Employer Resources

Coronavirus Support and Information

The 880 page bill, H.R. 748, also known as the CARES Act was officially passed on March 29th. Lots of information has been released regarding the CARES Act and other relief options and programs available to employers during this time of need. On top of this information, changes seem to happen to these options and resources day by day. As this is new to everyone, we are all trying to keep informed with accurate information. We have taken the time to compile resources and information to provide you a summary of the options on the table for you. Please see more consolidated information below as well as current updates on current changes to these programs.

                                                     *Last Updated 4/16/2020*
 
Unfortunately, it was announced 4/16/2020 that the SBA has cut off funding to both EIDL and PPP Loan programs. Applications that were already submitted will continue to be processed on a first come first serve basis. Congress is working on incorporating more funding into the program(s) and we want to stay optimistic. The SBA indicated that they have processed 14 years worth of volume of applications in 14 days. Everyone is doing the best to work through this amplitude of processing.

Weather you have or have not submitted applications to any relief options available, there are things you can be doing right now to help. Please see the individual sections below to highlight what you can do to prepare yourself if these options re-open AND what options are still available for you to take advantage of.

Before we get started - Have you considered filing unemployment for yourself? If your business is no longer in operation or you are working dramatically reduced hours, even if your self employed, you may be eligible. You might even be eligible for state and federal benefits. Please see the unemployment section below for more information and resources.

  Employer Options and Assistance

 SBA Economic Injury Disaster Loan

1   The Small Business Administration’s (SBA) Economic Injury Disaster Loans (EIDLs) are intended to be first line of support.  These loans aren’t new. They’ve always been available in the event of disaster and this specific program is geared towards being a friendlier loan program for everyone in need.

As of 4/16/2020 the funding for this program has been exhausted. While congress is working on introducing additional funding, no new applications are being accepted at this time. Please see the link for current information on loan application availability and updates from the SBA. Applications that have already been submitted will continue to be processed on a first come first serve basis. As much as we can't currently apply for this loan option, there are still things you can do weather you have or have not submitted an application.

If Your Application Has NOT Been Submitted: If you application has NOT been submitted there is still hope. We urge you to assist us preparing records for if and when they re-open the applications. Congress is working on additional funding and based on the need of these programs we hope this happens. If we do your accounting then our office likely has the information to file the initial application once the flood gates open back up. However, there is a second tier to these application processes that you can prepare for. Please read the section directly below for the businesses that have submitted applications and what steps they are taking to be ready for this second tier. We propose that you take the same measures to be ready for this loan and other lending options when the time comes. 

If Your Application Has Been Submitted:
If you application has been submitted, you may or may not have received a response back from the SBA. Responses on the initial applications are taking anywhere from 2-4 weeks. Once you get a response you will be in touch with a loan officer to provide additional documentation. We have been told that a lot of loan applicants will get a maximum of $15,000 in addition to any emergency grant funding (see details below). This means most applicants will get funding anywhere from $15,000 up to $25,000. At this time it seems like you will need to express proof to your SBA Loan officer that you need funds in excess of $15,000 to sustain your business. In an SBA webinar on 4/15/2020 it was mentioned that you should have your "case ready" for your loan officer once contacted. Some information they will be looking at is loss of revenue and continued expenses that need covered during this time frame. The initial application does not ask for this information and has not already been provided to the SBA.  We urge you to start compiling detail of the affect of this pandemic on your business with some back-able figures and documentation as to the measures you have had to take, loss of revenue incurred (we can help with obtaining some of these numbers), and detail of necessary expenses that have been and still need to be paid. We should also have tax information ready or financials complete at the very least for 2019 to provide the legitimacy of your claim.

This is still a great loan option if and when they grant the acceptance of new applications. We are recommending almost all businesses affected to apply for this loan. If you haven't already please see the scope of this loan program below and use the knowledge of your business to see if this program could be beneficial to you.

