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Liquidity is the lifeline of any nonprofit organization. Strong liquidity ensures uninterrupted programs, financial stability, and the flexibility to respond to unexpected challenges. This article shares practical steps to monitor and manage liquidity effectively, including setting clear policies, tracking cash flow, using key financial ratios, managing reserves, and leveraging technology. By following these best practices, organizations can maintain resilience, build trust with stakeholders, and stay focused on their mission—even during uncertain times. 

What is liquidity and why it matters 

Liquidity refers to your ability to pay the bills on time, every time. For nonprofits, strong liquidity means uninterrupted programs, happy staff, and the flexibility to handle unexpected challenges. Weak liquidity? That’s like running a marathon without water stations. It’s not pretty. 

Building a solid foundation 

Start with a clear liquidity policy. Define minimum and target levels. Many organizations aim for at least three months of operating expenses. Spell out who monitors compliance and what happens if thresholds aren’t met. A written policy avoids panic and promotes accountability. 

Next, keep an eye on cash flow. A rolling forecast is your financial weather report. Update it monthly—or weekly during uncertainty—to project inflows like grants and donations and outflows like payroll and rent. Comparing actual results to forecasts helps you spot gaps early and act before they become crises. 

Know your numbers 

Ratios tell the story. The current ratio (current assets divided by current liabilities) shows if you can cover short-term obligations; aim for above 1.0. The operating reserve ratio (unrestricted net assets divided by annual expenses) measures your ability to weather revenue shortfalls. Tracking these trends over time helps you plan. 

Operating reserves are your safety net. Target three to six months of expenses and keep funds accessible. Require board approval for use because rainy-day money shouldn’t fund sunny-day shopping. 

Stay on top of receivables and payables 

Stay up to date with accounts receivable billing and collections, and make sure to collect pledges promptly. Manage your accounts payable smartly. Work to align payments with cash inflows and negotiate terms when needed. These habits prevent liquidity bottlenecks and keep relationships strong. 

Understand restrictions and communicate 

Restricted funds aren’t for general expenses, so track them carefully to avoid compliance headaches. Review donor agreements regularly—because “oops” isn’t a strategy. And don’t keep liquidity conversations behind closed doors. Share updates with your board and key stakeholders. Transparency builds trust and can even spark extra support when times are tight. 

Use technology to your advantage 

Modern financial tools can automate forecasts, flag risks, and provide real-time dashboards. Cloud-based systems make oversight easier and reduce manual errors, giving leadership the data they need to make smart decisions. 

When liquidity gets tight 

Act fast: accelerate receivables, negotiate with vendors, cut discretionary spending, and explore bridge financing or emergency grants. Planning ahead beats scrambling later. 

Monitoring liquidity isn’t about fear; it’s about freedom. Freedom to seize opportunities, weather storms, and keep your mission strong. With these practices, your organization can stay resilient and focused on impact. 

BerryDunn can help 

Our nonprofit experts bring a clear understanding of nonprofit funding, in-depth knowledge of complex compliance requirements, and the industry-specific knowledge necessary for accurate, complete financial reporting. That knowledge informs our work—and enhances your performance by addressing your most important operational challenges. Our team applies industry best practices to help move your organization forward. We provide strategic, financial, and operational support tailored to your mission. Learn more about our team and services.  

The Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-08 in November 2025 to address stakeholder concerns regarding the accounting for acquired financial assets under current US GAAP. This update specifically amends the guidance for purchased loans, aiming to improve comparability, consistency, and decision usefulness in financial reporting.

Key differences from current US GAAP  

Under existing US GAAP (Topic 326), acquired financial assets are classified as either:  

• Purchased Credit Deteriorated (PCD) assets: Accounted for using the “gross-up approach,” which recognizes an allowance for expected credit losses (ACL) at acquisition, offset by a gross-up adjustment to the purchase price.
• Non-PCD assets: Recognized at fair value with an ACL charged to credit loss expense, which is seen as double counting expected credit losses.  

ASU 2025-08 expands the use of the gross-up approach to a broader population of acquired loans, specifically “purchased seasoned loans.” These are defined as loans (excluding credit cards) acquired without significant credit deterioration and deemed “seasoned”—either obtained in a business combination or purchased at least 90 days after origination, provided the acquirer was not involved in the origination.  

This change eliminates much of the complexity and subjectivity in distinguishing between PCD and non-PCD assets and reduces the risk of double counting expected credit losses that are already reflected in fair value measurements determined at the time of acquiring the financial assets. 

