By Carey J. Messina

Under Louisiana law, one can provide specific directions or the designation of a specific person to control the internment of that person’s remains. The directions must be in the form of a notarial testament or a written and notarized declaration. In the absence of specific directions, the law creates a priority of persons to make decisions.  The person designated to control the disposition of remains in the form of a notarial testament or a written and notarized declaration is given priority. This person is followed by the surviving spouse (if no divorce is pending), a majority of the surviving adult children of the deceased, a majority of the surviving adult grandchildren of the deceased , the surviving parents of the deceased, a majority of the surviving adult siblings of the deceased, and finally a majority of the surviving adult persons having a degree of kinship as provided by law.

Clearly, a single person or persons in second marriages should consider burial instructions. Military personnel are subject to provisions under forms they have executed under federal law.

In providing the methodologies for leaving instructions, Louisiana law provides that such instructions can be given “in the form of a notarial testament”.  A notarial testament involves among other requirements that the testament be signed in the presence of a notary and two witnesses. Well, it looks like this means that one cannot use a handwritten or olograhic will to dispose of remains because such does not meet the form requirements. A lot of times we see burial instructions in wills, but is this the best place to include such provisions. Such wills may be in a safety deposit box or safely concealed in the home waiting to be found. The better practice would be to do a separate document that meets the requirements and put it in the hands of the person one has designated to handle the disposition.

The second methodology for leaving instructions, “a written and notarized declaration”. The statute does not indicate whether an “affidavit” format can be used wherein the “affiant” simply appears or an “authentic act” requiring, among other things, the presence of a notary and two witnesses. When in doubt use the authentic act.

Other matters to consider in burial instructions may include: type of religious service or lack thereof, burial place, disposition of ashes, pallbearers and contents of an obituary.

For more information, contact Carey J. Messina at 225.382.3408 or Kevin C. Curry at 225.382.3484

By: Brian R. CarnieChelsea G. CaswellA. Edward Hardin, Jr.Scott D. HuffstetlerErin L. KilgoreMichael D. LoweZoe W. Vermeulen, and David M. Whitaker

On April 1, the paid leave requirements of the Families First Coronavirus Response Act took effect.

Prior to April 1, the DOL issued both a required employer notice and a series of questions and answers related to the required employer notice under the Act: and  The IRS also issued a series of FAQs outlining required employer documentation of the need for leave (see FAQ 44 – 46).  As the DOL worked on its regulations under the Act, it issued a series of expanding (and sometimes edited and updated) questions and answers related to the Act.  In fact, some of those edits were significant and substantive.

Finally, on Wednesday afternoon, April 1, the DOL rolled out its much-anticipated regulations related to the Act  The regulations generally track the FAQs.  Notably, however, the DOL changed course on an issue that the DOL previously (but indirectly) addressed.  Specifically, in the regulations, the DOL expanded what qualifies as a “quarantine” or “isolation” order for leave purposes under the Act and made it clear that the “[q]uarantine or isolation orders include a broad range of governmental orders, including orders that advise some or all citizens to shelter in place, stay-at-home, quarantine, or otherwise restrict their own mobility.”  The regulations also detail the employee’s right to substitute employer-provided paid leave for unpaid leave under the Act, and also address the employer’s right to require the substitution of employer-provided paid leave for unpaid leave under the Act.  In addition, the regulations described the documentation required to demonstrate the need for leave under the Act.  The DOL had previously edited its FAQs related to documentation of the need for leave, and it is still unclear if an employee is required to provide documentation from his or her health care provider to support the need for leave, or if the employee is merely required to certify the need for leave.

As the DOL (and IRS) field questions related to documentation of the need for leave, these issues may be addressed.  Suffice it to say, issues related to the leave Act are evolving at a breakneck pace.

If you have questions, please contact Kean Miller labor and employment attorneys, Brian R. Carnie (318.562.2652), Chelsea G. Caswell (225.382.3405), A. Edward Hardin, Jr. (225.382.3458), Scott D. Huffstetler (225.389.3747), Erin L. Kilgore (225.389.3712), Michael D. Lowe (318.562.2653), Zoe W. Vermeulen (504.620.3367), and David M. Whitaker (504.620.3358).

By: Jaye CalhounCarey MessinaKevin CurryJason BrownAngie AdolphJ. Mark MillerPhyllis SimsRobert Schmidt, Royce Lanning, and Willie Kolarik

On March 27, 2020, President Trump signed H.R. 748, the Coronavirus Aid, Relief, and Economic Security Act (Public Law No: 116-136, the “CARES Act” or the “Act”).  Title I of the CARES Act creates the Paycheck Protection Program (discussed in more detail here).  Generally speaking, the Paycheck Protection Program permits certain small businesses to apply for a small business loan which may be forgiven, in whole or in part, if the loan proceeds are used to pay for certain eligible expenses, e.g., the payment of certain payroll costs, interest on a covered mortgage obligation, payments under a covered rent obligation, and the payment of certain utilities.

This blog post summarizes significant uncertainties created by tax and accounting issues related to the Paycheck Protection Program.  A separate blog post containing a more detailed review of the tax changes contained in the Act is available here.  Additional details regarding the employment and employee benefits changes is available here.  Additional guidance related to the CARES Act is forthcoming.  All of Kean Miller’s guidance related to the coronavirus pandemic is located here.

Tax and Accounting Issues Raised by the Paycheck Protection Program

Determination of Expenses Eligible for Forgiveness – While the preliminary hurdle for any taxpayer will be the amount of the loan that they are eligible for, it is just a loan unless eligible for forgiveness.  Therefore, of greater importance will be the manner and time within which the loaned funds must be spent to be forgiven.  Otherwise, it is simply a loan that must be repaid.  Section 1106 of the CARES Act defines the expenses that, if paid with the loan proceeds, are eligible for forgiveness.  Payments of eligible expenses related to covered mortgage or rent obligations and covered utility payments must relate to mortgage or lease obligations incurred or in force before February 15, 2020 and utility payments for which service began before February 15, 2020.  The amount eligible for forgiveness is calculated with reference to costs incurred and payments made related to an eligible expense during the 8-week period beginning on the date of the origination of the covered loan.  By computing the amount eligible for forgiveness based on both costs incurred and payments actually made the Act appears to create a hybrid-accounting accrual/cash method of accounting rule for the determination of eligible expenses.