Eligibility and Amounts

  • This program is set forth to provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact.
  • Businesses and nonprofits with less than 500 employees are eligible. The loan program is even available to sole proprietors, independent contractors, and self-employed individuals.
  • Loans are up to 2 Million, term is 30 years, and interest rates are 3.75% for small business and (2.75% for non-profits)
  • Some applicants may be capped at $15,000 in funding (up to $25,000 with the 10K loan advance). In order to receive more than $15,000 in funding you may need to provide additional documentation including but not limited to loss of revenue, payroll expenses, and rent expenses. * See more detail in the "If you application has been submitted section above" *
  • Payments are deferred for up to one year.
  • There are no loan fees, guarantee fees or prepayment fees (Any loan proceeds you don't use you can pay back to the loan).
  • You can apply even if you already have a credit line or another SBA loan.
  • The SBA may provide up to $10,000 in emergency grants to EIDL applicants that need it. Applicants may not need to repay the grants even if the loan application is denied. *See more information on this grant below*
  • For questions, please contact the SBA disaster assistance customer service center at 1-800-659-2955 (TTY: 1-800-877-8339) or email disastercustomerservice@sba.gov.

10K Emergency Grant/Loan Advance

The CARES Act also has a grant program under the SBA’s Disaster Assistance Loan to provide quick relief for applications awaiting processing of above SBA Loan. Loan applicants can get $1,000 for every employee up to $10,000 max to cover immediate payroll, mortgage, rent, and other specified expenses. These payments are determined by the number of employees employed as of 01/31/2020. Applicants may not need to repay the grants even if the loan application is denied. You apply for this loan advance during the application of the EIDL loan itself. 

You apply for these loans (when available) directly through the SBA link below. Until applications are accepted this link is a resource for current updates on the program:
https://covid19relief.sba.gov/#/



Paycheck Protection & Forgivable Loan Program

The CARES Act’s Paycheck Protection Program Loan Guarantee offers another source of help.  Under this program, the SBA backs small-business loans through local lenders. The SBA currently works with 1800 lenders and plan to expand that given the anticipated demand on this paycheck assistance needed. As this protection program is backed by the SBA, this program is very similar to the eligibility requirements and benefits offered that are listed above for the SBA Economic Disaster Loans. You apply for the Paycheck Protection Loan directly through your local lending institution (not the link provided above).


As of 4/16/2020 the funding for this program has been exhausted. While congress is working on introducing additional funding, no new applications are being accepted at this time. Applications that have already been submitted will continue to be processed on a first come first serve basis. As much as we can't currently apply for this loan option, there are still things you can do weather you have or have not submitted an application.

If Your Application Has NOT Been Submitted: If you application has NOT been submitted there is still hope. We urge you to assist us preparing records for if and when they re-open the applications. Congress is working on additional funding and based on the need of these programs we hope this happens. If we do your payroll then our office likely has the information to file the initial application once the flood gates open back up. Please explore the EIDL section above for what you could get ready to prove need of funds for your businesses sustainability. Please also explore the unemployment section below on your options and rights to file for benefits.

If Your Application Has Been Submitted:
If you application has been submitted, you may or may not have received a response back from your lender. Banks are working endlessly to process the amplitude of applications they have been receiving and each process for each individual lender is different. If we do your payroll then our office likely has the information to file the initial application once the flood gates open back up. Please keep your eyes and ears peeled for any information from the lender(s) you have applied with and any information they may need from you. If our office processed your application those requests will come directly to us and we will submit the information requested. Please explore the EIDL section above for what you could get ready to prove need of funds for your businesses sustainability. Please also explore the unemployment section below on your options and rights to file for benefits.

This loan is intended to keep your employees employed, even if you have or have not laid off some employees already. If you haven't already please see the scope of this loan program below and use the knowledge of your business to see if this program could be beneficial to you.

  • Generally, the amount of the loan is capped at 2.5 times the average monthly payroll costs up to 10 million. Payroll costs include salary/wages/tips, sick/family leave/PTO, severance payments, retirement benefits, health coverage, and taxes assessed on employee compensation paid. For any employee who is paid more than $100,000 salary, only the amount up to $100,000 (prorated for the covered period) is calculated into the number.
  • Loan proceeds may be used for: payroll costs, group health care benefits or insurance premiums, interest on mortgage obligations, rent, utilities, and interest on other outstanding debt.
  • The loan term is up to 10 years and a maximum interest rate 4%
  • No personal guarantee or collateral is required for the loan
  • Payments are deferred anywhere from six to 12 months 
  • These loans can be forgivable. Please refer to the section below


Where does the forgivable part come in?

