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CARES Act
- Paycheck Protection Program (PPP) and Loan Forgiveness: The U.S. Small Business Administration began accepting loan forgiveness applications August 10, 2020 for businesses that received PPP loans. Click here for full details.
- President Trump has signed legislation to infuse the U.S. economy with roughly $2 trillion in financial relief during the coronavirus (COVID-19) pandemic. This is welcome news for people and businesses that have suffered losses in recent weeks. Here are highlights of financial relief provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Click here for full details.
- Paycheck Protection Loans: The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by the House on Friday, March 27, 2020. There are several unanswered questions and we wanted to share what we currently know about the Paycheck Protection Program. Click here for full details.
- Additional information to calculate payroll costs in the Payroll Projection Loan:From the actual bill here is what is included in the definition of “payroll costs” (Per Section 1102 Paycheck Protection Program)
- Salary, wage, commission, or similar compensation
- Payment of cash tip or equivalent
- Payment for vacation, parental, family, medical or sick leave
- Allowance for dismissal or separation
- Payment required for the provisions of group health care benefits, including insurance premiums
- Payment of any retirement benefit
- Payment of State or local tax assessed on the compensation of employees
- Sum of payments of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment, or similar compensation and that is in an amount that is not more than $100,000 in 1 year, as prorated for the covered period
From the actual bill here is what is NOT included in the definition of “payroll costs” (Per Section 1102 Paycheck Protection Program)
- The compensation of any individual employee in excess of an annual salary of $100,000, as prorated for the covered period
- Taxes imposed or withheld under chapters 21, 22 or 24 of the Internal Revenue Code of 1986 during the covered period
- Any compensation of an employee whose principal place of residence is outside of the United States
- Qualified sick leave wages for which a credit is allowed under section 7001 of the Families First Coronavirus Response Act
- Qualified family leave wages for which a credit is allowed under section 7001 of the Families First Coronavirus Response Act
In addition, independent contractors, sole proprietors and self-employed individuals DO qualify for the PPL. Until the banks tell them exactly what they need we don’t know exactly. But the law does state they will need info such as:
- Payroll tax filings
- 1099s received
- Income and expense recap of some sort
- As of 4/5/2020 the U.S. Treasury modified the loan application slightly, please review the links provided and contact your bank to see if they need the modified application. https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses.Take a moment and review the information released:
- Coronavirus Emergency Loans Small Business Guide and Checklist. Click here for PDF.
- NEW 6/16/2020: The Small Business Administration (SBA) released on June 16, 2020 a revised loan forgiveness application for the Paycheck Protection Program as well as a new EZ forgiveness application form. The updates incorporated the changes that were passed with the Paycheck Protection Program Flexibility Act of 2020 that was signed into law on June 5th. Click here for more details and here for the application.
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IRS Updates on Coronavirus
- Notice 2020-18 provides that those with a filing deadline of April 15 (for a federal income tax return) have an automatic extension to July 15. The postponement of payments is available for federal income taxes (including payments of tax on self-employment income) due on April 15 for the 2019 tax year and to estimated income tax payments due on April 15 for the 2020 tax year. There is no limitation on the amount of the payment that may be postponed (which is an update from the superseded Notice 2020-17). The postponement means that the period from April 15, 2020 through July 15, 2020 will be disregarded by the IRS for purposes of calculating any interest, penalties or additions to tax for failure to file a tax return or pay federal income taxes postponed by the notice.
- Notice 2020-18 does not address the 2020 2nd quarter estimated tax payments that are due on June 15th. They are still due on June 15thuntil further notice.
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Families First Coronavirus Response Act
- In summary this Act provides refundable tax credits for employers who provide paid sick leave or family or medical leave for their employees who miss work for various coronavirus-related reasons.
- Easy to review highlights of the paid sick leave and paid expanded family and medical leave can be found on the DOL website for employees at https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave and for employers athttps://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave
- Emergency Paid Sick Leave Act: Applies to employers with 500 or fewer. Businesses with less than 50 employees may claim exemption if requirements would jeopardize the business.
