As year-end approaches it is a good time to review the rules related to accrued wages.
In order for wages accrued but not paid at year-end to be considered an allowable cost for that year, the wages need to be paid within 2 ½ months of year end (March 15th). This includes payroll, incentive compensation, owner/management wages not paid in order to conserve cash flow (deferred compensation).
If owner/management has accrued compensation and wants to insure the cost is allowable, but at the same time not deplete cash, one option is to make the payments, and have the owner/management loan the money back to the company. However, keep in mind that the amount of money coming back to the company will be less than the amount paid since income payroll taxes will be withheld.
Another Letter from one of our clients about the upcoming commercial benchmark commenting period. The extended period helps SBIR companies get more time to review the proposal and submit input to ensure the SBIR/STTR Programs work the way they’re supposed to via the SBIR Reauthorization. Read below for more:
Dear SBIR/STTR Advocates,
Yesterday, the Small Business Administration (SBA) announced it is re-opening the comment period for the Commercialization Benchmark for the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs that closed on Monday, September 9th. The comment period will now be open through October 28, 2013. SBA also announced the effective date for the benchmark was moved from October 7, 2013 to November 15, 2013.
Thankfully, Acting SBA Administrator Hulit listened to the concerns of the small business community and the Members of Congress who re-authorized the SBIR and STTR programs. The extended comment period will give SBIR’s stakeholders more time to understand the proposed benchmark and give their input to ensure these programs work the way Congress intended.
Last week, I sent a letter to Acting SBA Administrator Jeanne Hulit asking SBA to re-open the comment period.
In that letter, I wrote:
“During the final negotiations of the comprehensive SBIR/STTR Reauthorization Act (P.L. 112-81), Congress included a requirement of notice and comment so that the public would have a meaningful amount of time to analyze and comment on any system, standard or approval benchmarks proposed to evaluate the commercialization of SBIR and STTR firms before the benchmarks would go into effect. The Senate intended for the comment period to be at least 60 days. I appreciate that the Notice for the Commercialization Benchmark complies with the law, but would emphasize that 60 days is a minimum.”
I am proud to have successfully led the fight to include a six-year extension of both the SBIR and STTR programs in the 2012 National Defense Authorization Act, and I will continue to oversee the implementation of these re-authorized laws to ensure they work for small business.
Click here to see the SBA notification published in the Federal Register.
If you have any questions or feedback about this, please contact Kevin Wheeler at Kevin_Wheeler@sbc.senate.gov on my staff.
All the best,