find Veterinarian Shortage Could Leave 75 Million Pets without Medical Care in 2030”? (Bender, Kelli. March 2, 2022.) There’s something ironic about People Magazine profiling the vet shortage; still, it shows just how dire the situation is and why the veterinarian industry needs to change.

The article reports that 2,700 people enter the veterinary field each year and about 2,000 retire. With pet healthcare spending predicted to increase 33% between 2019 and 2029, there will be an estimated shortage of 15,000 vets by 2030. The American Animal Hospital Association (AAHA) reports that number may even be higher, potentially coming in at 18,000 by 2031. What can a veterinary practice do?

I’m a CPA. No one would ever expect me to be able to perform a medical exam or procedure on my 17-year-old Maltipoo (named Angel). So, why are veterinarians expected to take on the dual role of managing a business and practicing medicine? There is another option.

About 25 years ago, I was hired by an animal hospital to do its taxes. Little did I know that engagement would put me on a path to build my career providing bookkeeping, accounting, and advisory services to numerous veterinarian practices in the Hudson Valley and, later, in other locations along the East Coast and across the U.S.

None of the doctors I would come to work with had taken business and/or finance classes while earning their medical degree. Eventually, this put them at a disadvantage. They immediately recognized that by engaging me, they were freed up to do what they were passionate about – taking care of small animals or, in certain cases, equines.

At the same time, I found an industry and clients who really appreciate the value I deliver, which evolved from bookkeeping, account payables and receivables, tax payments, payroll, and budgeting to include financial analysis, forecasting, and strategic business planning. In essence, I became a part-time Chief Financial Officer for many of my veterinary clients. It was a natural fit that benefited everyone. Fast forward to today…

I’m a partner in an accounting firm and most of my clients are veterinarian hospitals and practices. I love their passion for what they do and how much they value what my team and I bring to the table. More than just number crunchers, in the majority of cases, we have become part of our veterinarian clients’ strategic management and planning teams.

We know the right questions to ask and when to ask them. Do you know your numbers? Are you profitable monthly? What is your patient volume going to look like in a recessionary period? Are you getting monthly financial statements and understanding what they mean? Do you know how your business is trending to last year and benchmarking against competitors in the area? Do you need to increase rates to reflect the price of prescriptions and payroll? Given the economic environment, can pet owners afford wellness visits? Are your margins shrinking? Who is monitoring all of this? Where do you want your business to be in five years and how will you get there? Are you thinking about selling? What is your business valuation and how does it impact what you decide to do next?

We also help practice managers and doctors understand how different courses of action will impact business so they can make informed decisions. This type of support is even more meaningful given today’s economic uncertainties; supply chain challenges; changing tax, accounting, and legal requirements; cybersecurity issues; and more.

Plus having knowledge of both the veterinary industry and accounting, tax, and advisory services positions my team and I to bring solutions for a variety of challenges. For example, do you know how the Secure 2.0 Act will allow your employees to pay off student loans while you put matching funds aside for their retirement? Have you explored how the Inflation Reduction Act can help you reduce certain monthly expenses and your carbon footprint?

So, enough about me. What about you? How can RBT CPAs help lighten your workload, respond to current challenges, and set the stage for greater success in the future? We would love to have a chance to speak with you and show how we can deliver value, while freeing you up to do what you do best: take care of animals and their people. Give us a call today.

Beware! Cybercrime Is on the Rise

Beware! Cybercrime Is on the Rise

An increase in the number of cyberattacks against U.S. Housing Authorities – and public sector entities overall – reinforces the need for the highest levels of vigilance and security given the sensitive information their systems contain about residents, employees, suppliers, and more.

According to BlackFog.com, which issues monthly reports on publicly disclosed ransomware attacks (and is adding undisclosed attacks this year), “So far, the first two months of 2023 are showing more reported attacks than in prior years.” The site estimates the percentage of attacks unreported has increased by 543%. In 88% of attacks, data is taken. The average ransom payment in the U.S. as of the third quarter of 2022 reached more than $408,000.

In recent months and years, the frequency of attacks on public housing authorities has increased dramatically.

