January Updates for You!

Greetings!

Welcome to 2021! Going into a new year can be a handful, and we want to make things easier for you. Here are a few updates we think you and your business will find useful. We hope the year has been kind to you thus far, and welcome you to reach out should you need anything from our team.

- FFCRA Sick Pay Is Optional -

January 1 to March 31, 2021

As of January 1st, employers are no longer required to provide Families First Coronavirus Response Act (FFCRA) paid leave through March 31, 2021. The FFCRA tax credit, which reimburses employers for the cost of providing FFCRA leave, will continue to exist through the end of March. The relief package does not change the total amount of leave available, the qualifying reasons for which employees may take leave, the caps on the amount of pay employees are entitled to receive, or the FFCRA's documentation requirements.

Read the DOL Press Release here!

2nd Round of PPP Loans: What You Need To Know

The Additional Coronavirus Response and Relief (ACRR) provisions extended the covered period for all new PPP loans through March 31, 2021. This extension comes with changes to eligibility, loan size limit, and more. Here is a review:

ELIGIBILITY

First-time borrowers must have 500 or less employees (with some exceptions), certify that “current economic uncertainty makes this loan request necessary”, and have been in operation since February 15, 2020.

Second-time borrowers must have 300 or less employees, show a 25 percent drop in gross receipts between comparable quarters in 2019 and 2020, and prove they used all of the money from the first loan in allowable ways.

APPLYING

Most borrowers can apply starting Jan. 19 at what are expected to be thousands of participating lenders. A small group of community lenders took early applications. Banks and credit unions with $1 billion or less in assets can start taking applications on Jan. 15. The deadline to apply is March 31.

LOAN AMOUNT

First-time borrowers are eligible for 2.5 times their average monthly payroll cost, up to $10 million. Sole proprietors can borrow 2.5 times the monthly profit they reported on their 2019 Schedule C tax form.

Second-time borrowers are capped at $2 million.

REPAYING LOAN

Borrowers can have their loan forgiven if they follow the program’s rules. At least 60% of the loan must be used to pay workers, and the rest must be spent on qualifying expenses. Loans that aren’t forgiven carry a 1% interest rate and a repayment term that will generally run for five years.

TAX PROVISIONS:

Consolidated Appropriations Act

vs.

The CARES Act

Signed into law just before the new year, The Consolidated Appropriations Act ("The Act") enhanced and expanded certain provisions of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). The Act makes several changes to the employee retention tax credit. The changes are effective for calendar quarters beginning after December 31, 2020 except as otherwise indicated below.

Full Chart Breakdown HERE!

Reporting Employee Refusals to Return to Work

Earlier in the pandemic employers found it difficult to motivate workers to return to work because some low-wage workers are receiving more money from unemployment compensation than their weekly wages. In an effort to avoid this again with the reinstatement of supplemental pay, the Department of Labor issued the Unemployment Insurance Program Letter which clarifies the specific actions state unemployment agencies need to take by January 26, 2021. State Unemployment Agencies must take the following actions:

✅ Establish a method to address circumstances in which an individual refused to return to work or accept an offer of suitable work without good cause.

✅ Provide a reporting method for employers to notify the state agency when an individual refuses an offer or employment.

✅ Provide a plain-language notice to claimants who refuse to return to work or accept an offer of suitable work without good cause.

Employers are encouraged to notify furloughed employees of this development to proactively discourage refusal to return to work.

Payarc Partner Feature

📞(916) 757-6777

📩payroll@alimac.com

📍1430 Blue Oaks Blvd Suite 270

Roseville, CA 95747

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