Effective date for ASU 2025-08 

ASU 2025-08 is effective for all entities for annual reporting periods beginning after December 15, 2026, and interim periods within those annual periods. Early adoption is allowed.  

Transition methods 

The amendments must be applied prospectively to loans acquired on or after the initial application date. Early adoption is permitted for interim or annual reporting periods in which financial statements have not yet been issued or made available for issuance. If adopted in an interim period, the amendments should be applied as of the beginning of that interim period or the annual period that includes it.  

Rationale and benefits 

The FASB’s post-implementation review revealed that the dual approach for PCD and non-PCD assets under current US GAAP created unnecessary complexity, reduced comparability, and did not accurately reflect the economics of acquired financial assets. The gross-up approach, now expanded to purchased seasoned loans, better aligns accounting with the economic reality that the fair value of acquired assets already incorporates expected credit losses. This method:  

• Enhances comparability and consistency across entities.  
• Reduces complexity and subjectivity in acquisition accounting.  
• Minimizes the “double count” of expected credit losses, improving the usefulness of financial information for investors and other stakeholders.  
• Is expected to reduce costs and operational burdens associated with the previous model. 

Journal entry examples 

The following journal entries are meant to display the differences in accounting for acquired loans as a result of ASU 2025-08. Thus, this is a simplified example. Acquisition accounting, particularly for business combinations, tends to be much more complex. Stay tuned for additional resources on acquisition accounting. 

Before ASU 2025-08 (current US GAAP)  
 

A. Purchased Credit Deteriorated (PCD) loan (gross-up approach)  

At acquisition: 

• Record the loan at purchase price (fair value).  
• Recognize an ACL.  
• Increase the fair value by the ACL.   

Journal Entry: 

Dr. Loan Receivable                                          $1,000,000 
          Cr. Cash                                                                        $950,000 
          Cr. Allowance for Credit Losses                                    $  50,000 

(Assume purchase price is $950,000 and ACL is $50,000) 

B. Non-PCD loan (day-one expense approach)

At acquisition: 

• Record the loan at purchase price (fair value).  
• Recognize an ACL with a charge to credit loss expense.  

Journal Entry: 

Dr. Loan Receivable                                    $950,000 
Dr. Credit Loss Expense                              $  50,000 
             Cr. Cash                                                                      $950,000
             Cr. Allowance for Credit Losses                                  $  50,000 

(Here, the ACL is recognized as an expense, not as a gross-up to the loan balance.)   

After ASU 2025-08 (for purchased seasoned loans) 
 

All purchased seasoned loans (excluding credit cards) are accounted for using the gross-up approach, regardless of credit deterioration. 

At acquisition: 

• Record the loan at purchase price (fair value).  
• Recognize an ACL.  
• Increase the fair value by the ACL.    

Journal Entry: 

Dr. Loan Receivable                                           $1,000,000 
                 Cr. Cash                                                                  $950,000 
                 Cr. Allowance for Credit Losses                              $  50,000   

(Same as the PCD approach but now applied to a broader population of acquired loans.)  

Improvement in accounting for acquired loans

In summary, ASU 2025-08 represents a significant improvement in the accounting for acquired loans, providing more meaningful and decision-useful financial reporting while streamlining the application of credit loss standards. Although not seen as a cost-burdensome ASU to adopt, as most information needed to adopt the ASU should be readily available, the ASU does introduce a new concept, namely, purchased seasoned loans. Thus, those impacted by the ASU should start assessing its impact now, especially given early adoption may be seen as favorable since the ASU is expected to reduce complexity compared to current US GAAP.  

As always, your BerryDunn team is here to help. Learn more about our team and services, and reach out with questions on the ASU or acquisition accounting. 

On November 5, 2025, the US Supreme Court heard arguments in Learning Resources, Inc. v. Trump, a case that challenges President Trump’s authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). If the presidential power to impose tariffs is ruled unconstitutional, importers could qualify for duty refunds and must act fast. A decision is anticipated in late 2025 or early 2026. 

Background 

Under IEEPA, the President may act to address any unusual or extraordinary foreign threat that endangers national security, foreign policy, or the economy in the US. This authority applies only if the President declares a national emergency. Trump declared such an emergency on April 2, 2025, citing the trade deficit and illegal immigration. Since February 2025, the Administration has imposed significant tariffs under IEEPA, including: 

• 10% minimum tariff on most imports 
• 50% tariff on copper, steel, and aluminum 

• 20 – 40% tariffs on most goods from Brazil, India, Canada, Mexico, and China 

President Trump’s use of IEEPA to impose tariffs has raised constitutional concerns. Challengers to this authority argue that IEEPA does not authorize the imposition of tariffs and that only Congress may regulate foreign commerce. 