As reported by the HAI Group – a member-owned insurance carrier founded by and dedicated to public and affordable housing communities – in September of 2021, a housing authority was the target of a cyberattack. A file containing passwords was stored on its main server and enabled cyber criminals to access and lock its main server, resulting in the authority paying a ransom. (To learn the full story, the impact of the attack, and what the housing authority did following the attack, view this 15-minute YouTube video made by the HAI Group in conjunction with the housing authority: The Anatomy of a Cyberattack.)

Techcrunch.com reported that in early 2023, another housing authority confirmed that it was investigating a cyber incident that occurred last November. It came to light in January, when LockBit ransomware gang claimed responsibility for stealing 15 terabytes of data – including personal information about housing assistance applicants, payroll, and accounting. Sample files were uploaded to the dark web with a threat to publish all of the information in late January. It is purported that the agency did not meet the cybercriminals’ ransom demands.

According to TheRecord.Media, in January of this year, yet another housing agency began notifying over 212,000 people that private information about them and possibly their children was leaked in an attack that started last September. The data leaked included Social Security Numbers, names, addresses and birthdays. In addition, the agency was unable to send checks to 8,000 Section 8 federal housing choice voucher program landlords (resorting to manual distribution). Victims have received 12 months of identity protection services, including theft recovery and a $1 million reimbursement policy.

What can your housing authority do to protect its systems and data from ransomware attacks? As reported on HAI.com, “There’s cybersecurity help available, and it comes at no cost to public housing organizations. The Multi-State Information Sharing & Analysis Center (MS-ISAC)–operated by the Center for Internet Security and recommended by the U.S. Department of Homeland Security—provides various free cybersecurity services to U.S. state, local, tribal, and territorial government entities, including public housing organizations.”

More is coming as new laws take effect and evolve; government leaders advocate for new and stronger regulations; the White House issues a new National Cybersecurity Strategy; CISA launches new tools like the Ransomware Vulnerability Warning Pilot; and more.

No doubt, cybersecurity demands an all-hands-on-board approach for housing authorities. To free you up to focus on this and your housing authority’s many other responsibilities, RBT CPAs is here to partner with you on accounting, tax, audit, and advisory services. We’re a leading accounting firm in the Hudson Valley and have been supporting government agencies for over 50 years. To learn more, give us a call.

Please Note: RBT CPAs is an accounting firm – not a technology or security agency. This article is meant to provide an update on the state of cybersecurity for housing authorities, but is in no way intended to provide advice or direction. Please consult the appropriate authorities for cybersecurity planning, direction, and assistance.

Are Alcohol-Related Law Changes on the Horizon in New York?

Are Alcohol-Related Law Changes on the Horizon in New York?

New York Governor Hochul released her 2023 State of the State briefing book in January, outlining the work and plans required to achieve the New York dream. Almost at the end of the document – pages 260 and 261 to be exact – there’s a section on rewriting New York’s Alcohol and Beverage Control (ABC) Law.

To summarize this section of the Governor’s brief, the 90-year-old law has grown organically since prohibition ended resulting in many inconsistencies that make it hard to understand, much less comply with regulations. Concurrently, the governor “will advance a policy-neutral rewrite of the existing ABC Law, in order to improve legibility and understanding of the existing law, and to foster a clearer conversation in the future about any proposed reforms.”

Spectrum News 1 reported, “How those laws change could have a wide-ranging effect on both businesses from restaurants to distributors as well as consumers themselves.” The news channel also noted that the governor is open to change, as seen by her backing of a pandemic-era order allowing patrons to take alcohol to go.

Her momentum carried through to 2022 year-end when, according to ABC50-Now.com, the Governor “signed legislation to update the Alcoholic Beverage Control Law and authorize the New York State Liquor Authority to grant eligible catering facilities a license to serve liquor at weddings, banquets or other functions held at off-site locations.”

As part of her briefing book discussion on New York’s ABC Law, the Governor noted that the New York Commission to Study Reform of the ABC Law is continuing its work. News10 explained the Commission was enacted as part of the 2023 New York State budget to modernize the state’s liquor laws. The 21-person Commission, led by Chairman of the State Liquor Authority Vincent Bradley, will recommend changes and any motion receiving a majority vote will be reviewed for possible legislative action.

