Preparing for 2021

Anyone who works (or volunteers) in local government understands lines and boundaries. One side of the street pays taxes and receives services from one municipality, and the other side, a different one. Ultimately, at 12:00 AM on January 1, 2021 we cross a boundary into a new calendar year. This means many things – some practical and literal, and some that are just plain emotional. The challenges we all faced in 2020, and continue to face today, will persist into 2021. However, the resilience and perseverance we all developed in 2020 will as well and, for that, we're encouraged about 2021.

As we look forward to the reporting that must be done in 2021, we thought it would be helpful to send a reminder regarding several year-end items, which include some updates and changes:

1. At Firefly Admin, we call the steps that the municipality and fire department must take at the conclusion of each calendar year the Census Update Process. In early December, our clients were sent the instructions, forms, and roster by email and ShareFile. If you did not receive it, please contact us immediately.
   
   
2. Although this is a good practice for all years, for the 2020 points year specifically, we recommend that the municipality request that the list of points earned by volunteers show the detail by category. In particular, if your municipality adopted a resolution to award additional points during the COVID-19 pandemic, it is important for the municipality to review the COVID-19 points to ensure they were awarded consistently with the resolution adopted by the Board. These additional COVID-19 points should be awarded uniformly to all active members, and only those who were active members during the municipally-designated COVID-19 period.
   
   
3. If your municipality has not yet adopted a resolution regarding COVID-19 points, it has until April 30, 2021 to do so. We have a lot of information on our blog, which you can reference here: www.fireflyadmin.com/blog/category/covid19/
   
   
4. The IRS has made changes to the 1099-MISC form, and released a new form called the 1099-NEC. We engaged an attorney with specific expertise with the Internal Revenue Code and tax forms, and we’ve confirmed that the 1099-MISC remains the most appropriate form to report LOSAP payments. By law, these forms must be postmarked by January 31, 2021, which means your participants will receive them by the end of January or possibly early February. If a participant needs their tax form sooner, please contact our office and we’ll see what options are available to provide the form earlier.
   
   
5. Payments from a New York State LOSAP are largely exempt from New York State income tax, but some exclusions apply! The taxpayer must be over age 59 ½ and the payment must not be a lump sum. Read more at www.fireflyadmin.com/NYSTAX/.
   
   
6. The State recently released a bulletin regarding the reporting of fiduciary activities as required by GASB Statement 84. This changes how LOSAP assets are reported on the Annual Update Document (AUD). On page 7 of the bulletin is a paragraph about the LOSAP assets, and it includes a sentence that requires future LOSAP payable amounts that meet the GASB’s definition of a liability to be reported a certain way. Your treasurer should be proactive about reaching out to your external auditor or the Office of the State Comptroller for guidance regarding the implementation of these changes in reporting the LOSAP assets and payables. You can read the bulletin here: https://www.osc.state.ny.us/files/local-government/publications/pdf/accounting-and-financial-reporting-for-fiduciary-activities-gasb-84.pdf

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We look forward to serving you in 2021. Thank you for your trust – it is our daily goal to validate the faith placed in Firefly Admin.