The hybrid accounting method appears to indicate that certain costs, notably payroll costs related to eligible self-employed individuals, need not be actually paid during the covered period.  This may also make sense because it is possible that the date payroll checks are issued for services performed during a portion of the 8-week covered period could fall outside of the 8-week period.  For example, if the 8-week period ends on a Wednesday and the payroll for the week is paid on the following Friday, it appears the Act permits the portion of payroll costs incurred for services performed Monday through Wednesday to be eligible for forgiveness.

Because the amount of the loan is computed with reference to actual payroll costs, it is likely the majority of forgivable expenses paid will relate to payroll actually paid but based on the statutory language as written, it also appears that it may be possible to pre-pay certain eligible expenses.  While unlikely, this situation could arise if, for some reason, a borrower’s covered expenses did not equal or exceed the amount borrowed.  Absent additional guidance, in that situation, a borrower might read the statute to permit the borrower to pre-pay a covered expense.  At this time, it is not clear whether additional guidance will be issued to clarify or impose additional limitations on the calculation of the amount of covered expenses that are eligible for forgiveness.  One practical step a borrower should consider is timing the origination of the loan to coincide with payroll dates to avoid the potential payroll issue discussed above.

Uncertainty Regarding How Certain Business Concerns Should Apply for Relief – The CARES Act should be clarified, ideally by swift legislative action, to make it clear that partners and partnerships are not excluded from the relief provisions.  The Act contains a poorly worded definition of payroll costs that could be read so as to defeat the purpose of the statute.  Specifically, the Act refers only to the net self-employment earnings of a sole proprietor or an independent contractor in the definition of payroll costs, which language may be read to exclude the self-employment of partners in a partnership.  That is, as written the Act does not clearly specify that the net self-employment earnings of certain eligible self-employed individuals, such as partners, should be included in the definition of payroll costs, thereby, creating uncertainty as to the availability of loans to these otherwise eligible individuals and creating uncertainty as to the computation of the amount of loans available to these particular business organizations which constitute a significant part of the United States economy.

As a result of what appears to be at worst, a drafting error, the Act could be read to suggest that a partnership that is a small business concern could not include the net earnings from self-employment of its partners in its payroll costs.  Thus, if the partnership had no employees, under this interpretation, its payroll costs would be zero, and the applicant would effectively be ineligible for relief under the Paycheck Protection Program.  In contrast, if that partnership was structured as an S corporation for tax purposes and its owners received a combination of W-2 wages (included in payroll costs) and dividends (likely excluded from payroll costs) it would be eligible for a higher loan amount since the wages would be considered payroll costs.

The “payroll costs” of an owner of  a single member limited liability company on the other hand, is more clearly covered by the statute even if the limited liability company has no employees and thus no “payroll costs.”  This type of eligible small business concern and is no different in practice than a sole proprietorship operated by an individual in their individual capacity and for tax purposes, assuming no elections are made for an alternative tax treatment, they are indistinguishable.  A limited liability company with a single member is simply “disregarded”.  Nevertheless, while the “payroll costs” of such a limited liability company would not ordinarily include net self-employment income, the Act itself defines “payroll costs” as “the sum of payments of … income of a sole proprietor or independent contractor that is … net earnings from self-employment,…”  In contrast, if that individual did business as a sole proprietor (without the interposition of a limited liability company) his or her  net earnings from self-employment would be included in payroll costs and would more clearly be eligible for relief.

Some of the confusion in the Act is caused by the loose use of terms that have more specific meanings for tax purposes.  While the term “sole proprietor” has a unique meaning for income tax purposes, the term “independent contractor” is not an income tax classification for income tax imposition purposes.  The latter term relates more generally to whether or not a payor is required to withhold the recipient’s income taxes from payments to the recipient and also to whether the payor has to chip in for payroll tax purposes.  It is not an income tax classification like sole proprietor.

Additional confusion results because the Act does not make it clear as to who among possible applicants, in certain circumstances, is entitled to apply for a loan or whether all possible applicants may file.  That is, the Act is drafted in a manner that appears to permit both an eligible self-employed individual, such as a partner or the owner of a single member limited liability company, and the associated partnership or limited liability company to apply for a loan.  However, in both of those instances the unfortunate terminology in the Act used to define “payroll costs’ could cause the loan amount to be zero regardless of whether the individual owner or the entity applied for the loan because in either case the individual owner or owners’ net earnings from self-employment are not defined as payroll costs, for the reasons mentioned above.  Thus, in the case of an entity with no employees that suffered losses related to the pandemic, depending on how the language is interpreted by a decision-maker lender, neither the entity nor its individual owner(s) would be eligible for meaningful relief.

It is not clear how lenders will interpret the definition of payroll costs in this context.  Given the pressing need to distribute cash to business owners quickly, it may be that lenders include payroll costs related to an eligible self-employed individual in the loan calculation.  But issues may arise when the applicant seeks loan forgiveness depending on how the lender interprets the immunity provisions in Section 1106 of the CARES Act.

There is no indication that Congress intended to preclude a large swath of the American economy doing business in partnership form from receiving Paycheck Protection Program loans based solely on their choice of business organization.  It is our understanding that the Small Business Administration is in the process of drafting detailed regulations that will address the computation of “payroll costs” as it relates to partners and partnerships and other businesses as well as their owners, for a Paycheck Protection Program Loan.  As we understand it, the Small Business Administration intends to release that guidance on Friday, April 3.  What is not clear at this point is whether the apparent drafting error will be clarified by regulation or, ideally, a technical corrections act.  It should be noted that, if needed, Congress could pass a statute containing the necessary technical corrections, making the corrections retroactive to the passage of the CARES Act.  Although Congress is not currently in session, ideally any such action could take place prior to the time applicants began seeking loan forgiveness.  Nevertheless, uncertainty about loan eligibility for certain businesses and self-employed individuals may remain for some period of time.

Hopefully the regulations to be issued tomorrow will mitigate at least some of the uncertainty.

