ISO 9001:2015 CERTIFIED
COVID-19
FINANCIAL SURVIVAL TOOL KIT
The following information is designed to help you navigate these uncharted times. There are brief descriptions on ALL of the government benefits, tax credits, and loans as well as links.
FINANCIAL BENEFITS COVID-19
We encourage you to read any section that pertains to you, as well the associated links. We understand these are tough and challenging times.
Your family, place of work, personal economy and community are being impacted.
We hope the information below, brings you a small bit of peace knowing there is help out there.
We are committed to you, your business and your employees.
If you have any questions on the below information, please contact us.
We are ready to assist you.
Unemployment benefits
LAST UPDATE
04/12/2020
Apply for unemployment if your company has furloughed you, laid you off, or reduced your hours. For sole proprietors, you too should apply. The federal government allowed for self-employed individuals to also be eligible for unemployment.
Changes in the law provide payments to “Covered Individuals” who would not normally be eligible for or who have exhausted regular unemployment compensation and who are unemployed, partially unemployed, or unable to work as a direct result of the COVID-19 public health emergency
Covered Individuals
LAST UPDATE
04/12/2020
Any individual who is not otherwise eligible for regular unemployment compensation or has exhausted regular unemployment compensation and provides self-certification that the individual is otherwise able to and available for work except that the individual is unemployed, partially unemployed, or unable to work because of one of a number of specified COVID-19 related reasons.
Covered Individuals include self-employed individuals and those seeking part-time employment or without sufficient work history. Covered Individuals do not include an individual who has the ability to telework with pay or an individual who is receiving paid sick leave or other paid leave benefits regardless of whether the individual otherwise meets the qualifications to receive pandemic unemployment assistance. Covered Individuals are eligible to receive the amount that would have been payable under the unemployment compensation law of their state of employment.
Increased Unemployment Assistance
LAST UPDATE
04/12/2020
Covered Individuals, as well as all those who have qualified for regular unemployment compensation are entitled to receive an additional $600 payment per week, above what state unemployment compensation law already provides.
The additional $600 weekly payment is available from the date that the applicable state enters into an agreement with the federal government until July 31, 2020 (i.e., four months maximum).
Limitation on Duration of New Assistance
LAST UPDATE
04/12/2020
Up to 39 weeks of unemployment compensation, including any week for which the Covered Individual received regular compensation or extended benefits (with such 39-week cap extended by the number of weeks, if any, that the duration of such extended benefits are extended after enactment of the Relief for Workers Affected by Coronavirus Act).
Extended Benefits Period for Regular Unemployment Assistance
LAST UPDATE
04/12/2020
An additional 13 weeks of pandemic emergency unemployment compensation through December 31, 2020 for any individuals who remain unemployed after they have exhausted their benefits or are not otherwise entitled to benefits
Work Search Requirements
LAST UPDATE
04/12/2020
Requires states to provide flexibility to individuals who are unable, because of COVID-19, to meet applicable requirements that they be actively seeking work in order to qualify for unemployment compensation.
"SHORT-TIME"
COMPENSATION PROGRAM FUNDING:
Provides federal funding to support state programs in which employers reduce employees’ hours instead of laying off workers, and the employees with reduced hours receive a pro-rated unemployment benefit.
The following links also explain these benefits:
1.- HOW TO APPLY FOR UNEMPLOYMENT BENEFITS IN CA.
2.- EMPLOYMENT DEVELOPMENT DEPARTMENT ABOUT COVID-19
If you are the owner of an LLC, C Corp, or S Corp and have experienced reduced business and unable to pay yourself a wage, you too can apply for benefits.
3.- TOTAL AND PARTIAL UNEMPLOYMENT TPU 110.
STIMULUS.
All individuals who are not dependents are eligible to receive a refundable credit of up to $1,200 ($2,400 for married filing joint taxpayers). In addition, taxpayers with dependents that are eligible for the Child Tax Credit qualify for up to a $500 credit per child. The advance payment of the credit will be based first on the 2019 return, then the 2018 tax return if 2019 not filed, then a 2020 1099-SSA if no returns filed. The credit (and advance payment) is reduced by 5% of the AGI that exceeds $75,000 ($150,000 for married filing joint and $112,500 head of household filers).