By May 1 of this year, the Commission’s report is due and will address “impact of the alcohol industry on the state; development in the law and SLA resources to speed license application processing; and business reform and modernization proposals.”

The NY Liquor Authority website notes, “To garner comment on the items that will be discussed, the State Liquor Authority has created a dedicated email address. Industry stakeholders, community groups, and other interested parties are encouraged to share their comments with the Commission here: abclaw.comments@sla.ny.gov.”

Concurrent with the Governor’s actions, the NYS Senate and Assembly, introduced an amendment on January 31 to “amend the tax law, in relation to the amount of credit for
cider, wine, and liquor under the alcoholic beverage production credit” and “provide parity with beer credit based on the taxes for cider, wine, and liquor.” According to TrackBill.com, a new proposed credit ranges from $.14 to $6.44 per gallon, depending on type of liquor and alcohol content.

You can find more information on New York State taxes, exemptions and credits for the producing, blending, distilling, rectifying and bottling of beer, cider, wine and liquor on NY’s Department of Taxation and Finance website.

We’ll keep you updated as we learn more about proposed alcohol law changes in New York State and at the Federal level (i.e., changes to the Craft Beverage Modernization Act provisions of the Tax Cuts and Jobs Act of 2017 transferred “responsibility for administering refunds, reducing tax rates, and tax credits on imported alcohol from U.S. Customs and Border Protection to the U.S. Department of the Treasury effective January 1, 2023”.)

As you consider possible implications on your business, you can depend on RBT CPAs to help lighten your workload. We’re one of the largest CPA firms serving the Hudson Valley and beyond for over 50 years. We believe we succeed when we help you succeed. To find out more about our accounting, tax, audit, and advisory services, give us a call.

Please Note: RBT CPAs is a CPA firm – not law. We are providing the information above for informational purposes only; please do not construe it as legal advice. As always, if you need legal advice, please contact your local legal counsel.

Will Affordable Housing Turn Things Around for New York?

Will Affordable Housing Turn Things Around for New York?

Early this year, Governor Hochul introduced the New York Housing Compact, a strategy to build 800,000 new homes in the next decade to address the state’s affordable housing shortage. While it will take some time to see where everything lands, a big question remains: Will the Housing Compact address the myriad of challenges New York is facing?

Governor Hochul’s strategy involves setting targets for housing growth in every community; removing obstacles and incentivizing construction; and increasing the housing supply and support for renters and homeowners. Municipalities near MTA rail stations will be required to meet certain density targets for multifamily housing within a half-mile of stations. Localities will decide how to meet targets. A $250 million Infrastructure Fund and $20 million Planning Fund will be available. The new State Housing Approval Board or courts will be involved when proposed housing meet affordability criteria but not zoning.

According to the National Low Income Housing Coalition, “Across New York, there is a shortage of rental homes affordable and available to extremely low income households (ELI), whose incomes are at or below the poverty guideline or 30% of their area median income (AMI). Many of these households are severely cost burdened, spending more than half of their income on housing. Severely cost burdened poor households are more likely than other renters to sacrifice other necessities like healthy food and healthcare to pay the rent, and to experience unstable housing situations like evictions.”

The affordable housing shortage has been linked to New York’s labor situation. As reported in Patch.com, the governor said, “ While over the last decade, New York has created 1.2 million jobs, only 400,000 new homes have been built. Land-use policies statewide are some of the most restrictive in the nation.”

Governing.com reports that the “plan would give the state power to bypass local zoning laws, but local officials want to maintain control of what is built in their communities.” (Weinter, Mark. “New York’s Affordable Housing Plan Bypasses Local Zoning.” February 2, 2023. Syracuse.com.)

Aside from housing, New York faces a population decrease, which is triggering issues in other areas like public school enrollment, funding, and more. As RBT CPAs reported in “What’s Happening with Enrollment in New York Public Schools?”, 2020-2021 showed historically low population growth in the U.S. that started to change in 2022 with a .4% increase attributable largely to more people moving to the U.S. from international locations than leaving and more births than deaths.

