Over the past two weeks, you’ve likely been inundated with information and guidance regarding COVID-19, including numerous bulletins from MITA. Our staff continues to monitor the situation on your behalf, and we will be providing you with frequent important updates in the weeks to come as information becomes available. The information below summarizes the CARES Act and provides links to additional information and webinars.
What is the CARES Act?
Congress has passed significant measures in response to the COVID-19 crisis that are intended to assist those who have been impacted. One measure taken to assist affected businesses was the passage of the Coronavirus Aid, Relief and Economic Security (CARES) Act.
Of particular interest to MITA members is a measure to help small businesses that will be impacted by the new leave requirements passed in the Families First Coronavirus Relief Act (FFCRA).
Major components of the CARES Act include:
Relief for Small Businesses
Loans
- Provides $350 billion through the Paycheck Protection Program (PPP) to provide Small Business Administration loan assistance to businesses employing fewer than 500 employees.
- Up to $10 million in loans per company may be provided to maintain cash flows and help offset costs of enhanced emergency paid sick leave and emergency paid family medical leave, as required by the FFCRA.
- Loans may be used to support payroll, mortgages, rent, utilities or other actions to prevent layoffs or costs associated with providing emergency paid sick leave and emergency paid family medical leave.
- Loans will be forgiven if businesses maintain payrolls.
Click here for the PPP Borrower Information Fact Sheet.
Click here for the PPP Application Form.
The loan applications require a calculation of average payroll according to the PPP definition, and the banks will require you to support that computation with supporting documents, such as federal and state quarterly payroll tax returns, health insurance plan premium invoices, retirement plan documentation, etc. You will also need to provide information on how your business has been impacted by the COVID-19 pandemic.
It is important to take quick action on the PPP. While the program is open until June 30, 2020, there is reported to be a funding cap and it is possible it could be closed earlier. Also, your bank may possibly have an online application process, and communication with your bank is encouraged.
Here are additional helpful resources regarding the PPP:
Click here for an overview of the PPP.
Click here for the U.S. Department of Treasury Small Business Website.
Click here for SBA Guide and overview of the PPP.
Grants
- Provides $10 billion in emergency grants for small businesses to cover immediate operating costs.
Other Features
- Provides $17 billion to cover up to six months of payments for businesses already using Small Business Administration loans.
- Provides advanced refunding of payroll tax credits passed in the Families First Coronavirus Response Act (FFCRA) for up to 50 percent of wages paid by employers to employees who faced fully or partially suspended operations due to COVID-19 or if gross receipts declined more than 50 percent in comparison to prior years.
- Postpones employer payroll taxes with 50% due Dec. 31, 2021; the remaining 50% due Dec. 31, 2022.
Employee Retention Tax Credit
- Establishes a fully refundable tax credit for any business fully or partially closed as a result of COVID-19.
- The tax credit is designed to help businesses restore or maintain existing payroll.
- Eligible for up to $10,000 in qualified wages per employee.
Leave Rights Under the Families First Coronavirus Response Act (FFCRA)
The Families First Coronavirus Response Act (FFCRA) was signed into law on March 18, 2020. The FFCRA provides a host of benefits, one of the most prominent being paid leave for employees so they can deal with the effects of the coronavirus. These benefits are available starting today, April 1, 2020.
Click here for the FFCRA Guidance Document.
Click here to download the FFCRA Leave Request Form.
Click here for Rehmann’s COVID-19 Website.
Other Helpful Resources
Rehmann, a MITA member accounting firm, has a webpage that is dedicated to COVID-19. The topics include General Business, HR & Workforce Solutions, Legislation/Regulation, Tax, Technology & Cybersecurity and Wealth Advisory.
Rehmann has also produced a webinar related to the Families First Coronavirus Response Act and the CARES Act. Their simple infographic summarizes much of the information that needs to be digested and then provides a link for further details. Additional resources cover the impact of the legislation on Employer-Sponsored Health Plans, FMLA and Sick Leave; disaster funding; and the extension of the deadline to file and pay federal taxes.
Click here for Rehmann’s Webinar.
Click here for legislation on health plans, sick leave and FMLA.
Click here for a legislative infographic.
