The U.S. Small Business Administration (SBA) has never faced a challenge like the COVID-19 outbreak, but they’re stepping up to help small business owners who are suffering financially during these uncertain times. The SBA’s mission is “to maintain and strengthen the nation’s economy by enabling the establishment and viability of small businesses and by assisting in the economic recovery of communities after disasters.” While most disaster loans the SBA has made in its history went to individuals for homes damaged by natural disasters (weather incidents), the coronavirus pandemic certainly qualifies as a disaster as well. Here’s the official guidance on the program:
“The U.S. Small Business Administration is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). Upon a request received from a state’s or territory’s Governor, SBA will issue under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, an Economic Injury Disaster Loan declaration.”
Any Economic Injury Disaster Loan assistance declaration issued by the SBA will make loans “available statewide to small businesses and private, non-profit organizations to help alleviate economic injury caused by the Coronavirus (COVID-19).” The loans offer up to $2 million in assistance and can help small businesses to overcome the temporary revenue losses they may be experiencing. A current list of areas eligible for SBA disaster loans can be viewed here. Wondering what the loans can be used for? Here’s a few qualifying costs:

Fixed debts
Payroll
Accounts payable
Other bills that can’t be paid as a result of the disaster’s impact

For small businesses, the interest rate will be 3.75%. The interest rate for non-profits is 2.75%. Terms for these loans will be determined on a case-by-case basis, depending upon the borrower’s repayment ability. SBA does offer loans with long-term repayment options up to a maximum of 30 years in order to help keep borrowers’ payments affordable. In addition, Congress is finalizing plans for a loan forgiveness program, which will provide businesses with additional payroll, sick time and family leave financial assistance. Watch our blog for more details. These SBA Economic Injury Disaster Loans make up one piece of the federal government’s economic response to the crisis, and more details will be forthcoming as time goes on. Our practice is committed to helping you navigate the uncharted waters currently being faced by the business community during the COVID-19 outbreak. If you want to discuss applying for one of these SBA loans for your business, please contact our office today so we can assist you in making the application process go smoothly.