However, the Northeast population declined with more people moving out of the region than into it and New York State showing the biggest decline in the country. While New York had more births than deaths, it wasn’t enough to offset losses due to net domestic migration – 300,000 more people moved out of the state than into it, and it’s not just the economically disadvantaged who are leaving.

CNBC reported, “A survey conducted by SmartAsset tracked the movement of people under 35 earning an adjusted gross income of at least $100,000…It seems young professionals are most eager to leave New York. With a net outflow of 15,788, this state had the highest number of individuals leaving by a significant margin.”

As reported by SpectrumLocalNews.com, “Senate Minority Leader Robert Ortt says the cost of living is driving people out of the state. ‘The single biggest threat to the state of New York is the outmigration of our human capital. It’s the loss of future generations of workers, of investors, of employers, taxpayers.’  While housing, no doubt contributes to that, there are a lot of other factors at play, too, like payroll taxes, Medicaid costs, proposed tuition hikes at state public schools, and more. (Reisman, Nick. “Affordability Becomes Watch Word in New York State Budget.” February 17, 2023. Spectrumlocalnews.com.)

Only time will tell whether affordable housing is the key to solving so many of New York’s challenges. To free you up to focus on the many strategies needed to build and maintain economically sound municipalities, RBT CPAs is here to help with your taxes, audits, accounting, advisory services, and more. We’re one of the leading accounting firms in the Hudson Valley, dedicated to helping our clients succeed. Learn more – give us a call.

How Will the End of the Public Health Emergency Impact Your Organization and Finances?

How Will the End of the Public Health Emergency Impact Your Organization and Finances?

Is your organization ready to “unwind” from the Public Health Emergency (PHE) and address the potential impact, financial or otherwise?

Just about three years ago, the U.S. Government issued a nationwide emergency declaration due to COVID. At the end of the day, May 11, 2023, the U.S. PHE expires, along with many temporary changes to health insurance, coverage, and care. This will impact health care providers, insurers, pharmaceutical companies, pharmacies and certain retailers, employers that provide health care coverage, and individuals.

Along with the end of the PHE comes the end of Medicare coverage for free COVID tests and testing, as well as the extra 20% payment for COVID care in the hospital; Medicaid and CHP free testing and COVID treatment services with no cost-share (the latter starts the first calendar quarter one year following the end of the PHE); continuous enrollment in Medicaid (as of March 31); private health insurance free tests and testing services, as well as mandatory out-of-network coverage for both; enhanced federal funding to states (effective December 31); and more.  (For more details, see “Key Flexibilities Triggered by Major Covid-19 Federal Emergency Declarations” at KFF.org.)

In February, the American Hospital Association sent a letter to U.S. Secretary of Health and Human Services Xavier Becerra asking the administration to consider PHE implications on our health care system’s stability. It noted, “The recent decision to sunset the COVID-19 public health emergency (PHE) is a testament to the progress we have made; however, as we prepare for that transition, we should not revert to care delivery as it was prior to the pandemic. Instead let us build on the lessons we have learned and the advancements in care delivery and access we have made. Let us use this crisis to create a more effective, equitable, patient-focused and stable health care system.”

During the PHE, health plans benefited from government coverage of COVID-related expenses, and relaxed HIPPAA and COBRA rules. Before the end of the PHE, they’ll have to negotiate with plan sponsors regarding how these expenses will be covered going forward, even as some prices are still being worked out (i.e., how much pharmaceutical companies will charge for vaccines and treatments). Finally, while significant premium increases didn’t materialize in 2023, there’s concern about the impact cost-shifting to insured patients may have in 2024.

GoodRx reports: “One of the most profound effects of the PHE ending is the potential number of people who will lose Medicaid coverage (5 million to 14 million according to some researchers and nearly 18 million according to the highest estimates).” (George, Cindy. “The End of the COVID-19 Public Health Emergency: What You Need to Know.” March 10, 2023. GoodRx.com.)

