In This Edition:
- Congressional Update,
- Coronavirus-Related Paid Leave for Workers,
- Tax Credits for Employers,
- SBA Federal Disaster Loans.
Congressional Update:
In the early hours of Wednesday, March 25th, Senate leaders and White House officials struck a deal on aLstimulus package to boost the economy. The Senate is supposed to pass the legislation at some point on Wednesday the 25th. Then the bill will move to the House. The language of the bill is still being finalized, but some of the details that have been released are as follows:
- $500 billion to back loans and assistance for industries (such as airlines and health) as well as state and local governments
- $367 billion for loans to small businesses
- Direct payments to individuals in the lower to middle income brackets ($1,200 per adult and $500 per child)
- Massive boosts to unemployment insurance
Coronavirus-Related Paid Leave for Workers:
On March 18, 2020 President Trump signed into law the Families First Coronavirus Response Act (“FFCRA” or “the Act”) which requires certain employers to provide employees with expanded family and medical leave for specified reasons related to COVID-19. If you are an employer with under 500 employees, we encourage you to familiarize yourself with the requirements to provide paid leave for your employees. The Department of Labor released Notice 2020-1 on March 24, 2020, which provides for a temporary period of non-enforcement from March 18 through April 17, 2020. The Act is effective until December 31, 2020.
The FFCRA generally requires you to provide your employees with 2 weeks of paid leave if they are out of work due to quarantine, medical diagnosis, caring for family members subject to quarantine or illness, or caring for a child whose school or daycare has been closed. Depending on the reason for absence, you may have to pay anywhere from 67% – 100% of the employee’s wages with certain caps. You may also have to provide employees with an additional 10 weeks of paid childcare leave (subject to caps).
Available Tax Credits:
Employers may receive a tax credit worth 100% of the wages paid for family and medical leave, limited to the maximum payments required under the Act. The credit may be taken against employment taxes that the employer remits. If the amount of the credit exceeds the employer’s payroll taxes for a quarter, the amount of the limitation is refundable to the employer. Self-employed individuals may also be eligible for credits.
SBA Federal Disaster Loans:
The Small Business Administration is offering federal disaster loans for working capital to small businesses suffering economic injury as a result of COVID-19. These are available to small businesses that are unable to obtain credit from alternate sources. Qualifying businesses may be able to obtain loans up to $2 million at a rate of 3.75%, which can be used to pay fixed debts, payroll, accounts payable, and other bills that cannot be paid because of the disaster’s impact. Click here to apply.
Every business has unique needs and circumstances. Call your ATKG adviser to discuss how these laws affect you and your employees. To view other trending news released by ATKG last week, please click on the links below.
ATKG Trending News
- IRS Extends Filing Deadline and Unlimited Tax Deferral
- Mnuchin Announces Extension for April 15th Tax Deadline
- Treasury Department Expands Tax Payment Extension to Include 2020 First Quarter Payments
- Department of the Treasury Announces 90 Day Tax Payment Extension
- COVID-19 Update From ATKG
| Annette Goodson is a Tax Director for ATKG. She serves as the lead of the firm’s State and Local Tax practice. She brings more than 25 years of public accounting experience to the team in the areas of federal tax, state tax and recruiting. Annette is a Certified Public Accountant and received her bachelor’s degree in accounting from The University of Texas at San Antonio For further information on this topic or other tax questions please contact Annette Goodson or a member of our Tax practice at 210.733.6611 or agoodson@atkgcpa.com. |
