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  Upper Bucks Chamber of Commerce

ubcc BLOG

Federal economic sustainability package and PA coronavirus policy update for employers

4/14/2020

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BY MELINDA RIZZO
Covid-19 related tax relief provided to employers now could have a big impact on small businesses.

Under the new legislation all employers can take advantage of delaying employer payroll taxes, like Social Security, to give them more liquidity and operating income.

Here’s how it works: Catch-up payments for those who defer paying those taxes will require 50 percent of the deferred taxes to be paid by Jan. 1, 2021. The balance will be due by Jan. 1, 2022.

“Nobody is talking about this, and it can make a difference,” said Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce in Washington D.C.

But for those who will have loan forgiveness under the CARES Act Paycheck Protection Program or other loan forgiveness initiatives, payroll tax delays do not apply.

Other tax changes benefiting employers impacted by Covid-19 may be found on the U.S. Chamber of Commerce website at www.uschamber.com.

Employee retention credits, along with incentives to retain employees or hire back employees laid off because of Covid-19 hardships since February 15, aim to keep workers on the books.

Participation in these programs ultimately will require “…some deep soul searching by the business owner,” said Danielle Bodnar, UBCC executive director.

To better understand its provisions, the CARES Act has been rolled out in stages.

Here’s what’s been done so far, and what might be coming next.

Bradley said the CARE Act Phase I provided federal investment and infrastructure for the CDC (Centers for Disease Control and Prevention) and health care function, including free [Covid-19], regardless of an individual’s current health care coverage.

Phase 2 expanded the Family Medical Leave Act (FMLA) to cover those who become sick, are caring for sick family members, or who must remain at home to care for children due to Covid-19 closures of schools and day care centers.

“It is one of the rare times we have had a fully funded mandate. It’s 100 percent repaid,” Bradley explained.

Phase 3 deals with automatic payments of $1,200 for adults. Families with minor children will receive $500 per child. Phase 3 provides expanded unemployment benefits of $600 per week, and a 13-week extension of benefits on top of state unemployment benefits. Under the act, small business owners, sole proprietors, contract employees (form 1099 workers), gig and freelancer workers are covered. No timeline for when the UC application process opens to the new sectors covered has been set. Benefits must be applied for through the state unemployment compensation website.

Phase 3 also includes the Paycheck Protection Program (PPP) offered through the CARES Act. It is intended to recover lost income due to the coronavirus and to keep employees on the payroll.

A potential Phase 4 of the package is currently in discussion to fill gaps Phase 3 did not address, Bradley said.

He noted a possible Phase 4 rollout could include relief and financial resources to 501 C 6 non-profit organizations, like chambers of commerce and state and municipal governments who are also employers.

“We know state and local tax revenues have fallen off a cliff,” Bradley said.

Relief for companies funded through venture capital was also being explored, he said.

Bradley said government officials are keenly aware of marketplace concerns over how quickly relief money from the Paycheck Protection Program, Small Business Administration or expanded unemployment can get into the hands of those who need it.

“PPP was design in a period where we thought this [Covid-19] would be over sooner. There is no guaranteed deadline for this,” he said.

Bradley conceded there are limits to what banks can lend, and federal agencies are working to expand the number of lenders who can participate in the programs.

The Small Business Economic Injury Disaster Loan (EIDL), opens for applications to small businesses and sole proprietors on April 10.

EIDL provides $10,000 of grant relief, which means it is not paid back. Low interest EIDL loans must be repaid in two years from receipt of funds.

EIDL applications are made through the U.S. Treasury website.

Sonia Smith urges anyone on the fence about applying for an EIDL loan to do it anyway.

“If you receive a loan you have until the end of the year to decide if you want to take the funds,” she said.

Smith is an economic development specialist at the U.S. Small Business Administration in Philadelphia.

EIDL is designed to pay bills during Covid-19 – like business mortgages, or purchasing necessary supplies or equipment to keep the business at pre February 15 levels.

It is not designed to cover lost sales or income, or to fund business expansions, she said.

“Make sure to keep detailed records for how any money received [under any federal relief programs] is spent,” in case proof is requested by the government after disbursements are made, Smith said.

Bradley said employers could find lending and program resources and details about applying on the SBA and U.S. Treasury websites.
​
Details and updated information may be found on the U.S. Chamber of Commerce website at www.uschamber.com. 
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Covid-19 - Help is on the way!

