EMPLOYEE RETENTION CREDIT
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- The Employee Retention Credit is a fully refundable tax credit for employers equal to 50 percent of qualified wages (including allocable qualified health plan expenses) that Eligible Employers pay their employees.
- The credit equals 50 percent of the qualified wages (including qualified health plan expenses) that an Eligible Employer pays in a calendar quarter. The maximum amount of qualified wages taken into account with respect to each employee for all calendar quarters is $10,000, so that the maximum credit for qualified wages paid to any employee is $5,000.
- You cannot use the credit if you get the Payroll Protection Payment loan
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ECONOMIC INJURY DISASTER LOAN
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- Up to $2Million
- Must have less that 500 employees
- Available to: private non profit organizations, independent contractors, sole proprietorships
- Issued by SBA and based on credit score and financial need
- Collateral required for loans more than $25,000
- 3.75% interest for businesses; 2.75% interest for non profits
- SBA may provide up to $10,000 in emergency grants to EIDL applicants that need it. Applicants do not need to repay the grants even if the loan application is denied.
- No payments are due in 2020
- Can be used for operating expenses
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PAYROLL PROTECTION PROGRAM
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- The PPP is an emergency loan program intended to allow borrowers to continue to make payroll and pay other “allowable” costs over an eight (8) week period. So long as loans are utilized for an “allowable use” during this time period, including paying employee salaries, providing group health benefits, and paying rent and utilities, the loans are forgivable, subject to certain reductions discussed in item 8 below. Where applicable, the PPP provides a disincentive to laying off staff over the coming weeks, as the government largely would be subsidizing the cost of employing such personnel.
- Do not qualify for the Employee Retention Credit if applying for PPP. Must keep employees paid at full pay for forgiveness
- Loan amount is 2.5x average monthly payroll for previous year
- Loans are administered by banks. Contact the bank you currently work with to see about applying
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PAYROLL TAX DELAY PROGRAM
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- For the period of 4/1/20-12/31/20, employers can defer payment of the employer share of social security taxes
- 50% of taxes would be due by 12/31/21 and the balance by 12/31/22
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Section 139 provides that “qualified disaster relief payments” are payments to an employee for personal, family, living, or funeral expenses resulting from a “qualified disaster”, which could include expenses such as child care, medical expenses, or increased home expenses. Because the COVID-19 pandemic was designated as a national emergency, qualified payments for disaster-related expenses made as a result of the COVID-19 pandemic would not be included in the recipient’s income and are deductible to the employer.
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As of today, the only filing deadline changes are for personal.
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FAMILY FIRST CORONAVIRUS RESPONSE ACT
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- The FFCRA only applies to employers with less than 500 employee and goes into effect on 4/1/20
- Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or
- Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State, or local government order or advice of a health care provider), or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor; and
- Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.
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MESSAGE FROM RUTH AND GRACE
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We know that this time for employers and small businesses is extremely stressful. We are following all of the laws and how they will impact your business and will be sending out updates via constant contact as information is received.
- There are a lot of options available right now. If you have not done so, please schedule a free 45 minute business appointment with us to discuss what is available for your business. https://Abacusconferencecall.as.me/
- In order to accommodate everyone's requests, we are limiting answering phone calls, responding to emails and text messages. As a note, our text number is not for phone calls.
- We will not be filing business returns, excluding 1120 and non profits, until May
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Be Safe Be Diligent Be Prepared
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2941 West State Road 434 Suite 400
Longwood, FL 32779
Phone: (321) 972-5010
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