Determination of Payroll Costs for a Sole Proprietor, Partner, or Owner of an S corporation – The amount of compensation paid to an eligible self-employed individual is relevant to both determining the amount of the Paycheck Protection Program loan as well as the amount of the loan that may be forgiven.  The term eligible self-employed individual is defined with reference to Section 7702(b) of the Families First Coronavirus Response Act (Public Law No: 116-127).  The Families First Coronavirus Response Act defines an eligible self-employed individual as an individual who:

  1. Regularly carries on any trade or business within the meaning of [IRC Section 1402], and
  2. Would be entitled to receive paid leave during the taxable year pursuant to the Emergency Paid Sick Leave Act if the individual were an employee of an employer (other than himself or herself).

IRC Section 1402 defines self-employment income and generally includes income received by a sole proprietor or a partner in a partnership.

With respect to eligible self-employed individuals, the definition of payroll costs includes net earnings from self-employment.  Taken together with the reference to IRC Section 1402 in the definition of eligible self-employed individual, the reference to net earnings from self-employment appears to mean that the amount of a sole proprietor or partner’s payroll costs is the amount reported on their tax return that is subject to self-employment tax.   Thus, for purposes of determining the payroll costs related to a sole proprietor or an individual partner in a partnership, it appears appropriate to reference the amount of income reported on their individual income tax return that was subject to self-employment tax, which generally includes the gross income derived by an individual from any trade or business carried on by the individual, less deductions allocated to the business, and also includes a partner’s distributive share of income or loss from a trade or business carried on by a partnership.  This position appears to be supported by the Paycheck Protection Program Information Sheet for Borrowers, which was released by the Treasury Department on March 31, 2020.  That said, as noted above, at present a partner is not included in the definition of an eligible self-employed individual and it is not clear how a partnership (or its partners) should apply for a Paycheck Protection Program loan.

Generally speaking, the owner of an S corporation would receive wages (reported on Form W-2) from the S corporation.  It appears those wages would likely be considered to be the S corporation owner’s payroll costs, i.e., it is unlikely the owner of an S corporation could include dividends received in the payroll costs for purposes of the Paycheck Protection Program.

Because the determination of payroll costs for a sole proprietor, partner, or owner of an S corporation is not entirely clear, additional guidance is required.  The lack of guidance is problematic because the amount of a sole proprietor or partner’s payroll costs may be directly related to previously made tax elections or decisions or to decisions currently being considered for their 2019 return.  As a result, it may be necessary to amend previously filed returns or carefully consider decisions related to a 2019 return after additional guidance is released.

Loan Forgiveness –Section 1106 of the Act provides a mechanism under which certain indebtedness related to these loans can be forgiven.  Unless an exception applies, Internal Revenue Code (“IRC”) Section 61 requires a taxpayer to include cancellation of indebtedness income in its taxable income.  Section 1106 creates an exception to IRC Section 61 and provides that loan forgiven under the Act shall be excluded from a taxpayer’s taxable income for purposes of the Internal Revenue Code.  It should be noted that the Act is silent on whether a borrower’s tax attributes will be reduced under IRC Section 108 in the amount of the forgiven debt.  Additional guidance may be necessary to clarify this issue.

Employee Retention Credit for Employers Subject to Closure Due to COVID-19 – Section 2301 of the CARES Act provides an employee retention credit to employers, based on wages (and a proportionate amount of qualified health plan expenses) paid to employees, which is discussed in more detail here.  It is important to note that an employer taking a small business interruption loan under the Paycheck Protection Program is not eligible for the credit.

Deferral of Payment of Employer Payroll Taxes – Section 2302 of the Act also permits an employer to defer the payment of certain employer payroll taxes, which is discussed in more detail here.  The ability to defer payment of payroll taxes may not apply if the employer had indebtedness forgiven under the under the Paycheck Protection Program.

Interplay with the Families First Coronavirus Response Act – It should be noted that for purposes of the Paycheck protection Program payroll costs do not include qualified sick leave wages or qualified family leave wages for which a credit is taken under Sections 7001 or 7003 (respectively) of the Families First Coronavirus Response Act.


The CARES Act contains an unprecedented economic stimulus and the tax provisions are designed to facilitate getting cash to individuals and businesses as soon as possible. Unfortunately, the CARES Act requires many small businesses to make decisions quickly but because of the uncertainty created by the loose language of the Act and the lack of guidance to-date it is not clear how some businesses and business owners can make the decisions most appropriate for their businesses. The apparent drafting error and lack of guidance is particularly problematic for certain business organizations, such as partnerships, because previously taken tax positions or tax positions currently being evaluated may directly impact the amount of their potential Payroll Protection Program loan, including the amount eligible for forgiveness.

Until additional guidance is released, if possible, it may make sense for a business refrain from taking action, which is unfortunate because many businesses are struggling or are in the midst of an existential crisis due to the coronavirus pandemic. It is our hope that the Small Business Administration will release comprehensive guidance on these issues quickly that will mitigate the uncertainty.

For additional information, please contact the Kean Miller Tax Group:  Jaye Calhoun at (504) 293-5936; Carey Messina at (225) 382-3408; Kevin Curry at (225) 382-3484; Jason Brown at (225) 389-3733; Angie Adolph at (225) 382-3437; J. Mark Miller at (318) 562-2701; Phyllis Sims at (225) 389-3717; Robert Schmidt at (225) 382-4621; Royce Lanning (832) 494-1711; or Willie Kolarik at (225) 382-3441.

