Today is March 31, or is it March 68? I’ve lost count. I think it’s Tuesday, but not 100% sure about that one either these days.
Since I think we’re all starting to lose track I time, I do want to remind you we’re just one day away, April 1, from the Families First Coronavirus Act (FFCRA), becoming effective. The DOL updated their Q&A, and I think it’s worth taking a look.
The DOL also created a poster for the paid sick leave and expanded family and medical leave under FFCRA below. Since many of you don’t have a workspace to post this where everyone can see it, I would recommend sending it out to your employees to meet the notification requirement.
The March 27 Legislation brought us the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). This legislation is the 3rd piece of legislation aimed at helping with the COVID-19 crisis. As a reminder, here is a basic breakdown of the phases to date:
- Phase 1 was the $8.3 billion spending bill
- Phase 2 was the Families First Coronavirus Response Act
- Phase 3 was the CARES Act
The CARES Act
The CARES Act brought forth several important parts of the legislation – as always, I do not pretend to be an expert, and although I’ve provided below some of the highlights below that many of you have asked about, or that we’ve discussed, it is not all-inclusive and not legal advice, and is my interpretation. I suggest that if you’re interested in more information, please discuss the details and applicability for your organization with your legal counsel, banker or tax/financial advisor:
- Individual Rebates – up to $1,200 for single and $2,400 for married filing jointly, plus $500 for each qualifying child. All subject to limits. Please refer to last weeks email for more details.
- Tax-favored withdrawals from Retirement Plans – they have removed some penalties and restrictions. Please contact your retirement vendor for specifics.
- Delay of payroll tax payment – for and not-for profit employers can defer the employer portion of payroll taxes to December 31, 2020. At that time 50% will be due with the remaining 50% due on December 31, 2022. This is not available if you receive a loan forgiveness under the paycheck protection program however.
- Employee Retention Tax Credit – Some employers are eligible for a tax credit against their employment tax equal to 50% of wages up to $10,000 paid to each employee. For employers with more than 100 full-time employees, qualified wages are wages paid to employees when they are not working due to the COVID-19-related circumstances. For businesses with 100 or fewer employees, all employee wages qualify for the credit, whether the employer is open for business or subject to a shut-down order. The credit is provided for the first $10,000 of compensation, including health benefits, paid to an eligible employee. The credit is provided for wages paid or incurred from March 13, 2020, through December 31, 2020.
- Paycheck Protection Program (PPP) – Small Business Loans – This one is complicated but might be worth looking into. These loans can be used for payroll, sick leave, medical leave, insurance premiums, and certain expenses such as mortgage interest, rent, utilities, etc. A PPP borrower may be eligible to apply for loan forgiveness equal to an amount spent during an 8-week period after the loan origination date for payroll costs for those making under $100,000, interest lease payments and utility payments. The forgiveness portion gets more complicated as it’s based on several variables. Any portion of the loan that is forgiven will not be considered taxable income to the business, however.
Each day I learn something I didn’t know the day before. I will continue to commit each day to do my best to synthesize the mountains of information into what I hope is most helpful in a way that is palatable to read. If you need anything, please reach out.
We’re in this together, one step at a time. Please reach out with questions.
Christine Frazer, SPHR, SHRM-SCP