The U.S. Department of Health and Human Services (HHS) issued a roadmap for transition, highlighting what will change and what won’t with the PHE’s end. Among the changes is how lab results and immunization data will be reported. Once the PHE ends, the HHS won’t have the authority to require this reporting. The Center for Disease Control is encouraging states to continue sharing vaccine data. Also, hospital reporting will continue but likely at a lesser frequency.

The unwinding is occurring as the health industry faces an uncertain economic environment, supply chain issues, and the labor shortage, leaving questions about how all of this will impact demand for care; debt, liquidity and bond ratings; provider costs, cash, and funding; and more.

No doubt, all healthcare providers, health plans, employers offering coverage, and others will be on the receiving end of patient questions – and possible hostility – about coverage and cost changes. As noted on GoodHousekeeping.com, “It’s unclear just how expensive treating or preventing COVID-19 will be for most Americans currently — but a majority can expect to face new forms of co-pay for tests, treatment and medications starting in May.” (Krstic, Zee. “What Does the End of Covid Emergency Declarations Really Mean?” February 12, 2023. GoodHousekeeping.com.)

To prepare your organization for the unwinding, there are numerous resources available:

Many variables will impact/determine the financial implications of the PHE ending on your organization. As with any legal matter, it’s always best to consult your legal counsel for advice and direction. At the same time and as part of your unwinding activities, you may want to evaluate data on hand to determine the potential financial impact. RBT is here to help guide you through the accounting and tax implications you may want to consider as part of your strategy. Give us a call today.

Pass-Through Entity Tax (PTET): Things to Do ASAP

Pass-Through Entity Tax (PTET): Things to Do ASAP

At RBT CPAs, we’re always ready to take on everything tax- and accounting-related for your organization, so you’re free to focus on driving your business success. Unfortunately, New York’s rules for its Pass-Through Entity Tax (PTET) require you – the business owner – to complete certain tasks. While we can’t automatically do them for you, we are here to guide you – and help where we can – so you have peace of mind that you’ve taken the right steps by designated deadlines to maximize the PTET for your business.

YOUR PTET TO DO LIST

If your business opted in for the 2022 PTET:

  • Are you prepared to pay any balance owed for 2022 as part of your NYS tax filing by the March 15 deadline? RBT CPAs can help you file and pay in conjunction with your regular partnership or S corporation tax filing.
  • Do you want an extension of time to file? A six-month extension to September 15th can be requested; you must still pay the estimated PTET by March 15.
  • Do you want RBT CPAs’ assistance to file your return, file for an extension, or make a PTET payment? We are glad to help! You’ll need to complete Form TR 2000 giving us the authorization to log into your NYS tax account, file your return or extension request, and pay using the tax information you provide regarding how much is owed.

Consider whether your business should opt in for the 2023 PTET:

  • This is a tough one. You will only have financial information for the first few months of the year, so you’ll have to speculate about much of the year’s profits.
  • Take a look at your organization’s cash flow and the potential impact of quarterly payments. You’ll have to make quarterly payments starting in March (and then June, September, and December).
  • Are you considering selling your business or property owned in your partnership or S corporation in 2023? These sales can create significant tax events; a PTET election would help to minimize that tax burden.
  • If you’re unsure whether the benefit outweighs the administrative cost, RBT CPAs can partner with you to provide a PTET cost/benefit analysis for NY and other states.
  • Before making your 2023 election, have a conversation with your RBT CPAs team member.

If your business decides to opt in for the 2023 PTET:

  • Have you completed your election to opt in? You cannot wait until you file your taxes for 2023. Opting in is an additional step you must complete before or on March 15. You, the business owner, must make this election online via your NYS tax account – you cannot delegate this activity to a third party like a tax preparer. Please see here for our step-by-step guide to making your 2023 NY PTET election.
  • If your business is making the PTET election for 2023, have you engaged RBT CPAs to provide estimated quarterly tax payments (due in March, June, September, and December)?
  • If you completed your 2023 PTET election, has your business made its first quarterly estimated tax payment by March 15, 2023?
  • RBT CPAs can assist with certain aspects of this if you provide us with a completed Form TR 2000 (see “If your business opted in for the 2022 PTET” above for details).