4/6/2020

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BY MELINDA RIZZO
With Covid-19 changing how businesses can operate or if they may forced to close during the state mandated non-essential business shutdown order, there is relief.
  • Paycheck Protection Program (or PPP) aimed at protecting jobs for employers with fewer than 500 employees as well as 501 (c) (3) classified tax-exempt organizations. For guidelines and eligibility visit www.uschamber.com/sbloans.
  •  Mid and large-sized companies employing more than 500 people may be eligible for loans, loan guarantees and Federal Reserve credit support to lenders.
  • All employers who are fully or partially shut down, or who have or expect a loss of 50 percent in receipts to their business in a previous quarter are eligible for refundable tax credits.
  • All employers may also be eligible to delay payment of employer payroll taxes, like Social Security.
  • Gig/freelance and contract workers are now eligible for unemployment compensation under an expansion of those benefits. Filers must claim in the state in which they live and work. Updates to how to file should be available in coming days on the Pennsylvania website at uc.pa.gov. Unemployment benefits claims will not be filed through the federal government or its websites.
Provisions under the CARES Act mean tax changes, employee retention credits, loans, loan guarantees, Paycheck Protection Program (PPP), Small Business Economic Injury Disaster Loans (EIDL) and paid sick and Family Medical Leave Act expansions aim to benefit employers and workers directly impacted by Covid-19.
From employers forced to close their doors to furloughed and laid off workers filing unemployment claims in record numbers no sector, business or individual is untouched by the Covid-19 pandemic. 

A record setting $2.2 trillion federal government stimulus package known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law March 27, expands unemployment to those who were not eligible before.

“For employers struggling right now through layoffs or how to pay employees and whether they will stay open, it is important to understand the provisions in the stimulus package,” said Andrew Levy a member and attorney at McNees Wallace & Nurick LLC in Harrisburg. Levy provides labor and employment law legal counsel.

From the CARES Act more than $350 billion has been made available to small businesses to keep employees working. It makes grants, loans and employer incentives available on a broad scale, with simplified access points to provide liquid revenue as soon as possible.

The CARES Act aims to avoid a prolonged recession and downturn due to the massive shutdown of businesses resulting from mitigation efforts and stay-at- home orders due to the Covid-19.

“This is the largest package passed in U.S. history,” said Kevin Courtois, manager of congressional and public affairs at the U.S. Chamber’s Great Lakes Regional Office.

Which package or plan is right for your business depends upon a company’s workforce numbers and whether or not the pandemic has negatively impacted its business workforce or revenue.

There are different rules for firms with more than 500 employees, type of business entity- from sole proprietor to, S-Corp, LLC or incorporation as well as whether the business can operate under Gov. Tom Wolf’s shutdown order.

Provisions and relief offered through the CARES Act could mean the sink-or-swim difference for many small business owners.
“A lot of this is brand new and pending regulatory writing,” Courtois said.

He noted more than 3 million unemployment claims had been filed nationwide, and that many more were expected in the coming days and weeks.

Weekly webinar updates from the PA Chamber of Business and Industry in Harrisburg bring industry experts - from human resources pros to attorneys providing employment law counsel to chamber members.

The updates, available free of charge to UBCC members, aim to engage and help businesses better understand and navigate these important topics impacting their businesses.

While the new law is complicated, information is available regarding programs, tax credits, relief, business loans and grants on the www.sba.gov website. Once there, visitors will find applications for loans, grants and funding programs.

For a list and to sign up of PA Chamber events and calendar visit www.pachamber.org.

For more federal information visit small business resources at www.uschamber.com/co.

While UBCC’s office is currently closed to comply with Gov. Wolf’s non-essential shutdown order the chamber team is working remotely to help its members navigate these uncertain and unsettling times.

Check the website https://www.ubcc.org/covid-19-resources.html often for regularly updated resources, virtual networking events and tips during the Covid-19 pandemic.

UBCC is committed to providing support to our members and future members by sharing resources and establishing new initiatives with the Upper Bucks community.  Each week we will share articles and information to assist our businesses navigating these unpredictable times.
​
Now more than ever, UBCC is here to be your voice, represent our businesses, sustain business and be a part of the robust plan for recovery.
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    Upper Bucks Chamber of Commerce

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