Key actions for importers 

If the Court finds the presidential power to impose tariffs unconstitutional, importers may be eligible for refunds of duties already paid. However, refund eligibility will depend on timely administrative actions. To prepare, importers should: 

1. Review import activity 
     Identify entries that were subject to IEEPA tariffs. 

2. File administrative protests
    Submit CBP Form 19 protests within 180 days of each entry’s liquidation. 

3. Prepare for possible litigation 
     If protests are denied, consider filing suit with the US Court of International Trade. 

How BerryDunn can help

Our dedicated audit, tax, and consulting professionals understand the impact of tariffs and can assist with developing strategies for refunds as they become available. Learn more about our team and services.  

Read this if you are a CEO, CFO, controller, or finance team leader in the manufacturing industry. 

In a time when operational efficiency and sustainability are more critical than ever, small- and medium-sized manufacturers (SMMs) face a unique challenge—how to modernize without breaking the bank. Fortunately, the US Department of Energy (DOE) offers a solution through its Industrial Assessment Centers (IACs) Program—an initiative that combines expert guidance with financial support to help manufacturers thrive. 

What are IACs? 

IACs are university-based teams that provide free, in-depth energy assessments to eligible manufacturers. These assessments are conducted by engineering faculty and students, typically over a one- or two-day site visit, and include: 

• Engineering measurements 

• Detailed process analysis 

• Specific recommendations with cost, performance, and payback estimates  

After the assessment, companies receive a report with recommendations from the assessment team. 

DOE energy-saving implementation grants 

The DOE’s IAC Implementation Grants Program (also known as the Industrial Training and Assessment Center Implementation Grant Program) offers up to $300,000 per qualified recommendation to help SMMs implement energy-saving projects. These grants cover up to 50% of implementation costs. 

Who qualifies for IAC services and grants? 

Manufacturers must meet eligibility criteria to receive IAC services and grants, including:  

• Annual revenue: Under $100 million 

• Energy bills: Annual energy bills between $100,000 and $3,500,000 

• Workforce: Fewer than 500 employees at the assessed plant site 

• Ownership: Must have majority domestic ownership and control  
   

BerryDunn can help uncover federal grant opportunities 

At BerryDunn, we help clients uncover opportunities that foster growth. The IAC Program is one such opportunity, especially for companies unfamiliar with federal energy initiatives. The program operates on a rolling basis with relevant deadlines outlined on its website. Whether you're looking to modernize operations or simply improve margins, this program offers a compelling path forward.  

BerryDunn’s team of manufacturing industry professionals offers clients access to global industry knowledge and tailored, practical solutions that address complex operational, investment, risk management, and compliance challenges. We work collaboratively with each client, engaging in close communication to understand current practices and build actionable strategies for short- and long-term success. Learn more about our services and team.  

H.R. 1, previously titled the “One Big Beautiful Bill Act”, represents one of the most comprehensive federal policy changes in recent decades. It touches healthcare, taxes, and social programs, shifting financing and administrative responsibilities across federal, state, and local governments. The Congressional Budget Office (CBO) estimates it will reduce federal Medicaid spending by roughly $0.9 to 1 trillion over ten years and lead to about 16 million fewer people with coverage, split between Medicaid (~7.8 million) and the Affordable Care Act (ACA) Marketplaces (~8.2 million) over the same period. This overview summarizes H.R. 1’s key provisions and their implications for states, consumers, providers, and payers.

Medicaid: Financing and administrative changes

Work requirements. Most adults ages 19–64 must now document at least 80 hours per month of work or a qualifying activity to maintain Medicaid coverage. Individuals who do not verify compliance lose eligibility for both Medicaid and ACA Marketplace premium tax credits. Exemptions apply for pregnant people, caregivers, and those recently released from incarceration, among others. Research shows most adults on Medicaid already work or qualify for an exemption; KFF estimates that in 2023, 64% were employed and over 90% were either working or exempt.

Faster renewals and more verification. Expansion adults must now renew eligibility every six months, and states are required to conduct additional verification and interstate data-matching. These steps are intended to strengthen program integrity by improving the accuracy of eligibility determinations and reducing improper payments. They may also add administrative complexity and raise the risk of coverage loss for eligible individuals—particularly those with unstable housing, limited internet access, or language barriers.

