COVID-19 Relief for Businesses - March 22, 2021 Update
EXTENSION OF FAMILY AND SICK LEAVE CREDITS
There have been several rounds of legislation resulting in a number of payroll tax credits to help companies support their employees through the COVID-19 shutdowns and quarantines. Following are the main contenders:
1. CARES Act Employee Retention Credit
2. FFCRA Tax Credit for Paid Sick Leave
3. FFCRA Tax Credit for Paid Family Leave
Over the next several months we will be taking an in-depth look at how these credits may benefit our clients, and assisting with amending payroll tax forms (Form 941) as necessary.
PAYROLL PROTECTION PROGRAM
Guidance from the Treasury Department and the SBA continues to evolve regarding the Payroll Protection Program. The House of Representatives has voted to extend the deadline for PPP applications to May 31, so it’s now facing the Senate.
First Draw. Last year we sent out emails to our clients concerning the loans made available by the Payroll Protection Program. Organizations that did not receive PPP loans last year may qualify to take them this year. If you think that your company may benefit from a first draw PPP loan, contact us.
First Draw Forgiveness. For many first round PPP recipients, the deadline for applying for forgiveness is approaching. Some organizations may be able to take some of the credits listed above in addition the obtaining forgiveness for the PPP loan. The problem is that recipients cannot “double dip” by claiming the said credits on payroll paid with PPP funds. So this is a complicated calculation we are currently working to fully understand. If we are assisting you with your forgiveness application, will be in touch if we feel this applies to your company. If you are applying for forgiveness on your own but need help understanding how this works, please contact us.
PPP Expense Deductibility. There was initially some confusion whether or not the IRS would allow expenses paid with PPP funds to be deducted for income tax purposes. Congress and the IRS have now implemented changes so that payroll, utilities, and other eligible expenses paid with PPP funds are deductible for Federal purposes. States have taken different positions on this issue, and as it stands, North Carolina is currently not allowing deductions for these expenses paid with PPP funds. We continue to monitor developments in this area, and may recommend extending our clients’ tax returns if there is reason to believe that North Carolina may follow the Federal lead in this area.
Second Draw. Organizations that received first draw PPP loans and spent all of the funds for allowable purposes may be eligible to apply for another round if they meet certain criteria. If you feel that your organization is in need of these funds to support you at this time, contact us and we will explain the requirements to you in more detail.
OTHER AVAILABLE PROGRAMS
The SBA has set up some other programs to benefit certain industries, including the following:
RESTAURANT REVITALIZATION FUND (RRF)
SHUTTERED VENUE OPERATORS GRANT (SVOG)
The details are still under development by the SBA, but these are very specific programs targeted toward certain industries. For existing clients that feel these may benefit your organization, please contact us.