Midweek brings a whole host of updates on the relief front, both at the Federal and State levels. To help sort everything out, here is a consolidated overview. Important links can continue to be found on our COVID19 Resources Page.
Federal
At the Federal level, we have the following:
Families First Coronavirus Response Act (FFCRA)
This bill, from last week, expanded FMLA and Sick leave coverage to workers impacted by the COVID-19 Public Health Emergency. The IRS has released guidance that employers will be able to deduct any payments made under these new rules directly from their Federal Tax deposits and seek expedited refunds as they go, so they don’t have to wait until the end of the quarter to be reimbursed. Last night the DOL released guidance and Q&A webpages on how to implement the rules. DOL has also ruled that these rules go into effect on April 1, 2020. These are key tools for keeping qualified workers paid during the crisis.
Department of Labor COVID-19 and FFCRA
Coronavirus Aid, Relief, and Economic Security Act (CARES)
The Senate has finally reached a deal on the CARES Act, which is the 3rd Coronavirus relief bill and the biggest to date. They are working on the drafting of the legislation, so the final verbiage is not out, however we expect the $2 Trillion package includes a number of key provisions, including:
Unemployment Benefit Increases - unemployed workers will be eligible for an additional $600 per week in unemployment insurance benefits for 4 months, in addition to amounts they are already eligible for under existing state unemployment plans. Unemployment insurance is extended to the self-employed, independent contractors, and gig workers. I heartily applaud this, as we have been advocating for exactly this support since Day 1.
Recovery Rebate Stimulus Checks - $1,200 checks per taxpayer, subject to various rules including income limitations of $75,000 ($150,000 married), plus an additional $500 per child. There will be phaseouts on income above $75,000.
Small Business Interruption Loans / Payroll Protection Program Loans- SBA 7(a) Loan Program Expansion with Forgiveness - Government guarantees will increase to 100%, fees will be waived, and amounts used for payroll over the next few months will be forgiven. These loans will go directly through banks, to allow money to quickly move to employers (and their employees), and will have terms of a max of 10 years and max 4% interest.
There will be loan forgiveness equal to the amount spent during the 8 week period after loan originations for payroll, plus mortgage interest, plus rent, plus utilities.Subtitle C - Business Provisions - Deadlines for tax filings will be delayed. Employer tax deposit due dates will be extended and payments waived. There is a credit for employing staff during a shutdown (50% of wages), and a retroactive adjustment (finally) fixing the Qualified Improvement Property exclusion from the 2017 tax bill (Public Law 115-97), which can be coupled with changes to the NOL carryback rules, allowing NOLS from 2018, 2019, and 2020 to be carried back 5 years and be used to generate losses for refunds. The taxable income limitation for an NOL is now removed, allowing for tax refund based stimulus from the last year.
Individual Tax Provisions - Penalty free retirement withdrawals, delayed estimated tax payment provisions, and changes to charitable deductions will all be included.
There is no text available to the public for this yet, but we are working closely with friends on The Hill to get access to the text as soon as possible and will analyze the final bill when it is released to start strategizing with you.
District of Columbia
At the local level, DC has opened the application process for the DC Small Business Recovery Microgrants - we have worked closely with RAMW to help the Mayor’s Office correct some issues with the original application and have seen immediate improvement. The DC government has also opened up funding through other agencies and mechanisms, including by awarding grant money that had previously been applied for and allowing it to be used to support operations.
DC Small Business Microgrant Applications
Maryland
Maryland introduced a number of emergency relief measures, including Emergency Relief Loans, Emergency Relief Grants, and Department of Labor Grants to help keep workers employed.
Maryland Small Business COVID-19 Emergency Relief Grant
Maryland Small Business COVID-19 Emergency Relief Loan Fund
As always, our teams are here to help you through this crisis and we are actively helping clients with grant applications, loan applications, and cash flow management. Please reach out to your Harmony Group team member for anything you need, or call me on my cell at any time.
Matt Hetrick, CPA
President and Owner of CPA Eats