Provider taxes. The federal “safe harbor” cap on provider taxes will decrease from 6% to 3.5%. States have historically relied on these taxes to generate federal matching funds—accounting for about 17% of non-federal Medicaid financing in 2018, or 28% when including local contributions (MACPAC). The lower cap may prompt states to reassess Medicaid financing strategies and weigh trade-offs in how programs are structured.

State Directed Payments (SDPs) and rural care. Beginning in FY 2028, SDP limits will be tied to Medicare rates, reducing states’ flexibility to supplement managed care payments. With roughly $110 billion in annual SDP spending, largely financed through provider taxes and intergovernmental transfers, this change could constrain a key tool states use to support provider networks in underserved areas. Federal Medicaid spending in rural communities is projected to decline by $155 billion over ten years. A new $50 billion Rural Health Transformation Program aims to offset some of these reductions, with impacts dependent upon state capacity and program decisions.

ACA Marketplaces: Subsidies and enrollment

Stricter verification. Consumers must now fully verify income, immigration status, residency, and family size before receiving premium tax credits (PTCs) or cost-sharing reductions (CSRs). Roughly one in five HealthCare.gov enrollments occur through “passive” renewal; ending automatic re-enrollment for individuals with incomplete verification may increase the risk of coverage disruptions.

Full repayment of excess subsidies. Consumers will no longer have caps on how much excess premium tax credit (PTC) they must repay at tax filing. Some immigration categories will lose eligibility for subsidies, and people enrolling outside a qualifying life event will not qualify for financial assistance. Together, these changes may reduce enrollment continuity and raise financial exposure for households with variable income.

Enhanced subsidies expire. The enhanced premium tax credits (PTCs) introduced under the American Rescue Plan Act and extended through 2025 by the Inflation Reduction Act will expire. Beginning in 2026, subsidies will revert to pre-2021 levels, increasing required premium contributions across income groups. These enhancements had boosted Marketplace enrollment by lowering premiums and eliminating the “subsidy cliff” for many middle-income and older adults.

Analyses by KFF and the Urban Institute project that, without an extension, average consumer-paid premiums could more than double in 2026 and coverage could decline by approximately 4.8 million people. Their expiration has become a central issue in ongoing Congressional negotiations during the federal government shutdown. If no deal is reached, higher premiums and reduced enrollment are likely outcomes.

Ending “silver loading.” Insurers have historically increased silver-tier premiums to offset the cost of providing cost-sharing reductions (CSRs), which raised the benchmark used to calculate premium tax credits (PTCs). H.R. 1 ends this practice. Silver premiums would likely decline along with the benchmark—reducing subsidies across all plan tiers. Brookings estimates that current silver benchmarks are about 28% higher because of silver loading; removing it could lower subsidies by a similar amount. While unsubsidized silver-plan enrollees may see lower gross premiums, many subsidized consumers—particularly those in bronze, gold, or platinum plans—could face higher net premiums and greater sensitivity to income fluctuations.

Coordination gets harder. Medicaid and the ACA marketplaces act as complementary coverage systems, with many individuals moving between them as incomes change. Tighter Medicaid eligibility rules and shorter redetermination cycles may increase these transitions. At the same time, reduced Marketplace subsidies and stricter enrollment criteria may limit affordable coverage options for those losing Medicaid—leading to higher churn, uncompensated care, and pressure on risk pools. These dynamics could create coordination challenges for states and insurers as they manage eligibility transitions and enrollment stability.

Medicare: Payments and innovation models

Eligibility and payments. H.R. 1 narrows Medicare eligibility rules, delays implementation of the 2023 Medicare Savings Program enrollment rule until 2034, and links physician payment updates to the Medicare Economic Index, slowing projected growth after 2027. The law also ends enhanced payments for Advanced Alternative Payment Models (APMs), extends orphan-drug exemptions from federal price negotiation, and postpones new federal nursing home staffing standards until 2034. Changes may affect payment stability and innovation pathways—potentially increasing attribution volatility, complicating risk adjustment, and adding operational and financial complexity for organizations participating in value-based or alternative payment models.

Outlook and implications

H.R. 1 marks a broad realignment of federal health policy, tightening eligibility standards, expanding verification and reporting requirements, and revising financing structures across Medicaid, the ACA Marketplaces, and Medicare. Overall, the legislation redistributes financial responsibilities among federal, state, and local entities and is expected to reshape healthcare coverage, financing, and innovation over the next decade.