  • The amount of the loan(s) that can be forgivable are the sum of the payroll costs, mortgage interest payments, rent, and utilities incurred or paid by the borrower during the 8-week period beginning on the loan origination date.
  • Any portion of the loan that is forgiven is excluded from taxable income.
  • Be careful here... In order for the amounts to be forgiven, you may need to maintain the same average number of employees for the first eight-week period beginning on the origination date of the loan as you did from February 15, 2019 - June 30, 2019 or from January 1, 2020 until February 15, 2020. The amount of forgiveness is reduced proportionally by any reduction in employees retained compared to historical levels, and the decrease in pay of any employee beyond 25% of their historical compensation.
    • § The CARES Act takes into account that many businesses might already have or are planning to lay off personnel or cut salaries. If those cuts were made between February 15, 2020 and April 26, 2020, those changes could not be counted if the business rehires the number of personnel or returns the adjusted salary, as applicable, by June 30, 2020.

*** Before you apply for anything that you are expecting to be forgiven, please make sure you have done your research to ensure that you take the appropriate steps to meet the guidelines set for you and any potential forgiveness ***

Do you have other loan options?

Yes you do. All banks and credit agency's are still offering their normal loan programs and there are certainly other credit and lending options available for you. You can contact lenders you already have established relationships with or do research on other programs out there. For example, the SBA still offers non-COVID related lending options, just like others banks and lenders do as well.

Other lenders, especially on existing SBA backed loans, are encouraged to provide payment deferrals and extend maturity dates. The SBA will pay lenders the deferred principal and interest for a period. This means that other lenders you may be able to draw from may also be deferring payments on their own and you may be able to take advantage of this as well. If you are struggling to make any loan payments, or have other loan companies in mind, please get in touch with your lender to see what options may be available.

 

Employee Retention Credits

Under the CARES Act, employers may be eligible for a refundable tax credit for the employer’s share of the 6.2% Social Security tax. The potential SSI Tax Credit is for 50% of the first $10,000 in qualified wages (including health plan expenses) paid to each employee beginning on March 13, 2020. To be eligible, an employer must have had operations fully or partially suspended because of a shut-down order from a governmental authority related to COVID-19, or have had gross receipts decline by more than 50% in a calendar quarter when compared to the same quarter in 2019 and potentially remain lower for a period of time. For employers with more than 100 employees, qualified wages are limited to wages paid to employees who were not providing services due to the COVID-19 crisis. However, the SSI Tax Credit is not available if the employer receives a covered loan from the SBA, as discussed above under Forgivable SBA Loan Program.


Payroll Tax Deferral

In addition to potentially receiving the SSI Tax Credit, the CARES Act allows employers to defer the payment of the employer’s share of the 6.2% Social Security tax on wages paid beginning on March 27, 2020 and ending on December 31, 2020. A similar deferral has also been granted for the equivalent portion of self-employment taxes. The deferred amounts subject 50% to be due by December 31, 2021, and the remainder due by December 31, 2022. This deferral of Social Security taxes is not, however, allowed where the employer has had a covered loan forgiven, as discussed above under Forgivable SBA Loan Program.


Unemployment Compensation

Anyone who is laid off, including owners, can walk through the steps to apply for benefits.  Please get in touch with us if you are an owner looking to file as there may be forms that are required to be filled out.

 State Benefits

State unemployment requirements are operating mostly as normal. The states are being more lax on some of the normal requirements for workers impacted by COVID-19 such as requirements for looking for work. While Oregon is not requiring people to “look for work” for temporary lay offs only, weekly claims are still required. 

If you have laid employees off you may want to tread cautiously if you have kept staff on with reduced hours. Some schedule changes and attention to hours may be beneficial to ensure your employees are getting reasonable benefits. This will effect how your employees file and claim benefits and if not treated correctly can make your staff with reduced hours not end up getting, or seriously reduced, state benefits. Please inquire with us if you are looking for more information on staff with reduced hours.

 Learn more and apply for state benefits here: https://www.oregon.gov/employ/unemployment/pages/default.aspx

 Federal Benefits (Pandemic Unemployment Compensation)

Under this bill, several individuals receiving unemployment benefits would temporarily receive an emergency increase in their weekly benefit of $600 under Section 2104. The program provides $250 billion for an unemployment benefits and expands eligibility and offers workers an additional $600 per week for four months. All regular UI and Pandemic Unemployment Compensation (PUC) claimants will receive their usual calculated benefit plus an additional $600 per week in compensation. PUC is a flat amount to those on UI, including those who are receiving a partial unemployment benefit check. It also extends UI benefits through Dec. 31 for eligible workers. Employees that are not eligible for state provided unemployment benefits, have reduced benefits, or have otherwise exhausted such unemployment benefits will be able to receive the same amount of assistance through federal unemployment. If employees remain unemployed after their state employment benefits are exhausted, the federal government will fund up to 13 weeks of unemployment benefits.