By: R. Devin Ricci

In addition to providing financial support to individuals and small business, the much discussed CARES Act also authorized government agencies like the US Patent and Trademark Office (USPTO) to extend certain deadlines prescribed by statute. As of time of publication, the USPTO has granted a 30 day extension for (1) the specific filings set forth below that (2) had deadlines which fell between March 27, 2020 and April 30, 2020.  To invoke this extension, the filing must be accompanied by a statement that the delay in responding was due to the COVID-19 outbreak as specified in the Order.


i. reply to an Office notice issued during pre-examination processing by a small or micro entity;

ii. reply to an Office notice or action issued during examination or patent publication processing; issue fee;

iii. notice of appeal under 35 U.S.C. § 134 and 37 C.F.R. § 41.31;

iv. appeal brief under 37 C.F.R. § 41.37;

v. reply brief under 37 C.F.R. § 41.41;

vi. appeal forwarding fee under 37 C.F.R. § 41.45;

vii. request for an oral hearing before the Patent Trial and Appeal Board (PTAB) under 37 C.F.R. § 41.47;

vii. response to a substitute examiner’s answer under 37 C.F.R. § 41.50(a)(2);

x. amendment when reopening prosecution in response to, or request for rehearing of, a PTAB decision designated as including a new ground of rejection under 37 C.F.R. § 41.50(b);

xi. maintenance fee, filed by a small or micro entity; or

xii. request for rehearing of a PTAB decision under 37 C.F.R. § 41.52.


i. response to an Office action, including a notice of appeal from a final refusal, under 15 U.S.C. § 1062(b) and 37 C.F.R. §§ 2.62(a) and 2.141(a);

ii. statement of use or request for extension of time to file a statement of use under 15 U.S.C. § 1051(d) and 37 C.F.R. §§ 2.88(a) and 2.89(a);

iii. notice of opposition or request for extension of time to file a notice of opposition under 15 U.S.C. § 1063(a) and 37 C.F.R. §§ 2.101(c) and  § 2.102(a);

iv. priority filing basis under 15 U.S.C. § 1126(d)(1) and 37 C.F.R. § 2.34(a)(4)(i);

v. priority filing basis under 15 U.S.C. § 1141g and 37 C.F.R. § 7.27(c);

vi. transformation of an extension of protection to the United States into a U.S. application under 15 U.S.C. § 1141j(c) and 37 C.F.R. § 7.31(a);

vii. affidavit of use or excusable nonuse under 15 U.S.C. § 1058(a) and 37 C.F.R. § 2.160(a);

viii. renewal application under 15 U.S.C. § 1059(a) and 37 C.F.R. § 2.182; or

ix. affidavit of use or excusable nonuse under 15 U.S.C. § 1141k(a) and 37 C.F.R. § 7.36(b).

Note that the Order opens the door for an applicant to petition for additional relief; however, the Order does not extend the deadlines to file patent applications with the USPTO. Anyone seeking to maintain provisional patent application priority should immediately consult with his or her attorney.

For a full copy of the USPTO’s notices, please see: for patent and for trademark.

By: Hannah D. Robinson and Ben K. Jumonville

On March 26, 2020, Governor John Bel Edwards issued Emergency Proclamation 37 JBE 2020 (the “Proclamation”) providing certain measures intended to aid Louisiana businesses in navigating the COVID-19 pandemic, including a temporary suspension of the statutory requirement that Louisiana corporations notice and hold annual and special shareholder meetings at a physical location.

Generally, corporations governed by the Louisiana Business Corporation Act (the “Act”) are required to hold annual shareholder meetings, as well as “special” shareholder meetings under certain circumstances. The Act provides that annual and special shareholder meetings are to be held at the corporation’s principal office, unless the time and location is designated in the corporate bylaws, in the case of annual meetings, or in the corporate bylaws or through resolutions adopted by the corporation’s board of directors, in the case of special meetings.

Section 5 of the Proclamation suspends any such physical location requirements contained in the Act for any shareholder meeting that either:

(a) has a record date that falls within the public health emergency declared by Governor Edwards pursuant to Emergency Proclamation Number 25 JBE 2020 (originally in effect commencing March 11, 2020 to April 9, 2020), or any extension thereof pursuant to a subsequent proclamation;

(b) requires notice to be given in connection with such shareholder meeting during the public health emergency declared by Governor Edwards pursuant to Emergency Proclamation Number 25 JBE 2020 (originally in effect commencing March 11, 2020 to April 9, 2020), or any extension thereof pursuant to a subsequent proclamation; or

(c) is scheduled to occur during the public health emergency declared by Governor Edwards pursuant to Emergency Proclamation Number 25 JBE 2020 (originally in effect commencing March 11, 2020 to April 9, 2020), or any extension thereof pursuant to a subsequent proclamation.

In light of federal and state guidelines on social distancing implemented in connection with the novel coronavirus, corporations governed by the Act may want to take advantage of the Proclamation and conduct shareholder meetings by means of remote communication utilizing the remote participation provisions contained in the Act. Alternatively, in lieu of a shareholder meeting, the Act permits shareholders to approve by written consent any corporate action requiring a vote of the shareholders, provided such written consent is signed by all of the shareholders entitled to vote on the action. Corporations considering conducting a shareholder meeting remotely or taking action pursuant to shareholder written consent should carefully review their bylaws and other corporate governance documents prior to taking any such action.

The Proclamation does not apply to entities not governed by the Act, including, for example, limited liability companies and partnerships.

A copy of the Proclamation can be found here.

By: Jaye CalhounCarey MessinaKevin CurryJason BrownAngie AdolphJ. Mark MillerPhyllis SimsRobert Schmidt, Royce Lanning, and Willie Kolarik

On March 27, 2020, President Trump signed H.R. 748, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act” or the “Act”).  The CARES Act makes significant changes tax related employment and employee benefits changes in the form of a number of relief provisions designed to mitigate the negative economic consequences of the novel coronavirus or “COVID-19” pandemic. The Act complements prior relief legislation, the Families First Coronavirus Response Act (PL 116–127, H.R. 6201).  Due to the unusual speed of the legislative process, the CARES Act may contain technical issues or drafting errors that may have to be addressed in future legislation.

This blog post summarizes several of the most significant employment and employee benefits tax changes for businesses and individuals.  A separate blog post containing a more detailed review of the other tax and accounting changes is available here.  The Kean Miller Tax Group will post additional updates as the situation develops.

In addition to the tax changes, the CARES Act contains provisions designed to provide relief to small businesses, large businesses, and changes designed to support the U.S. health care system.