Better policy through better information

BerryDunn’s healthcare policy and economics team provides the insights government agencies, healthcare policy research groups, and other organizations need to improve healthcare accessibility and affordability. We have the expertise to inform intelligent, impactful decisions related to healthcare payment reform and cost transparency, to the effect of government mandates on population health and insurance costs, and to market competition. We also have a comprehensive understanding of economic and quality issues in behavioral healthcare—including substance abuse disorder treatment—and of mental health coverage parity. Learn more about our team and services. 

Read this article to get a physician's perspective on onboarding from Alan Weintraub, MD.

For a physician beginning a new clinical role, the onboarding process is more than a formality—it lays the foundation for safe, efficient, and high-quality care delivery. Onboarding, particularly surrounding credentialing, clinical privileging, and provider enrollment, is the bridge between a clinician’s availability and their ability to practice. When this process is fragmented or delayed, it doesn’t just frustrate the provider—it impacts patient access, revenue cycles, compliance, and team morale. A seamless onboarding experience signals to clinicians that the organization values their time, expertise, and contribution to the care continuum. In today’s environment, where every dollar and every patient interaction count, the financial impact of a well-executed onboarding strategy is considerable. 

Creating a strategy for clinician onboarding 

Healthcare organization leaders must recognize onboarding as a strategic lever—not a back-office task. A well-planned onboarding journey, from aligning payer contracting timelines to ensuring organizational and NCQA-compliant credentialing workflows, directly impacts patient care. A streamlined onboarding experience reflects an organization’s commitment to operational excellence and clinician support. 

Onboarding is a continuum of processes and procedures that begin from the time a clinician agrees to join the practice or organization and extends through the first six months to a year after hiring. The continuum consists of credentialing, clinical privileging, payer enrollment, and a set of activities and informational components that equip clinicians with the tools to practice effectively with a goal of establishing a long-term relationship. 

The extensive volume of information that clinicians are often asked to submit during onboarding can be overwhelming, especially when it must be provided separately to different offices, organizations, or locations. This “hassle factor” can result in missing data or documents, errors, delayed start dates, or dissuading clinicians from fulfilling their commitment to join. 

What does streamlined onboarding look like? 

A tight onboarding process should: 

• Accelerate ramp-up time for new providers 

• Reduce burnout by minimizing administrative friction 

• Boost retention by making clinicians feel supported from day one 

• Improve patient access and revenue cycle efficiency 

• Support compliance and revenue integrity 

To create a clinician-focused and efficient onboarding experience, be sure to: 

• Coordinate closely with the hiring team: Provide clear, consistent information about what to expect and plan all aspects of onboarding. Include a checklist of all required information and documents. 

• Provide an onboarding contact: Have a single (ideally) or consistent, identified point of contact for the clinician. 

• Centralize processes and communication: Request documents once and then distribute appropriately. 

• Set a timeline: Goals should be realistic and achievable to help with effective planning and ensure clear expectations. 

• Be consistent with feedback: Provide and request transparent and regular feedback on credentialing, privileging, and the enrollment progress. 

Providers aren’t asking for perfection—they’re asking for clarity, consistency, and connection. An efficient onboarding experience shows that the organization values their time and expertise. It sets the tone for collaboration and trust. With thought, intention, and appropriate resources, you can make onboarding the portal to a thriving clinical workforce. 

BerryDunn’s healthcare compliance team incorporates deep, hands-on knowledge with industry best practices to help ensure your operation is compliant and efficient. Our credentialing team is adept at navigating the challenges providers face. As an NCQA-certified Credentials Verification Organization (CVO), we help clients streamline processes with strict adherence to compliance policies and regulatory standards. Reach out for information about our physician consulting services. 

In today's rapidly changing job market, the importance of workforce development cannot be overstated. As public health evolves and new challenges emerge, both new and seasoned professionals need guidance to navigate their careers effectively. The 2021 Public Health Workforce Interests and Needs Survey found that 16–18% of the workforce considers programmatic expertise highly important to their day-to-day work, yet reports low proficiency in this area. Whether guiding fresh graduates or supporting experienced employees, mentoring is a vital step in the workforce lifecycle. It bridges the gaps from academic learning and onboarding through career transitions to professional growth and expertise, helping individuals move from passion to practice and thrive in their respective areas. 

Workforce Lifecycle Model 

At its core, mentoring is a relationship where a more experienced individual—often referred to as the mentor—offers guidance and support to someone with less experience, the mentee. This relationship can be incredibly impactful, offering insights and advice beyond what is taught in classrooms or learned through hands-on experience alone.