If you have any questions or need additional information or assistance, please remember RBT CPAs is here to help. Let us know what you need so you can be 100% confident you’re making the right decisions and taking the right actions for your firm in relation to the NYS PTET.

5 Different Ways to Address the Talent Shortage in Manufacturing

5 Different Ways to Address the Talent Shortage in Manufacturing

Good people are hard to find. Keeping them is even harder. With an estimated 2.1 million unfilled manufacturing positions in the U.S. by 2030 according to the National Association of Manufacturing, manufacturing companies of all sizes need to take action now to attract and retain employees needed for business success today and tomorrow.

Unlike in the past, today’s manufacturer is not only competing against other manufacturers of its size. The war for talent crosses all industries and organization sizes. Whether you’re up against an industry behemoth that can afford top pay and benefits or the restaurant across the street that’s matching your company’s pay for easier work, bringing your recruiting and retention efforts to a new level isn’t optional – in fact, it’s imperative.

Here are five ways other manufacturers are winning the war for talent:

  1. Grow your own talent. As reported in com, when Lucid Motors needed skilled workers for a new plant, it partnered with government, a community college, and the state’s economic development team to build and equip a state-of-the-art training facility focused on car assembly. All 700 of its new employees were trained at the center and ready to work when the new plant opened. Similarly, BMW expanded an apprentice program to four community colleges; opened new training paths for high school seniors; and invested $20 million on a new training center for professional development and technical training. (Keaveny, Chris. “To Address Labor Shortages, Manufacturers Must Become Talent Creators”. 2022. IndustryWeek.com.)
  2. Don’t look in the usual places. Everyone else is already doing that. As reported by MITSloan, “Amsted Rail, a manufacturer of systems and components for freight and transit railcars, is collaborating with a program called c.stars, which puts young adults with a high school diploma or GED through a 14- to 16-week training program followed up by job placement.” (Stackpole, Beth. “Practical ways to tackle manufacturing’s labor crunch.” 2022. MITSloan.MIT.Edu.) Rather than a general job posting site, check out FactoryFix.com’s recruiting automation solution to gain access to a community of 700,000+ manufacturing workers.
  3. Consider “second chance” hiring. As reported by the National Association of Manufacturers, JBM Packaging and Saint-Gobain found engaged and productive employees who would stick around by starting programs to recruit and hire individuals with criminal records. The majority of these employees fill entry-level positions, but about 10% have mechanical, machinist, and other technical skills – that doesn’t even get into the potential tax credits through the Work Opportunity Tax Credit or WOTC. (NAM News Room. “How Manufacturers Should Pursue Second Chance Hiring.” January 2023. org.)
  4. Explore how technology can help you get more work done with fewer people. As reported on com, robotic arms can perform assembly line work; autonomous guided vehicles can transport materials through warehouses and on factory floors; 3D printing has significantly reduced the time required to create design solutions; autonomous machine vision solutions can track, sort, count and do visual quality inspections; and AI-powered systems can connect and manage the manufacturing process from start to finish. (Gow, Glenn. “The Labor Shortage Is Killing American Manufacturing. Here’s How AI Can Bring It Back to Life.” August 2022. Forbes.com.)
  5. Be willing to change. As reported by the Triad Business Journal, at the least, pay needs to be at the marketplace median. Consider novel benefits that are genuinely meaningful to today’s workforce. Let go of outdated policies and practices. Create a workplace people want to be part of. Once you’ve made all of these updates, consider reaching out to ex-employees and letting them know what you’ve learned, how you’ve changed, and how valued they’ll be if they come back. (Brannock Jr, R. Michael. “Manufacturers. It’s Time to Get Serious About Talent.” October 2022. Bizjournals.com.)

For additional insights and assistance recruiting and retaining talent, contact RBT CPAs’ affiliate, Vision Human Resource Services. For accounting, audit, business advisory, and tax services, reach out to your local RBT CPAs office.  We’re the largest accounting firm in the Hudson Valley and we believe we succeed when we help you succeed. Give us a call today.