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Family First Coronavirus Response Act
Pay leave type: Under FFCRA, there are three different types of paid leave.
Employee National Paid Sick Leave: Your employee is sick and under quarantine with COVID-19.
Family National Paid Sick Leave: Your employee is taking care of a family member who is sick or impacted with COVID-19.
Family Medical Leave Act Expansion Paid Leave: Your employee is taking leave under the Family Medical Leave Act (FMLA) to care for children under 18 whose school or child care is closed because of COVID-19.
Under the FFCRA, you’ll get 100% credit towards your Federal Tax deposit for the wages paid under this act.
With the passage of the Consolidated Appropriations Act, 2021, the credits provided are extended until March 31, 2021. The paid sick leave and family leave for employees were not extended, but if employers elect to offer the paid leave, they can use the credits until March 31, 2021.
Employer Social Security Deferral
Employers are allowed to defer the payment of employer FICA taxes to December 31, 2022.
The Employee Retention Credit
Under the CARES Act, and now expanded by the December 2020 CAA, an eligible employer may be able to offset the impact of COVID-19 with an Employee Retention Credit. You must continue to pay employees during a COVID-19 related closure and carry on a business at some point (now it is before June 30, 2021 under the recent CAA legislation) to be eligible for the credit.
A qualifying closure occurs during any calendar quarter of 2020 in which:
The operation of your trade or business is fully or partially suspended due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to COVID-19); or
Your gross receipts are less than 50% of your gross receipts for the corresponding quarter in 2019
This means that just about everyone qualified who paid wages while closed, or paid employees more than the actual hours worked.
Under CARES, the credit is 50% of $10,000 in wages and benefits annually per employee.
Under the recent CAA (passed Dec 2020), the credit is expanded to 70% of employee wages and benefits based on $10,000 per quarter per employee.
Another change under the recent CAA law is the tax credit is now available to businesses that took a loan under the Paycheck Protection Program (PPP), including borrowers from the initial round of PPP who originally were ineligible to claim the tax credit.
First Draw and Second Draw Forgivable PPP Loan Funding
First Draw forgivable PPP