This assistance is to help fill the gap between the average wage vs. the average UI benefits people receive. Studies say the average person makes about $1,000 a week but that the average weekly benefit is $364. Putting this into action is intended to essentially replace the paycheck of the average person during this crisis. Given that the average weekly benefit is $364, the average recipient could receive a benefit equal to nearly three times what they would otherwise receive and potentially more than they were earning while employed.

This benefits payout should come from your residing state. All states are still trying to get on board as these requirements are new to them too. At this time, if you are eligible, your state should automatically distribute funds to who qualifies. We have been told that these benefits may start as soon as the week of April 13th. If you have not already filed a claim and think you may be eligible you should file a claim immediately - as a reminder this is a regular unemployment claim with your state. There is no additional claim process for this benefit.

To get further information on these unemployment benefits by state please visit the link directly below and choose your state in question:
https://www.careeronestop.org/LocalHelp/UnemploymentBenefits/find-unemployment-benefits.aspx

To get information on Oregon payouts please visit the unemployment website specific to these COVID-19 bennefit programs here:
https://govstatus.egov.com/ORUnemployment_COVID19



Business Tax Return Changes & Net Operating Losses

The CARES Act also provides assistance to businesses through the modification of rules related to net operating losses, interest expense deductions, alternative minimum tax credits and more... Many of these modifications are designed to provide critical cash flow and liquidity to businesses during this emergency, including through amending prior tax returns to obtain tax refunds. What this means to you is that employers have several tools available to them to help with cash flow, claim tax refunds, or reduce upcoming tax payments.

A large portion of these changes are related to Net Operating Losses and AMT Tax Credits from prior years that were previously disallowed that they be allowing you to use now. If you know that you have had these credits disallowed in prior years then we may need to look at your taxes and see if an amendment may be beneficial for you.

Emergency Sick Leave Act

We’ve previously talked about the Emergency Paid Sick Leave bill that was put into effect earlier this month. This requires all employers to potentially pay employees if they or their family is affected by the coronavirus. There have been big changes to this bill since this was last addressed by our office. Congress has revised this bill to be more full cycle and added relief options to employers affected by this cost.

We want to start by saying this mandatory paid sick leave applies to all employers with less than 500 employees. This order requires all employers to provide and pay employees required paid sick leave or paid family medical leave due to coronavirus-related illnesses. This order is set in place for employers to provide 12 weeks of sick leave to affected employees. The qualifying factors for this mandatory pay are below. If any employers employ someone who has any time off work due to the below reasons, they may qualify to be paid by their employer (you) this emergency paid sick leave.

Below are the qualifying factors for people to get the paid leave indicated in this section:

  • To self-isolate because the employee has been diagnosed with coronavirus;
  • To obtain a diagnosis or care if experiencing symptoms of coronavirus;
  • To comply with an official order or recommendation because of exposure or symptoms, to care for or assist a family member in connection with (1) or (2) above;
  • To care for a child whose school or place of care has been closed or the child care provider is unavailable.

This bill entitles employees to 10 weeks of paid leave. The bill says the first 10 days can be unpaid. Under the legislation, employers initially pay for the sick leave but are fully reimbursed by the federal government within three months through refundable tax credits that count against employers' payroll tax. The bill says employees will be paid based on their normally scheduled hours and can be paid no less than two-thirds of their regular pay rate. This bill will go into effect 15 days after signing (making this mandatory as of April 2nd) and will remain in effect through the end of the calendar year.

According to the bill, companies with fewer than 50 employees could be allowed to opt out of the provisions if they would jeopardize business viability. Please know that issues should only arise if affected employees feel they have not been paid adequately. Please make sure you address all pay related issues very sensitively and check with us if you are unsure how pay and/or questions should be handled.

Employers must post a notice about leave entitlements in a conspicuous location

To reiterate, this could include not only the employee themselves being affected but also caring for a family member who’s sick or having to stay home to care for a child because of the coronavirus shut downs.  Please keep these ‘qualifying factors’ in mind when choosing to keep employees on staff during this time. If they are still officially employed by your company they could be subject to the leave indicated in this bill if they or their families are affected.