Mentoring facilitates knowledge transfer, allowing mentors to share practical experiences and industry-specific knowledge that help mentees avoid common mistakes and navigate their careers with confidence. Mentors also introduce mentees to professional networks, creating valuable connections that can lead to new opportunities and career advancement. 

Principles of mentoring 

A successful mentoring relationship is built upon several guiding principles: 

Mutual respect: A successful mentoring relationship is built on mutual respect between mentor and mentee. 

• Commitment to growth: Both mentor and mentee should be committed to the personal and professional growth of the mentee. 
• Active listening: Mentors must listen attentively to understand the needs, aspirations, and challenges of their mentees. 
• Empathy and patience: Understanding the mentee's unique situation and providing guidance without judgment. 

Effective mentoring practices for the public health workforce

Effective mentoring is more than just sharing advice. The relationship creates a bond that enables the mentor and the mentee to engage freely, setting the stage for continuous feedback and reflection. Mentors help mentees assess their progress, identify improvement areas, and set achievable career goals. Through regular meetings, mentees can refine their skills, enhance performance, build programmatic expertise, and take meaningful steps toward reaching their professional aspirations. Mentors also foster critical soft skills such as communication, leadership, and adaptability—qualities essential for success in today’s dynamic work environment. 

• Relationship building: Developing trust and open communication is foundational for a successful mentoring relationship. 
• Feedback and reflection: A continuous process of constructive feedback helps the mentee assess progress and areas for improvement. 
• Goal setting: Mentors assist mentees in setting clear career goals, providing a roadmap for professional development. 
• Support for soft skills: Mentors help mentees hone crucial soft skills such as communication, leadership, and adaptability. 

Mentorship benefits all employees 

For those early in their careers, the transition into the workforce can feel overwhelming. Mentorship eases this transition by providing real-world perspective and experience. Internships, projects, and entry-level roles offer opportunities for new graduates to gain practical exposure, and mentors guide them on how to make the most of these experiences. Mentors encourage continuous learning, helping mentees understand that education doesn’t stop after formal schooling. Staying current on industry trends and acquiring new skills are imperative for career advancement. 

Mentoring also helps new professionals establish networks and build relationships that can lead to new opportunities. As mentees build their networks, they develop a clearer sense of their career aspirations. A mentor can help define their path, set clear goals, and take effective steps toward achieving them. For example, one early-career mentee emphasized the importance of a mentor being honest and relatable, preferring face-to-face feedback to foster a personal connection. This mentee shared that their BerryDunn mentor was invaluable in identifying relevant training and certifications that contributed to career progression and personal growth. 

Mentoring also holds great value for experienced professionals. For tenured employees, mentoring offers an opportunity to give back and enhance leadership skills. By guiding younger employees, mentors support growth while strengthening their own leadership development. When experienced employees take on the mentee role, they continue to develop skills key to their current position or future goals. In either case, mentorship benefits both individuals and fosters a more engaged and capable workforce. 

Invest in mentorship: We can help 

Investing in mentorship prepares agencies for the big changes happening in public health. It supports transitions from academia to the workforce, encourages continuous learning, eases career changes, and builds confidence in professionals at all levels. Mentors provide valuable insights, foster career growth, and help develop essential skills needed to navigate workplace complexities. For public health agencies looking to strengthen their workforce, structured mentoring programs offer long-term benefits, improve employee satisfaction, and support ongoing professional development. 

At BerryDunn, we practice what we preach by offering a robust mentorship program accessible to all employee levels. As a testament to its success, the program was recently featured in BerryDunn’s “In the Spotlight” podcast, where an employee shared how mentoring played a key role in their career growth. If your agency is looking to establish a formal mentoring program, BerryDunn can assist by identifying the right approach, implementing effective matching and evaluation strategies, and applying best practices to ensure success. Learn more about our services and team.

Read other articles in the public health workforce series:

Securing the future of public health: Confronting the workforce shortage

Supporting mental wellness in the public health workforce

Public health transformation: Addressing workforce challenges

Starting January 1, 2025, a new individual tax benefit allows taxpayers to deduct certain interest paid on loans for qualified passenger vehicle purchases. This deduction is available through the end of 2028 and presents both opportunities and compliance responsibilities for lenders. 

