We’ve received many phone calls, emails, etc. from business owners as well as employees affected by COVID-19 business closures. We’re doing our best to share information as quickly as possible, and be there however we can for our clients. The following is a general summary of assistance we are currently aware of that may be available for you. As always please ask your accountant about your specifics, and if accepting any of the assistance below may affect you in other ways!
For employers with less than 500 employees, and affected employee (below) has worked for employer for at least 30 days, the government is putting a plan in place to reimburse employers for the following wages paid (payment of these wages may be required by law). This reimbursement is (unfortunately) planned to be done via a payroll tax credit. The government has said reimbursements will take place within 3 months.
More information can be found here: Dept. of Labor Paid Leave Information
If you have employees that:
- have coronavirus and are quarantined and you pay them while they are on leave, the government will reimburse you for the affected employee’s pay up to 2 weeks, and a maximum of $511 per day/$5110 aggregate.
- are caring for a family member with coronavirus and are quarantined and you pay them 2/3 of usual salary while on leave, the government will reimburse you, up to $200 per day/$2000 aggregate, maximum of 2 weeks.
- caring for a child whose school or daycare closed, and you pay them 2/3 of usual salary, up to $200 per day/aggregate $12,000, 12 week maximum
For those employers with layoffs being done or a reduction in employees’ hours & pay, Iowa Workforce has an active page just for COVID-19 related questions for both employers and employees. Information can be found here: Iowa Workforce COVID-19
For businesses & nonprofits looking for cash assistance via SBA loans, you may be eligible to apply for up to $2 million. Loans will be 3.75% for small businesses, and 2.75% for nonprofits, with repayment period maximum of 30 years. Loans will be available for paying fixed debts, payroll, accounts payable and other bills you can’t currently pay because of the disaster. Please note that Iowa was declared a disaster area Saturday, and is now eligible to apply (at the moment the website also lists disaster counties declared previously for Iowa due to flooding).
More information here: SBA’s Coronavirus Website.
More to come?
There’s currently another bill in Congress that the senate has debated. While some congressional members have indicated that this is a bipartisan effort, some have indicated that the terms in the bill don’t have support in the House. Only time will tell on this one.
Again, these are NOT law yet, but to give you an idea, the bill includes
- Cash for individuals – $1200 per adult, $500 per child. Income limitations exist, not everyone will qualify (single over $75k/married over $150k you’re likely not going to get this)
- Delayed payroll tax deposits – employers may not have to pay in their portion of tax until 2021 and/or 2022
- Net operating loss carrybacks may be back in play – if you have a tax loss and you paid tax in previous years, this may help you out when filing your tax returns for 2020, possibly even now if you had a loss in 2018 or 2019.
- You might be able to pull money out of a retirement account with lessened restrictions, repayment options available
- There’s a possibility of forgivable loans & grants to fund certain training (related to COVID-19), etc for small businesses
- There’s also a possible change in the paid leave limits and terms listed under payroll assistance
The AICPA is also advocating for small business assistance to assist with payroll in a more efficient manner than the available options above.
It is our sincere hope that Congress moves quickly to help the many clients that are affected here and now. Our hearts go out to all of the BakerStarrett family that is affected. Know that we care about each and every one of you. Please do not hesitate to reach out if you have any questions that we can assist with.