The advance payment will be reconciled on the 2020 tax return. If the individual is entitled to more money, then the difference is a refundable credit on the 2020 tax return. If the individual received too much of an advanced payment, it is not repaid.
See the chart below for how much you will qualify for. You can use the calculator links below to see how much stimulus you qualify for.
Only individuals with a Social Security Number will qualify. The stimulus will be based on your most recently filed tax return, 2018 or 2019.
If you have not filed a 2018 return, or have any questions on how best to qualify for the stimulus, please contact us via email at info@taxgb.com and write STIMULUS and your name in the subject line.
You can also contact your tax preparer.
Please read the links below for information on how and when the stimulus will be paid:
4.- HOW TO A STIMULUS CHECK FROM THE US GOVERNMENT IN CA.
5.- STIMULUS CHECKS ARE COMING. HOW TO MAKE SURE YOU GET YOURS QUICKLY.
STIMULUS CHECK CALCULATOR.
Families First Coronavirus Response Act – (FFCRA)
The FFCRA provides for expanded benefits under Emergency Paid Sick Leave (EPSL) and expanded family and medical leave.
6.- FAMILIES FIRST CORONAVIRUS RESPONSE ACT.
7.- FAMILIES FIRST CORONAVIRUS RESPONSE ACT NOTICE - FAQ's
Employers may be eligible for reimbursement from the IRS for providing the leave mandated in the FFCRA. See Payroll Tax Credit below.
Employers - please print and post this poster where other labor posters are generally posted.
Employers – we encourage you to work with a licensed and experienced Human Resources professional. Maximizing the benefits offered to your employees can be complicated. Garcia Barrett can team up with your HR professional to ensure you provide maximum benefits to your employees, and receive maximum benefit from the IRS. If you do not already have a licensed professional, we have teamed up with several HR firms that are offering assistance at reduced rates.
Payroll Tax Credit
Employers with less than 500 employees may be eligible for 100% reimbursement for the costs of providing COVID leave for employees. This is part of the Families First Coronavirus Response Act (FFCRA). Employers will be reimbursed for wages paid to workers while they are on leave.
Please contact your payroll provider to let them know you are paying COVID leave, paid sick leave, or child care leave to ensure your payroll is documented and eligible for reimbursement.
The following links explain how the credits work.
We highly suggest you read them.
Payroll Tax Payment Deferral.
The CARES Act allows employers and self-employed individuals to defer payment of the employer share of the Social Security tax they otherwise are responsible for paying to the federal government with respect to their employees. Employers generally are responsible for paying a 6.2-percent Social Security tax on employee wages. The law requires that the deferred employment tax be paid over the following two years, with half of the amount required to be paid by Dec. 31, 2021 and the other half by Dec. 31, 2022. The Social Security Trust Funds will be held harmless under this provision. ONLY the employer’s social security tax portion may be delayed. The employers Medicaid taxes and the employee’s share of Medicaid, Social Security, and federal income tax may NOT be delayed, and must be timely paid.
The tax deferral also applies to Self Employed individuals. They are able to delay the employer portion of Social Security taxes.
Caution should be taken when using the deferral, which amounts to an interest free loan. The taxes WILL be eventually due. IRS has not issued guidance on the consequences of not paying the deferral.
PLEASE NOTE – employers who received SBA Loans that are later forgiven are NOT available for the Payroll Tax Payment Deferral.
Employee Retention Credit
The CARES Act allows employers ta federal tax credit against the Social Security portion of payroll tax that the employer pays. The credit applies tow ages paid between March 13 2020 and Dec 31 2020. The credit is available to employers whose:
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Operations were fully or partially suspended due to a COVID-19-related shut-down order OR
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Gross receipts declined by more than 50% compared to the same quarter in the prior year.
The credit is 50% of the first $10,000 in qualified wages paid to each employee, for a max credit of $5,000 per employee.
To receive the benefits of the credit, contact your payroll processor and inform them you wish to discuss your eligibility. We believe IRS will be updating form 5884-A to implement the credit.
Businesses that use the SBA loan assistance under “7a” will be ineligible for the credit.
https://www.fisherphillips.com/resources-alerts-cares-act-stimulus-will-permit-business-loans
Payroll Protection Program (PPP)
Companies with less than 500 employees may be eligible for loans that can be used to meet operational needs, including payroll, rent, employee benefits, commissions, interest payment on mortgages, utilities, and interest on debt incurred before 02/15/2020. The max loan is the lesser of 2.5 times the monthly payroll or $10 million. No collateral is required. While interest will accrue from the day the loan is made, not interest or principal payments are required for a 6-12 month period of time. The loan may be paid off at any time without prepayment penalties.