Eligibility criteria for the deduction 

To qualify, the vehicle must: 

• Weigh less than 14,000 pounds 

• Have its final assembly point in the United States 

• Be purchased after December 31, 2024 

• Be new with its original use beginning with the taxpayer 

Required reporting by lenders 

Lenders must provide borrowers with specific information to support their deduction claims. The required data includes: 

• Total amount of interest received during the calendar year 

• Origination date of the loan 

• Principal balance at the beginning of the year 

• Confirmation that the vehicle meets the eligibility criteria 

If Vehicle Identification Number (VIN) data is not currently captured or is stored in a separate system, lenders should begin exploring ways to access and integrate this information to ensure accurate reporting. 

Transitional relief for 2025 

On October 21, 2025, the IRS announced transitional relief for lenders for the 2025 tax year. Lenders will not be subject to informational reporting penalties as long as they provide the total amount of interest received on qualified auto loans to customers via online banking platforms, regular account statements, or other reliable methods. 

The IRS has not yet issued a specific form or instructions for this reporting and it is not expected to do so for the 2025 tax year. The IRS has indicated that a standardized form (like Form 1098) is expected for 2026 and beyond. 

Reporting deadline 

The deadline for lenders to provide the required information to customers is January 31, 2026. 

Phase-out of the deduction 

The deduction begins to phase out for taxpayers with modified adjusted gross income (MAGI) above $100,000 for single filers and $200,000 for joint filers. Taxpayers above these thresholds will see a gradual reduction in the allowable deduction amount. The deduction is reduced by $200 for every $1,000 of MAGI above these thresholds and is fully phased out at $150,000 for single filers and $250,000 for joint filers.  

What lenders should do now 

• Determine how required information will be reported to borrowers for 2025. 

• Review systems to ensure VIN and vehicle eligibility data can be accessed. 

• Prepare to track and report interest and loan details on an informational tax form starting in 2026. 

• Communicate with borrowers about the upcoming deduction and reporting timeline. 

This new deduction offers a valuable benefit to consumers and a chance for lenders to support tax compliance while enhancing customer service. 

BerryDunn can help 

Our dedicated audit, tax, and consulting professionals understand the financial services industry and its challenges, and are committed to helping you meet and exceed regulatory requirements. We partner with you to bring tailored approaches to fit your needs and operations and provide guidance on best practices and recommendations that make sense for you. Learn more about our services and team. 

Read this if you are a CFO, director of HR, or a retirement plan sponsor. 

Beginning January 1, 2026, significant changes will affect catch-up contributions to retirement plans for high-earning individuals, sometimes referred to as ‘highly paid participants.’ This group of high-earning individuals will be more inclusive than the current definition of a Highly Compensated Employee. The new rules, enacted as part of recent legislative updates, specifically target plan participants whose prior-year compensation exceeds a set threshold and require that their catch-up contributions to 401(k), 403(b), and governmental 457(b) plans be made on a Roth (after-tax) basis. 

This article provides an overview of these new requirements, focusing on the affected plan participants, and discusses the pros and cons as well as key considerations for employers and affected individuals in advance of the transition deadline on December 31, 2025. Importantly, plan sponsors will need to coordinate compliance with their payroll provider and retirement plan recordkeeper. Plan sponsors will also need to communicate the new rules to the affected plan participants. 

Overview of 2026 Roth catch-up contribution changes 
 

Under current law, individuals age 50 and older can make catch-up contributions to employer-sponsored retirement plans, such as 401(k), 403(b), and eligible governmental 457(b) plans. Historically, these catch-up contributions could be made on either a pre-tax or Roth basis, depending on plan provisions and the participant’s salary deferral election. Starting January 1, 2026, however, plan participants whose prior-year Social Security wages with the employer equal at least $150,000 (indexed annually) will be required to make all catch-up contributions as Roth contributions. This means these contributions will be made with after-tax dollars and will not be tax-deductible, but qualified withdrawals in retirement generally will be tax-free. 

Significantly, any Roth salary deferral contributions made by a high earner (e.g., a regular deferral contribution or a catch-up contribution) count towards satisfying the Roth catch-up requirement. This means that if a high earner is already making regular Roth deferrals, they would not be required to make Roth catch-up contributions after the normal salary deferral limit (i.e., $23,500 for 2025) is reached as long as the Roth contributions exceed the catch-up limit (i.e., $7,500 for 2025). The plan sponsor may default those contributions that are over the normal salary deferral limit to Roth treatment, but the plan must allow the high earner to choose to make catch-up contributions on a pre-tax basis (assuming they have already made the required amount of Roth contributions). Essentially, this means a plan sponsor can only mandate Roth treatment for contributions up to the dollar amount of that year’s catch-up limit (i.e., $7,500 for 2025). 