Section 2202 – Special Rules for Use of Retirement Funds –

Section 2202(a) – Tax Favored Withdrawals from Qualified Plans

The CARES Act provides for tax favored withdrawals from qualified plans.  Under the Act, Internal Revenue Code (“IRC”) Section 72(t) shall not apply to any “Coronavirus related distribution”.  IRC Section 72(t) imposes a 10% penalty on any premature distribution from a qualified plan.  This relief provision applies broadly to eligible retirement plans, including individual retirement accounts and annuities, plans qualified under IRC Section 401(a) and 403(a), tax sheltered annuities under IRC Section 403(b) or governmental  deferred compensation plans under IRC Section 457(b).  A distribution is considered to be a coronavirus related distribution if it is made between January 1, 2020 and December 31, 2020 to an individual that satisfies one of the following criteria:

  1. An individual diagnosed with COVID-19 virus by a test approved by the Centers for Disease Control and Prevention (the “CDC”); or
  2. An individual whose spouse or dependent is diagnosed with COVID-19 virus; or
  3. An individual who has incurred adverse financial conditions resulting from quarantine, furlough, layoff, or reduction of hours associated with COVID-19; or
  4. An individual that is unable to work due to lack of childcare resulting from COVID-19; or
  5. An individual who is unable to work as a result of the closing of a business owned or operated by the individual due to the COVID-19 virus.

The plan administrator of a qualified plan may rely on a certification from the employee that he or she meets the conditions of an individual entitled to such a distribution.

The amount of the Coronavirus related distribution may not exceed $100,000 for any taxable year with respect to an individual.  Notwithstanding this, the employer sponsor of a qualified plan is permitted to make a distribution from the plan to a particular individual provided that all such distributions from all such plans maintained by the employer and any members of the employer’s controlled group to that individual do not exceed $100,000 in the aggregate.

The consequences of a distribution being a Coronavirus related distribution are that: (1) the distribution is permitted under a plan notwithstanding the other limitations on distributions from the plan for 401(k) distributions, or distributions by 403(b) or 457 plan; (2) the distribution is not subject to penalty under IRC Section 72 (t) of 10% of the amount of the early distribution; (3) although the distribution is taxable, the income from the distribution is spread ratably over three years, unless the employee elects to have it taxed in the year of the distribution; (4) the distribution is exempt from withholding; and (5) the distribution may be repaid in whole or in part (thereby avoiding income taxation to the employee/distributee) at any time within three years from the date of the distribution.  The repayment may be made to any eligible plan, in which case it is treated as a rollover within 60 days from the date of distribution; that is, it is not taxable.  The amount of the distribution to be repaid may not exceed the amount of the distribution.

If a plan sponsor chooses to allow Coronavirus related distributions, the sponsor must amend its plan to do so. Specifically, employers have until the last day of the plan year beginning on or after January 1, 2022 to make an amendment to their plan incorporating these provisions, provided that the amendment is consistent with the CARES Act, the plan is operated in accordance with the amendment, and the amendment is retroactive.

Section 2202(b) – Increase to Limits on Loans Made from Qualified Plans

The CARES Act increases the limits on loans that are permitted to be made from qualified plans to certain “qualified individuals” without tax.  Qualified plans for this purpose include plans qualified under IRC section 401(a), 403(a) and 403(b), as well as governmental plans.  The dollar limit is increased from $50,000 to $100,000, and the percentage of the participant’s vested accrued benefit that can be loaned is increased from 50% to 100%.  The loan may be made during the 180 day period beginning on the date of enactment; after that date, the old limits will apply to any new loans.

Example:  Employee C, who has been diagnosed with COVID-19 virus, has accrued a vested benefit under his employer’s defined benefit pension plan that has a present value of $150,000 as of April 1, 2020.  He may borrow $100,000 from the plan as of that date.

In addition, if any payment is due on any loan to a qualified individual (including pre-existing loans outstanding on March 27, 2020) between March 27, 2020 and December 31, 2020, the payment may be delayed for one year.  Subsequent payments will be adjusted to reflect the delay and interest accrued during the period of the delay.  In determining the 5-year period during which the loan is required to be paid, the period from March 27, 2020 to December 31, 2020 is disregarded; that is, the 5-year period is extended by that period of time.  A qualified individual is an individual that satisfies one of the criteria required for an individual to receive a coronavirus related distribution (see above).

The employer sponsoring the plan is permitted to amend the plan to allow for such loans by the end of the plan year beginning on or after January 1, 2022, provided that the plan is operated in accordance with the CARES Act, is operated as if the amendment had been made, and the amendment is retroactive.

Section 2203 – Temporary Waiver of Required Minimum Distribution Rules For Certain Retirement Plans and Accounts – The CARES Act provides for the elimination of the required minimum distributions (“RMDs”) due in 2020 from certain defined contribution plans (including plans qualified under IRC Section 401(a), annuity plans under IRC Section 403(a), tax sheltered annuities under IRC Section 403(b), as well as governmental 457(b) plans) and individual retirement accounts and annuities.  For persons who turned 70 1/2 before 2019,  the RMD due for 2020, is not required.  For persons who turned 70 1/2 during 2019 and who did not take the RMD during 2019, the required beginning date is April 1, 2020; That is, the April 1, 2020 RMD has been eliminated by the CARES Act, as well as the second RMD otherwise due for 2020 by December 31, 2020.  The elimination of the RMD, however, does not apply to defined benefit plans, including cash balance plans.

It may be possible for persons who have taken an RMD during 2020 to treat the distribution as a rollover under the 60-day rollover rules and recontribute it to an eligible retirement plan within 60 days of the original distribution date.  It may also be possible to treat the distribution as a coronavirus related distribution, in which case it may be recontributed over a 3-year period.

Example:  Employee D participates in a cash balance plan and a 401(k) plan with his employer.  He also has a separate IRA.  Employee D turned age 70 1/2 during 2019 and did not take any RMD distribution from the qualified plans or from the IRA during 2019.  Employee D will not have to take an RMD from the 401(k) plan or from the IRA during 2020, including the 2019 distribution that was due by April 1, 2020.  However, Employee D will have to take the 2019 RMD from the cash balance plan by April 1, 2020 and continue to take distributions from the cash balance plan under the payment method selected under the cash balance plan.  If Employee D chooses to take a lump sum distribution from the cash balance plan and roll over to an IRA by April 1, 2020, he will not be able to roll over the value of the RMD payments required for 2020 and he will be able to roll over the remainder to the IRA.  During 2021, he will be required to take an RMD from the rollover IRA in an amount based on the IRA balance at December 31, 2020.

