Sick Leave Archives

Maximizing Your PPP Benefits and Employer Tax Credits

By Office Staff|2021-03-04T11:04:33-08:00March 4, 2021|Categories: Business Taxes, COVID-19|Tags: American Rescue Plan Act of 2021, CAA Act, CARES Act, COVID-19, Employer tax credits, Paycheck Protection Program, Sick Leave|0 Comments

In 2020, Congress passed a flurry of COVID-19 related legislation designed to help employers retain and pay their employees and stay in business. This relief has been offered primarily in two forms:

Paycheck Protection Program (PPP): PPP loans have been made available to qualifying small businesses to help them stay afloat and retain and pay as many of their employees as possible. A business receiving a PPP loan can then apply to have the loan forgiven; that is, whatever portion of the loan was used for qualifying payroll and expenses.
Employer tax credits: Additional employer tax credits have been made available to help employers cover the cost of sick and family leave for employees, employees who need to care for someone with coronavirus (including a child whose school or daycare is closed due to the coronavirus), and retaining employees when operations have been partially or fully suspended due to government orders during the pandemic.

Understanding and taking full advantage of these benefits within the parameters stipulated in the legislation can be challenging for small-business owners. At SWC, we’re here to help.

In this post, we provide an overview of the COVID-19 pandemic relief programs for which your business may be eligible. When preparing your business tax returns this year, your accountant or CPA should be asking you for copies of payroll tax returns and should be initiating additional consultations with you to see if you are eligible for any of the new employer tax credits. We say should because that’s how we handle this at SWC.

Wait! Before You File Your 2020 Tax Return, Read This

Don’t rush to file your 2020 tax returns. Consult with us first for three important reasons:

Both the PPP and the new employer tax credits provide potentially significant benefits for your business, and we want to make sure you reap the maximum benefit.
The new employer tax credits cannot be claimed on the same payroll being used for the PPP loan forgiveness. When completing your tax return and submitting documents for PPP loan forgiveness, you need to be sure you’re not confusing the two benefits.
Your state may not follow all the federal guidelines. We can help ensure that your state taxes account for any differences.

If you feel pressured to file your 2020 tax returns and are uncertain about any of the details related to the PPP or new employer tax credits, we strongly encourage you to file for an extension. With that recommendation in mind, it’s important that you take the time to consult with your tax advisor.

Sorting Out PPP Rounds 1 and 2

Congress provided two rounds of PPP loans — one in the spring of 2020 and another near the end of 2020. If you have taken advantage of the PPP, you should understand the rules and the differences between the two rounds (or “draws.”)

Important: The Coronavirus Aid, Relief and Economic Security (CARES) Act, enacted in March 2020, was silent on whether expenses paid with the proceeds of first draw PPP loans could be deducted. The IRS took the position that these expenses were nondeductible. However, the Consolidated Appropriations Act, 2021 (CAA, 2021), enacted at the end of 2020, provides that expenses paid from the proceeds of both first and second draw PPP loans are Continue reading… Continue reading… Continue reading…

COVID-19 Relief for Small Businesses and Their Employees

By Laura Stees, CPA|2020-03-25T15:09:17-07:00March 25, 2020|Categories: COVID-19|Tags: Cal-WARN Act, Families First Coronavirus Response Act, Family Leave, Sick Leave, WARN Act|0 Comments

The same steps the federal government and many state governments are taking to protect citizens from the coronavirus known as COVID-19 are — not by design but by unintentional consequence — slowing down the economy and hurting many businesses. Especially small businesses like the ones we often work with here at Stees, Walker & Company, LLP. Looking at the prospect of going for several weeks or months without revenue or with significantly diminished sales, small-business owners we work with are naturally worried about paying rent and covering payroll. Some have already had to lay off employees.

Fortunately, some relief is on the way. Here in California, on March 17 of this year, Governor Gavin Newsom signed an executive order suspending the requirement that employers provide 60-day notice for any mass layoffs. One day later, the U.S. Congress passed the Families First Coronavirus Response Act to expand the Family Medical Leave Act (FMLA) and related tax credits for employers.

In this post, we offer an overview of what the U.S. government and the State of California’s latest efforts mean for small businesses. First up, the suspending of the 60-day notice for mass layoffs.

Suspending the 60-Day Notice Requirement for Mass Layoffs

California employers required to adhere to the Worker Adjustment and Retraining Notification (WARN) Act and Cal-WARN Act are required to provide 60-day advance notice of any plans for mass layoffs or terminations. Governor Newsom’s executive order (No. N-31-20) suspends the 60-day notice requirement for forced closings, relocations, or layoffs directly related to the coronavirus known as COVID-19. The Governor’s executive order remains in effect for the duration of California’s current State of Emergency.

Note: Newsom’s executive order does not suspend WARN (Worker Adjustment and Retraining Notification act) or Cal-WARN in their entirety — employers are still required to honor their other obligations under these acts.

As a California employer, you’re still required to provide written notice to Continue reading… Continue reading… Continue reading…