Personal Relief and Assistance

There are several aspects of the CARES Act that are directed to individuals, and the assistance comes from a variety of places and methods.

Stimulus Checks/Rebates

The CARES Act provides for recovery rebates of up to $1,200 for individuals with adjusted gross income (“AGI”) up to $75,000 ($2,400 for joint filers with AGI up to $150,000) plus an additional $500 for each child under the age of 17. There is a phase out of the rebate, which causes a $50 reduction in the rebate for every $1,000 of AGI above these thresholds. These payments will be based on the AGI reported on tax returns filed for 2019, and if no return has been filed for 2019 yet, then the AGI reported on the 2018 filed tax returns will be used. Delaying the filing of the 2019 tax return may be beneficial for some if their 2019 income may push them over the threshold. On the flip side, if your financial picture has changed in 2019 that may bring you below the threshold whereas in 2018 you may have been above it, then filing 2019 ASAP may be needed.

You do not have to do anything to get these checks. The IRS will be evaluating your tax years (2018 or 2019 as mentioned above) and will either send you a direct deposit payment to the most recent bank account they have on file for you or they will mail you a check if they do not have ACH information on file and/or if that bank account is no longer open.

You can update your address and direct deposit information to ensure you get your stimulus check gets to the right place at this link - https://www.irs.gov/coronavirus/get-my-payment

Mortgage Payments

Most lenders may allow you to submit a forbearance request if you are experiencing financial hardship due to the COVID-19 crisis. For people affected by the crisis, lenders are supposed to accept these requests for a period of 180 days. Foreclosure action is prohibited for the 60 day period beginning March 18, 2020.  Please get in touch with your lender to determine payment options and deferrals that may assist you financially.

Retirement and Other Employee Benefit Plans

The CARES Act provides additional relief with respect to distributions and participant loans through your retirement plans. The bill waives the 10% early withdrawal penalty for distributions up to $100,000 for coronavirus-related purposes, retroactive to Jan. 1. Withdrawals are still taxed, but taxes are spread over three years, or the taxpayer has the three-year period to roll it back over to negate tax obligations. Loan limits on 401Ks have been increased from $50,000 to $100,000. Required minimum distributions have also been suspended. If utilizing retirement funds during this time may help you or your family we urge you to get in contact with your investment advisor to discuss options on your specific plans.

Student Loans

Federally backed student loan payments of principal and interest may be suspended. If this may affect you we urge you to contact who your student loan is through to discuss your payment options.

Credit Reporting

From January 31, 2020, through the expiration of the national emergency declaration, reports to credit reporting agencies must show accounts current, event where there is a forbearance or agreement to defer or modify payments of a person affected by the COVID-19 crisis. Please contact your creditors to work out payment options. We can assist you with credit repair on any derogatory reporting if needed. Please get in touch with our office if you need this assistance.

Other Aid

There are lots of other provisions in the CARES Act not highlighted above, and outside the scope of this summary. Those provisions include, but are not limited to, new programs to support the health care system, large corporations with more than 500 employees, airline assistance, agriculture assistance, to improve the nation’s preparation for future outbreaks, and the providing of relief for educational institutions and other designated industries.



Questions? Contact Us -

We take pride in making an impact in our clients life and helping as much as we can. We are assisting a lot of employers with gathering what is needed for these relief options right now. We have resources to assist you with any of these options and walk you through whichever process is needed for them. If you need our assistance applying for, gathering information for, or even just to talk through what may be the best for your specific situation please feel free to reach out to us.

For questions:
Steph can be reached directly at 503-539-5419;
Valerie can be reached directly at 971-803-8173;
and you can send us an email at books@stephsbookkeeping.com anytime. Please expect possible 24 hour delays in responses as we are trying to navigate this crisis with all of our clients.


We work with a lot of our clients remotely. Take a second to look at our "Meet Our Staff" Page to learn more about our awesome team!




Disclaimer - The materials and information given at anytime from Steph's Bookkeeping Service, Inc are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue, problem or question. Use of and access of this information do not create an attorney-client relationship between Steph's Bookkeeping Service, Inc and the user or client. The opinions expressed through this document or during any conversations may not reflect the opinions of the firm entirely or any individual attorney.




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*Updates to Come*


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