The Act also permits the extension of the 5-year period applicable to a beneficiary of a deceased participant who dies before RMDs have begun, which beneficiary does not elect to commence RMDs within the year following the date of death.  Such beneficiary will have an additional year to take the full amount of the distribution, i.e., the year 2020 is disregarded in determining the end of the 5-year period.

Section 2206 – Exclusion for Certain Employer Payments of Student Loans – The CARES Act provides for the exclusion from the employee’s income of employer payments of student loans on behalf of an employee.  The exclusion applies to payments by employers made after March 27, 2020 (the date of enactment) and before January 1, 2021 and made by the employer on behalf of the employee of payments on principal and interest on a “qualified education loan”.  IRC Section 221(b)(1).  The education loan must have been incurred by the employee for education expenses, e.g., the cost of attendance at an eligible education institution as well as eligible fees, books, supplies and equipment.  The exclusion from income is pursuant to IRC Section 127(c)(1) and means that the employee does not pay income taxes on the amount of the loan payment, but also that payroll taxes do not apply.  The employer, in turn, may take a deduction.  Payments may be made of both principal and interest, but the maximum amount of the exclusion is $5,250.00.  The employer may pay the lender directly on behalf of the employee, but may also pay the employee the amount to be paid to the lender and the employee must use the funds to pay to the lender..

Section 2301 – Employee Retention Credit for Employers Subject to Closure Due to COVID-19 – The CARES Act provides an employee retention credit to employers, based on wages (and a proportionate amount of qualified health plan expenses) paid to employees.  The credit is limited to 50% of wages paid between March 12, 2020 and December 31, 2020 and cannot exceed $10,000 per employee.  An eligible employer is a nongovernmental employer that carried on a trade or business during 2020 and that meets either of the following tests:

  1. Operation of the business was fully or partially suspended due to government orders limiting commerce, travel or group meetings due to COVID-19; or
  2. The business experienced a reduction in gross receipts (determined quarterly as compared with the prior year) of at least 50%, with the credit continuing until the gross receipts in a quarter exceed 80% of prior year levels.

The credit applies to wages paid to employees by the employer, with respect to which the employee is not performing services (for an employer with over 100 employees in the prior year), to wages paid during the period of suspension (for employers with fewer than 100 employees and which are subject to suspension order), and to wages paid with respect to an employee in the calendar quarter during which the substantial reduction in gross receipts applies (for an employer with fewer than 100 employees and which had a 50% decline in gross receipts).  Affiliated employers are considered a single employer for purposes of the 100 employee determination.  Self-employed persons may also claim the credit for their self-employment income.  Tax exempt employers are eligible for the credit.

Wages credited under the Paid Sick Leave or Paid Family and Medical Leave provisions of the Families First Coronavirus Recovery Act are not included.  Employers taking a small business interruption loan are not eligible for the credit.  In addition, an employee for which the employer retention credit is taken is ineligible for purposes of the work opportunity tax credit in IRC Section 51.

The credit is claimed by the employer by reducing the employment taxes payable for all of its employees.  If the credit exceeds the employment taxes, then the employer can claim a refund, which is payable by Treasury under the refund rules for excess employment tax payments.

Section 2302 – Deferral of Payment of Employer Payroll Taxes – The CARES Act provides that the payment of “applicable employment taxes” for the “payroll tax deferral period” is not due until a later date.  Applicable payroll taxes include Social Security and Medicare as well as self-employment taxes.  In the case of self-employment taxes only 50% of the self-employment taxes may be delayed.  The payroll tax deferral period is the period from the date of enactment (March 22, 2020) to December 31, 2020.  One-half of the taxes must be paid by December 31, 2021 and the remainder must be paid by December 31, 2022.  The delayed payment of payroll taxes may not apply to the employer if the employer made a small business loan that is the subject of debt forgiveness under CARES Act Sections 1106 or 1109.

Sections 3201-3203 – Diagnostic Testing and Preventative Services – Section 3201(a)(1) requires that health plans cover the cost of an in vitro diagnostic test for the detection of the coronavirus that causes COVID-19, if the test: (1) is approved by the Food and Drug Administration (the “FDA”); (2) has been requested for emergency use by the developer and certain other conditions are met; (3) has been developed in and authorized by a stateafter notice is given to DHHS; or (4) otherwise approved for use under appropriate guidance.  Health plans and health insurance issuers are required to reimburse the provider of the diagnostic testingat a prenegotiated or for no more than the price of the testing, as published on the provider’s website..

Preventive services and vaccines are also required to be covered by group health plans and health insurance issuers offering group or individual health insurance.  Such plans or policies are required to cover, without cost sharing, any qualified coronavirus preventive services.  Qualified coronavirus services include an item, service, or immunization to prevent or mitigate coronavirus as approved or recommended by testing facilities and CDC.  The effective date of the coverage is 15 business days after the recommendation date.  The coverage must be provided, without cost sharing, by group health plans, health insurance issuers and individual health insurance issuers.

Sections 3601-3606 – Technical Corrections to the Family First Coronavirus Response Act (“FFCRA”) – The CARES Act makes several technical corrections to the limitations that apply per employee to paid leave and emergency paid sick leave under the FFCRA.  Section 3604 provides that the Office of Management and Budget may waive paid family and paid sick leave for certain federal executive branch employees.

Section 3605 of the CARES Act clarifies the FFCRA by providing that re-hired employees are to be eligible for the Family and Medical Leave.  In particular, eligible employees include persons who are employed at least 30 calendar days by the employer from whom leave is requested, who are laid off by the employer not earlier than March 1, 2020, who had worked for the employer for at least 30 of the last 60 days before the layoff and who are rehired by the employer.

CARES Act Section 3606 provides for the advanced refund of credits due under the FFCRA.  In particular, the CARES Act permits treasury to issue rules whereby the credit is refundable and the manner under which the refund may be issued.  It also states that the emplpoyer making late deposits will not be penalized if the failure to make the deposit is done in anticipation of the allowance of the credit.  This is consistent with the allowance by Internal Revenue Service of employers to withhold all payroll taxes of employer and employee and federal income tax withholding payments to the treasury in anticipation of the allowance of the credit, see IR 2020-57.