- Emergency Paid Sick Leave is available for numerous reasons including:
- Federal, State, or local quarantine or isolation order;
- Self-quarantine at the advice of a health care provider;
- Obtaining a medical diagnosis if experiencing symptoms;
- Caring for a sick individual subject to Federal, State, or local quarantine or is self-quarantined at the advice of a health care provider;
- Caring for a child whose school or childcare facility has been closed or whose childcare provider is unavailable; and
- Experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
- Emergency Paid Sick Leave pay is up to 80 hours over a 2 week period and is limited to 2/3rds of wages up to $200/day if caring for a family member (options 4 & 5 above), or 100% of wages up to $511/day if employee is seeking COVId-19 diagnosis or quarantined.
- Expanded FMLA leave is available to those employees employed for at least 30 days that cannot work or telework because they are caring for a minor child whose school or daycare is closed. This FMLA can be taken for up to 12-weeks with the first 10 days being unpaid. Employees are paid at 2/3rds of wages up to $200/day with $10,000 in aggregate.
- Employees will need to provide the following documentation to the employer when requesting leave:
- Employee’s Name
- Qualifying Reason for requesting leave
- A statement that the employee is unable to work (including telework) due to the qualifying reason
- Documentation supporting the need for leave- ie: copy of isolation order, written documentation from a health care provider, announcement of school closure.
- The date or dates for which leave is requested
- Tax credits: The tax credit can be used against the employer’s portion of Social Security (6.2%) and Medicare (1.45%) taxes.
- This flow chart is helpful when trying to navigate the different paid leaves that are available. Families First Act – HUB Flowchart.
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State of Nebraska Coronavirus Updates
- Tax filing deadline will automatically be extended to July 15, 2020 for state income tax payments and estimated payments that were originally due on April 15, 2020.
- Expanded unemployment benefits as a result of COVID-19 at https://dol.nebraska.gov/PressRelease/Details/141
- COVID-19 Executive Order: Effective 3/22/2020 until at least July 31. Governor Rickets suspended the 1 week waiting period and employees don’t have to be actively looking for work. Self-employed and certain “covered individuals” related to COVID-19 also now qualify under the Disaster Unemployment Assistance funded by the federal government.
- Under the CARES Act, in addition to regular unemployment benefits to individuals, calculated pursuant to State law, individuals will also receive an additional amount of $600 (the “Federal Pandemic Unemployment Compensation” amount). This additional benefit is available until July 31, 2020.
- Short-term compensation is a program available through the Nebraska Department of Labor. This program helps employers prevent layoffs. Short-term compensation allows employers to reduce a group of employees hours 10 – 60%. Employees then receive prorated unemployment benefits. Employers are required to submit a plan as well as complete a weekly certification process.
- NEW 6/13/2020: Governor Ricketts announced additional details for the Economic Development Grant Programs designed to provide relief to individuals and businesses impacted by COVID-19. The grant programs, which are available on a first-come, first-served basis, click here for more details. You can also visit the Get Nebraska Growing website at https://getnebraskagrowing.nebraska.gov.
- NEW 6/29/2020: Community CARES Stabilization grant – Additional grant opportunities are available for charitable organizations and licensed providers including assisted living and hospice providers. Click here for more details.
- NEW 7/13/2020: the Nebraska Department of Economic Development is accepting new applicants under the Small Business Stabilization (SBS) grant program. Businesses can now apply if they have 1 to 75 employees, deadline is July 17th, Friday. Click here for more details.
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State of Iowa Coronavirus Updates
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Navigating Cash Flow
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Financial Impacts on the Senior Care Community
- We want to commend you for the incredible work your organization is doing to protect and save lives within the senior community. We are in unchartered territory right now with COVID-19 and need to plan for the short- and long-term impact on your organization and the community. Click here for more information »
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