The PPP loan has a forgiveness provision allowing the borrower to apply for loan forgiveness in an amount equal to the payroll costs, rent, utilities, and interest paid on mortgages during the 8 weeks after the loan is made. The amount of forgiveness will not be taxable to the borrower, but the taxpayer may not use both the loan and the employee retention tax credit as described above.
SBA PPP Application Page
https://www.sba.gov/funding-programs/loans/paycheck-protection-program-ppp
Sample SBA PPP Application
We are here to help you navigate the PPP requirements. Please contact us with any question about PPP.
We highly suggest you read the following links on PPP.
https://www.wardandsmith.com/articles/covid-19-relief-package-to-include-small-business-loans
https://www.fisherphillips.com/resources-alerts-cares-act-stimulus-will-permit-business-loans
SBA Loans – Economic Injury Disaster Loan (EIDL)
SBA is expanding its emergency disaster loans. The loans are capped at 3.75% and $2 million and are generally for paying fixed debts, payroll, accounts payable and other costs, but are not intended to replace lost sales or profits and cannot be used for certain purposes, including to refinance debt, make payments on loans owed by another federal agency, to pay tax penalty obligations, repair physical damages, or to pay dividends to stockholders. These Disaster Loans also offer long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
The new law waives the requirement for personal guarantees on loans under $200K, it also waives the requirement that the borrower not be able to obtain credit elsewhere, and provide emergency grants of up to $10K within 3 days of the borrower filing an application, though the amount of the grant would reduce any loan forgiveness under the PPP. The law also streamlines the loan application process.
Please contact us if you need help determining if you need a loan, or need help applying for the loan.
https://www.pillsburylaw.com/en/news-and-insights/sba-loan-cares-act-covid-19.html
https://www.cohnreznick.com/insights/understanding-the-sba-disaster-relief-loan-program-for-covid-19
https://www.uschamber.com/co/run/business-financing/sba-disaster-assistance-loans-guide
https://www.sba.gov/funding-programs/disaster-assistance
https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources
IRS Collections
The IRS has announced an unprecedented delay in collection activities. If you have a payment plan, are asking for a payment plan, or have any sort of collections issue with the IRS, please read below.
California Department of Tax and Fee Administration – CDTFA
For businesses that collect sales tax, the CDTFA has indicated how a business can request a 60 day extension to file a return and/or make a prepayment.
Tax Filing Deadlines Postponed
Both the IRS and California have delayed the 2019 tax filing for individuals and businesses.
All personal returns are now due June 15. There is no penalty or interest if the tax owed is paid on this date. No action on your part is needed to apply the extra time, the extensions are automatic. If you file your return before June 15th, be sure to write COVID19 at the top, or follow the instructions of your software. If you need more time to file your return, you must request an extension via traditional methods.
https://www.irs.gov/newsroom/irs-operations-during-covid-19-mission-critical-functions-continue
CARES Act – Other Benefits
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Exclusion for certain employer payments of student loans: The provision enables employers to provide a student loan repayment benefit to employees on a tax-free basis. Under the provision, an employer may contribute up to $5,250 annually toward an employee’s student loans, and such payment would be excluded from the employee’s income. The $5,250 cap applies to both the new student loan repayment benefit as well as other educational assistance (such as tuition, fees, books) provided by the employer under current law. The provision applies to any student loan payments made by an employer on behalf of an employee after the date of enactment and before Jan. 1, 2021.
Suggested (mandatory) Reading
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COVID Business & Personal Survival Tips
https://www.inc.com/business-continuity-cash-flow-coronavirus-crisis.html
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Rent & Mortgage Deferral Tips –
If you cannot make your rent or mortgage payment, contact your landlord/bank IMMEDIATELY. Be proactive. Explain your situation. Understand that you are not the only person calling and asking for relief. Put a smile on your face before calling, even if it’s a fake smile. Smiles can be “seen” through the phone.
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US Chamber of Commerce COVID business survival guide
https://www.uschamber.com/co/small-business-coronavirus