We understand that there has been much media coverage of various government subsidies and concessions now available to small businesses to relieve the economic impacts of the COVID-19 crisis. To help you navigate what is available and whether it makes sense for your business to apply for any of these programs, we offer the following summary of programs that are available as of today’s date:
At this time there are two new SBA Loan options available to businesses affected by the coronavirus pandemic. A summary of each loan is attached for your reference. If you believe you would like to apply for either of these SBA loans, we encourage you to review the attachments to determine which loan makes the most sense for your business. It is important to note that you may only receive funding from one option at this time.
If you want to apply for either of these loans and need our help, we would be happy to assist in applying for the COVID-19 SBA funding that’s recently become available to small businesses affected by the coronavirus pandemic. Please call or email us if you would like our help and we will send you an engagement letter. After signing the engagement letter you will be contacted by the person assigned to assist with your application to get started. They will provide you with additional information as well as the documentation that’s needed for your application.
It is solely at the financial institution’s discretion whether they approve your loan application and provide funding to you. It is your responsibility to show that your operations are adversely affected by the coronavirus pandemic. We are not guaranteeing that your loan will be approved or that you qualify for any loan forgiveness. We are only assisting to expedite your loan application process.
There are also several options available to offset wages paid against your payroll tax payments and defer some payroll tax payments. At this time, there are four different payroll tax options available. A brief summary of each is below. It is important to note that if you take advantage of any of these payroll tax credit options, you cannot count the same wages for the SBA Paycheck Protection Program should you choose to apply. We also encourage you to work with your payroll provider if you do decide you want to take advantage of any of these credits, as there are many details and thresholds that apply to each credit.
Employee Sick Leave Act: If you are required to pay your employees under the Employee Sick Act, you are eligible for a credit against your payroll taxes of 100% of the employee pay (subject to certain maximums per employee), 100% of the employer Medicare and other eligible costs. You must meet the requirements to be obligated to pay employees under this Act before you are eligible for this credit. Effective date for wages paid is 4/2/20 through 12/31/20.
Emergency Family Medical Leave Act: If you are required to pay your employees under the Emergency FMLA, you are eligible for a credit against your payroll taxes of 100% of the required employee pay (subject to certain maximums per employee), 100% of the employer Medicare and other eligible health insurance costs. You must meet the requirements to be obligated to pay employees under this Act and the credit is only available for maximum payments required under this Act before you are eligible for this credit. Effective date for wages paid is 4/2/20 through 12/31/20.
Employee Retention Credit: If your operations are suspended because of COVID-19 or you have a significant decrease in revenues, you are eligible for a credit of 50% of the wages paid plus certain other costs. Only the first $10,000 you pay each employee is eligible for this 50% credit. Effective date for wages paid is 3/12/20 through 12/31/20.
Employer Social Security Tax Deferral: If needed, you are able to defer the payment of the employer portion of social security taxes paid on wages between 3/27/20 through 12/31/20. The amounts deferred would be due to be paid 50% by 12/31/2021 and the balance by 12/31/2022.
All of the above payroll tax credits are refundable and can be applied for while filing your quarterly payroll tax returns or by filing Form 7200 in advance of your quarterly payroll tax report. The IRS has advised that it intends to start processing these requests in April 2020.
These are certainly unprecedented times. As we navigate them together, we want to extend our sincerest wishes that you, your families and your employees stay safe and healthy.
If you have any questions, please reach out to us at 708-386-1433 or 630-577-9074.