Coronavirus Aid, Relief & Economic Security Act
Individual Direct Financial Subsidy
The $2-trillion stimulus package provides near-immediate financial assistance to households. The package includes a one-time payment of $1,200 for individuals, $2,400 for couples, plus $500 per child. Most Americans will qualify with limitations for households that have income above specified thresholds. Checks are expected to be issued automatically within the next several weeks and no action is required for people to receive their qualifying amount of payment.
Employer Subsidies to Relieve Employee Finances
The Paycheck Protection Program (“PPP”): Authorizes forgivable loans to small businesses to pay their employees during the COVID-19 crisis. The U.S. Small Business Administration (SBA) will guarantee loans of up to $10 million to eligible businesses. The loans will be forgiven if businesses maintain payroll for eight weeks at employees’ normal salary levels and use the loan proceeds for qualifying expenses.
Effective April 3, 2020 businesses can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Questions should be directed to your local lender to determine its participation in the program.
About half of the funds granted by Congress have been applied for as of this writing. There are negotiations underway to increase the funding by an additional $250 billion.
Note: There have been reports of slow reaction times by institutions implementing the loan program.
Business owners may expect some speed-bumps in applying as well as delays in receiving funds.
Paid Sick Leave: Virginia employers are 100% reimbursed by the feds for providing paid sick leave as supplementary financial relief to employees for COVID-19 related reasons:
• Up to 80 hours of paid sick leave and expanded child care leave when employees’ children’s schools are closed, as they are in Virginia, or child care providers are not available.
• Health insurance costs are also included in the credit.
• Employers face no payroll tax liability.
• Self-employed individuals receive an equivalent credit.
• An immediate dollar-for-dollar tax offset against payroll taxes will be provided
• IRS will send owed refunds as quickly as possible.
Tax and other regulatory developments are changing rapidly at both the federal and state levels. We’ll work hard to keep you abreast of the evolving landscape and how it affects you. For immediate answers to your questions, please contact Blair + Assoc. We promise to respond promptly.