Section 3608 – Single-Employer Plan Funding Rules – The CARES Act provides for funding relief for single employer defined benefit pension plans.  IRC Section 430(a) and Employee Retirement Income Security Act of 1974 (“ERISA”) Section 303 are modified to permit the minimum required contribution due under IRC Section 430(j), including quarterly contributions, to be deferred during calendar year 2020.  The due date for such amounts that would have been required to have been made during 2020 shall be extended to January 1, 2021.  The amount of the required contribution will be increased by interest.

Section 3701 – Exemption for Telehealth Services – The Act provides for an exemption from the deductible and co-pay requirements for high deductible health plans associated with health savings accounts in the case of telehealth services.  The exemption applies for plan years beginning on or before December 31, 2021.  If a health plan fails to impose the deductible on telehealth expenses and other remote services, the plan shall not lose its status as a high deductible health plan.  The effective date of the change is the date of enactment.

Section 3702 – Inclusion of Certain Over-the-Counter Medical Products As Qualified Medical Expenses – The CARES Act provides that certain over-the-counter medical products can qualify as qualifying medical expenses so as to be payable by a health savings account, an Archer medical savings account, or a health flexible spending account under IRC Section 125.  The medical products include amounts paid for menstrual care products such as tampons, liners, etc.  The change is effective for amounts paid after December 31, 2019 and is a permanent change in the law.


The CARES Act contains an unprecedented economic stimulus and the tax provisions are designed to facilitate getting cash to individuals and businesses as soon as possible.  In general, there is not much downside to permitting qualified plans to offer the distributions and loans to employees.  Most of the other employee and benefit provisions are favorable to both employees and employers and it is desirable for both to become aware of the benefits of these provisions.  . As noted above, employers should review their unique situation as well as their employee benefits plans to determine whether and to what extent to amend sponsored plans in light of the changes in the CARES Act.  For other provisions, such as employee retention credits, it is necessary to consider whether to take advantage of the credit or to use another option, such as SBA loans that may be forgiven, because they are mutually exclusive

For additional information, please contact the Kean Miller Tax Group:

Robert Schmidt at (225) 382-4621; Jaye Calhoun at (504) 293-5936; Carey Messina at (225) 382-3408; Kevin Curry at (225) 382-3484; Jason Brown at (225) 389-3733; Angie Adolph at (225) 382-3437; J. Mark Miller at (318) 562-2701; Phyllis Sims at (225) 389-3717; Royce Lanning (832) 494-1711; or Willie Kolarik at (225) 382-3441.

By: Carey J. Messina

When we meet with clients concerning their estate planning, we want to focus on assets such as IRA’s, life insurance policies, annuities, 401k accounts, and 403b accounts.  We normally refer to these accounts as “non-probate assets”.   Non-probate assets normally pass at death by way of a written beneficiary form.  These forms are usually provided by the IRA custodian, 401k plan trustee, life insurance company, or administrator of the plan.  IMPORTANT – these assets do not pass under the will or through the succession unless the estate has been named as the beneficiary.   There can be negative income tax consequences by naming the estate as the beneficiary of a tax deferred account such as an IRA or 401k plan account.

When consulting with your attorney concerning estate planning, you should review your beneficiary designations on your non-probate assets to confirm they are still correct.  Questions to consider can include:

  • Has a beneficiary died?
  • Has the plan participant remarried?
  • What is the purpose of the use of the plan accounts, annuities or life insurance proceeds at death?
  • Who do you name as a contingent or successor beneficiary if the primary beneficiary dies before you?
  • Is a beneficiary a minor (in which case a trustee of a trust for the minor should likely be named as the beneficiary)?

Yes, a trust can be named as the beneficiary of non-probate assets, which is common for minors, disabled individuals, or to preserve the principal of the asset.  However, before naming a trust as the beneficiary of tax deferred accounts, the income tax issues related to naming a trust as the beneficiary should be considered as part of the equation.  We can help you review your beneficiary forms as part of your estate planning.

For more information, please contact: Carey Messina (225.382.3408) or Kevin Curry (225.382.3484).

By: Angie Adolph

The State Bond Commission has approved an expedited application process for local governments to help manage decreased revenues and increased expenses while dealing with COVID-19.  The application requires a ranking official of a local government to certify that the purpose of the loan is to carry on existing essential local government functions and/or to expand such functions as a result of the COVID-19 pandemic, and to provide information about the local governmental entity’s financial situation, including cash on hand, budgeted revenues, projected revenue losses and increased expenditures, and outstanding debt service.  The ranking official must also identify which bank has approved the financing and terms.  Other ordinary application attachments still must be provided, including the local government resolution, application parameters form, financial disclosure form, debt service analysis, and specified financial documentation.  However, the requirement to provide original documents has been temporarily waived.  The next State Bond Commission meeting is scheduled for April 16, 2020.

By: Jennifer Jones Thomas

Physicians enrolled in Medicare are all-to-familiar with the constraints of the Stark Law which prohibits physicians from making referrals for designated health services (“DHS”) payable by Medicare when the physician (or immediate family member) has a financial relationship with the entity performing the DHS.  On March 30, 2020, CMS announced a number of Stark Law waivers to help put “patients over paperwork” and allow certain referrals and submission of claims that would ordinarily violate the Stark Law.  The waivers include: paying below fair market value for rent, equipment and services; loans between healthcare providers; providing free benefits to hospital medical staff; and increasing the number of beds at physician-owned hospitals.  For physician group practices, medically necessary DHS can be furnished to a patient by a technician or nurse in the patient’s home contemporaneously with a telehealth physician service. Group practices can also furnish medically necessary MRIs, CT scans or clinical laboratory services from mobile units the group practice may rent on a part-time basis.