New 2026 Roth rules for partners, other self-employed individuals, and owners 
 

The relevant guidance clarifies that a participant who does not have Social Security wages, such as a partner with self-employment income, will not be subject to the Roth catch-up requirement. This group would also include sole proprietors and members of an LLC taxed as a partnership. 

However, the Roth catch-up requirement will apply to owners of a C-Corp or S-Corp who have Social Security wages equal to at least $150,000 (indexed) reported on Form W-2, Box 3. 

Other pertinent Roth 2026 rule changes to consider 

Wage limit is not pro-rated: The relevant guidance states the Social Security wage amount (i.e., $150,000, indexed) is not pro-rated for an employee’s partial year of employment. For example, an employee who is hired on September 1, 2025, at a $200,000 salary will not be subject to the Roth catch-up requirement in the 2026 plan year because the employee’s Social Security wages would only be approximately $66,600 for the 2025 calendar year. 

Employer definition: The relevant employer is the common law employer of the plan participant. The final regulations allow a plan to aggregate the Social Security wages a participant receives from all employers in a controlled group and/or where a common paymaster is used. If a plan sponsor wants to take advantage of this permissible aggregation, however, it must specify in the plan which aggregation method it is using and what groups are being aggregated. 

Deemed elections: A plan may provide that an election by a participant subject to the Roth catch-up contribution requirement to make salary deferral contributions on a pre-tax basis will be treated as a deemed election to make catch-up contributions as designated Roth catch-up contributions. If a plan will apply deemed elections, the plan document must provide for them and must permit participants to change their deemed elections. Alternatively, a plan sponsor could require the affected plan participant to make a separate election for Roth catch-up contributions.  

Super catch-up contributions: Made by participants who attain age 60 to 63 during a calendar year, these contributions are subject to the Roth catch-up contribution requirement. 

Employers will need to track compensation across all relevant categories to ensure compliance and retirement plan administrators will need to update procedures to enforce the Roth catch-up rule for affected participants. 

Pros and cons of the 2026 Roth catch-up requirement 

Pros: 

• Tax-free growth: Roth contributions grow tax-free and qualified withdrawals in retirement are not subject to federal income tax, potentially providing greater after-tax retirement income. 

• No Required Minimum Distributions (RMDs): Roth 401(k) and Roth IRA accounts are not subject to RMDs during the account holder's lifetime, offering more flexibility in retirement planning. 

• Estate planning benefits: Roth accounts can be advantageous for heirs due to tax-free distributions. 

Cons: 

• No immediate tax deduction: Roth contributions are made with after-tax dollars, so high earners lose the immediate tax deduction that pre-tax catch-up contributions previously provided. 

• Higher current tax liability: Switching to Roth catch-up contributions may increase current-year taxable income, possibly moving participants into a higher tax bracket. 

• Complexity for employers: Employers and plan sponsors must implement new administrative procedures to track compensation and enforce Roth-only catch-up contributions for eligible participants. 

Actions for employers and high earners before December 31, 2025 

With the new Roth catch-up requirement taking effect on January 1, 2026, employers and affected high earners should take proactive steps in 2025 to prepare for the transition: 

1. Review plan documents: Employers should ensure that their retirement plan documents support Roth catch-up contributions, updating them if necessary. 

2. Assess payroll and administrative systems: Ensure systems can accurately track compensation and enforce the Roth catch-up requirement for high earners. 

3. Communicate with participants: Provide clear information to employees about the upcoming changes, how compensation is calculated, and the implications for their retirement savings. 

4. Tax planning: The affected plan participants should consult with tax advisors to assess the impact of losing the pre-tax catch-up option and to explore strategies for minimizing overall tax liability. 

5. Maximize pre-tax catch-up contributions in 2025: Eligible individuals may wish to maximize their pre-tax catch-up contributions before the new requirement takes effect. 

6. Evaluate Roth vs. pre-tax savings: Consider the long-term benefits of Roth savings, including tax-free withdrawals and estate planning advantages, versus the short-term impact on taxable income. 

Start planning now for 2026 Roth changes 

The new Roth catch-up contribution requirement for certain plan participants marks a significant shift in retirement plan rules. While the change offers potential long-term tax benefits, it also increases current tax liability and administrative complexity. Employers and affected individuals should use the time before December 31, 2025, to review plan provisions, communicate with participants, and engage in strategic tax planning to ensure a smooth transition and take full advantage of available retirement savings opportunities. 

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