Supervision requirements are also being waived by CMS. Services requiring direct supervision by a physician or other healthcare provider can now be supervised virtually through real-time audio/video technology.  For services ordinarily provided “incident to” a physician’s service, a physician can enter into a contract with auxiliary personnel such as a home health agency, infusion therapy supplier, or entities that furnish ambulance services to provide care where the physician would bill for the service and the contractor would seek payment from the billing physician.  For non-surgical extended duration therapeutic services provided in hospital outpatient departments and critical access hospitals, general rather direct physician supervision will now be required.  CMS is also waiving the requirement for patients in the hospital to be under the care of a physician.  Hospitals can use other practitioners such as physician assistants and nurse practitioners “to the fullest extent possible.”

During the public health emergency, CMS is waiving national coverage determination (“NCD”) and local coverage determination (“LCD”) requirements for face-to-face visits for evaluations and assessments.  CMS is also waiving the requirement for physicians and non-physician practitioners to perform in-person visits for nursing home residents and allowing telehealth visits instead.  If a NCD or LCD requires a specific practitioner type or physician specialty to furnish or supervise a service, the Chief Medical Officer or equivalent of a hospital or facility has the authority to make the staffing decision.

CMS is temporarily waiving the Medicare and Medicaid requirements for physicians and non-physician practitioners to be licensed in the state where they are providing services.  The healthcare provider:  (1) must be in enrolled in Medicare; (2) must possess a valid license to practice in the State which relates to his or her Medicare enrollment; (3) is furnishing services in a state in which the emergency is occurring in order to contribute to relief efforts; and (4) is not affirmatively excluded from practice in any State that is part of the emergency area.  The physician or non-physician practitioner can seek a waiver by contacting the Medicare Administrative Contractor (“MAC”) for the geographic area.  This waiver allows physicians to bill Medicare for services provided outside of their state of enrollment.  However, it is important to note that this CMS waiver does not waive state or local licensure requirements.   CMS is also allowing practitioners to provide telehealth services from their homes without reporting their home address on their Medicare enrollment and continue to bill from the currently enrolled location.  CMS is also allowing currently opted-out practitioners to terminate their opt-out status early and enroll in Medicare.

By Lauren Rucinski

On Monday, March 30, 2020 the U.S. Department of Health and Human Services (DHHS) issued a notice in the Federal Register declaring certain goods as “scarce,” which means it is illegal to hoard those items. The DHHS is acting under authority granted by President Trump under the Defense Production Act of 1950 (the “Act”).[1]

By declaring certain goods as scarce, the accumulation of those goods (1) in excess of the reasonable demands of business, personal, or home consumption, or (2) for the purpose of resale at prices in excess of prevailing market prices is prohibited.[2] Any person or business who willfully fails to comply is subject to fines up to $10,000 and/or up to one year imprisonment.[3] This is a federal crime that may be investigated by federal law enforcement agencies and prosecuted by the United States Attorneys in each federal district.

The 15 categories identified by the DHHS are:

  1. N–95 Filtering Facepiece Respirators;[4]
  2. Other Filtering Facepiece Respirators (e.g., those designated as N99, N100, R95, R99, R100, or P95, P99, P100);[5]
  3. Elastomeric, air-purifying respirators and appropriate particulate filters/ cartridges;
  4. Powered Air Purifying Respirators (PAPRs);
  5. Portable Ventilators, including portable devices intended to mechanically control or assist patient breathing by delivering a predetermined percentage of oxygen in the breathing gas;
  6. Drug products with active ingredient chloroquine phosphate or hydroxychloroquine HCl;
  7. Sterilization services for any device as defined in section 201(h) of the Federal Food, Drug, and Cosmetic Act and sterilizers as defined in 21 CFR 880.6860, 880.6870, and 880.6880;[6]
  8. Disinfecting devices and products intended to kill pathogens and other kinds of microorganisms by chemical means or physical means;[7]
  9. Medical gowns or apparel, e.g., surgical gowns or isolation gowns;
  10. Personal protective equipment (PPE) coveralls, e.g., Tyvek Suits;
  11. PPE face masks, including any masks that cover the user’s nose and mouth and may or may not meet fluid barrier or filtration efficiency levels;
  12. PPE surgical masks, including masks that covers the user’s nose and mouth and provides a physical barrier to fluids and particulate materials
  13. PPE face shields, including those defined at 21 CFR 878.4040 and those intended for the same purpose;
  14. PPE gloves or surgical gloves, including those defined at 21 C.F.R. § 880.6250 (exam gloves) and § 878.4460 (surgical gloves) and such gloves intended for the same purposes;
  15. Ventilators, anesthesia gas machines modified for use as ventilators, and positive pressure breathing devices modified for use as ventilators (collectively referred to as ‘‘ventilators’’), ventilator tubing connectors, and ventilator accessories as those terms are described in FDA’s March 2020 Enforcement Policy for Ventilators and Accessories and Other Respiratory Devices During the Coronavirus Disease 2019 (COVID–19) Public Health Emergency located here.

The DHHS Notice is available here.

For more information, contact Kean Miller attorneys: Lauren Rucinski (Environmental Regulatory), Maureen Harbourt (Environmental Regulatory), Jennifer Jones Thomas (Health Law) and Scott Huffstetler (Labor and Employment Law, OHSA).


[1] The Defense Production Act is found at 50 U.S.C. § 4501 et seq. via  Executive Order 13910 (, President Trump delegated authority to the Secretary of DHHS to designate materials as scarce under section 102 of the Defense Production Act of 1950, 50 U.S.C. § 4502.

[2] 50 U.S.C. § 4512.

[3] 50 U.S.C. § 4513.

[4] Includes devices that are disposable half-face-piece nonpowered air-purifying particulate respirators intended for use to cover the nose and mouth of the wearer to help reduce wearer exposure to pathogenic biological airborne particulates.

[5] Includes single-use, disposable half-mask respiratory protective devices that cover the user’s airway (nose and mouth) and offer protection from particulate materials at an N95 filtration efficiency level per 42 C.F.R. § 84.181.

[6] Includes devices that already have FDA marketing authorization and those that do not have FDA marketing authorization but are intended for the same uses.

[7] Includes those defined in 21 C.F.R. § 876.1500, § 880.6992, and § 892.1570. and other sanitizing and disinfecting products suitable for use in a clinical setting.