The rapid spread of the COVID-19 virus has begun to initiate an economic downturn and spurred a series of rapid responses on the part of the government. There have been so many proposals and versions floated regarding employee policies during the public health emergency that employers are understandably confused. Though there was an initial belief that the crisis would require businesses to make permanent reductions in their work force in order to survive, the final version of the Act may make these types of drastic actions unnecessary. President Trump signed the new law on March 19th, and it will take effect on April 2nd. The economic stimulus measures and allowances that it makes will extend through December 31st, 2020. The Act is comprehensive and makes significant changes to previously existing rules regarding both the Family Medical Leave Act (FMLA) and Emergency Paid Sick Leave, as well as in other areas. The focus of the changes contained in the new law is on companies with fewer than 500 employees. There is already discussion of exemptions for smaller businesses employing fewer than 50 people whose viability may be threatened by these measures. Also, the measures covered in the Act are not pertinent to companies that employ 500 or more employees. Action will likely follow with regard to companies of this size. Below is a summary of the new law’s measures: Emergency Paid Sick Leave Act If your company employs fewer than 500 employees, the revised Emergency Paid Sick Leave Act makes them eligible for paid sick leave regardless of how long they have been employed by you. If an employee of a company that employs fewer than 500 employees is unable to work in person or to telecommute for any of the following reasons, they qualify for paid sick leave:
If they are subject to federal, state, or local isolation or quarantine related to COVID-19
If a health care provider advised them that they should self-quarantine as a result of concerns related to COVID-19. Note: self-imposed quarantine does not qualify.
If the employee is seeking medical diagnosis as a result of having symptoms of COVID-19
If the employee is caring for somebody who is subject to a federal, state, or local isolation or quarantine due to COVID-19; or who has been advised to self- quarantine by a health care provider as a result of COVID-19. Note that this particular allowance is not limited to family members.
If the employee’s child’s school or care facility has been closed or is unavailable as a result of COVID-19 and the employee needs to care for the child
There is an additional reason for qualification that references “substantially similar conditions” that have yet to be clarified, but for which future clarification by the Secretary of Health and Human Services has been promised. Defining the Paid Sick Team Benefit The exact definition of what paid sick time comprises is based upon the number of hours that an individual employee works. For those who are full-time employees, paid sick leave is calculated to be 80 hours. Those who work part-time will be entitled to the same number of hours of paid sick leave that they would normally work during a two-week period. The Act provides a calculation method for those who work significantly different numbers of hours each week. Referencing the numbered reasons listed above, employees who need paid sick leave based on 1, 2 and 3 will be paid their sick leave benefit at the same rate that they are normally paid up to a maximum of $511 per day and a total of $5,110. Those who need paid sick leave based on the above-referenced reasons numbered 4 and 5 will be paid their sick leave hours at a rate equal to two-thirds of their normal pay, with a maximum of $200 per day and a total of $2,000. The Act makes the emergency paid sick time available as of April 2nd, and specifically prohibits employers from requiring employees to use other accrued paid leave before using the emergency leave. Any existing paid sick leave or paid time off is separate and apart from the leave provided by the Act and remains with the employee. Additionally, though employers may require reasonable notice of using the emergency paid sick leave, this notice is not required until after the first workday (or part thereof) that is used. The employer is not permitted to make employees provide advance notice before the first day that they take paid sick leave under the emergency measures. These new measures will be explained in a uniform notice that the Secretary of Labor is required to create and provide no later than March 25th. Employers are required to post this notice in a way that all employees are able to see it. The paid sick leave covered by this Act does not carry over into 2021. Similarly, once the qualifying need has passed and the employee returns to work, the paid sick time benefit ceases. Further clarification to help employers calculate leave benefits is forthcoming, as there is a requirement for guidelines to be available from the Secretary of labor no later than April 2nd. What is already known is that employers will be able to apply for reimbursement of these emergency paid sick leave wages through Social Security tax credits. Emergency Expansion of Family Medical Leave Act COVID-19 has created countless disruptions in American life, and one of the most significant has been the closure of schools and care facilities for children. Employees who have young children who need supervision and care have been torn between their parental responsibilities and the need to support their families. In response, the Families First Coronavirus Response Act includes the Emergency Family and Medical Leave Expansion Act (FMLA Expansion Act). It will enable eligible employees to access a federal source of paid leave. In its original form, the Family and Medical Leave Act’s reach has been limited to those who work for employers who employ 50 or more people, and amongst that population it is only accessible to those who have been with their employer for at least a year and have worked at least 1,250 hours in the previous 12 months. For those individuals, the Act provided unpaid leave under highly specific circumstances, including their own diagnosis with a serious health condition, to care for a newborn infant or adopted or foster child, or to care for a family member with a serious health condition. The new Emergency Act expands those rules, changing the employer threshold to all that employ fewer than 500 employees and expanding who is covered to include all workers who have worked for these employers for a minimum of thirty days. As is true of the paid sick leave act, the Secretary of Labor will be able to take action to exempt organizations with fewer than 50 employees if their business’ viability is threatened by making this leave available. Additionally, certain health care providers and emergency responders may also be exempted. Under the Expanded FMLA Leave Act, employees of companies that employ fewer than 500 employees are able to take up to 12 weeks of leave if they can’t work (in person or via telework) because of their care responsibilities for a child or children under 18 years of age whose school or care facility has been shuttered as a result of COVID-19. The twelve-week period will provide compensation after the first ten unpaid days (though employees can use accrued paid sick or vacation time to provide payment for those ten days). The compensation will be calculated at two thirds of the employee’s normal wages for the number of hours that they were regularly scheduled to work, maxing out at $200 per day and a total of $10,000. The program will become available on April 2nd, and though the Act specifies that if the need for leave is anticipated the employee should provide their employer with “such notice of leave as is practicable,” advance notice is not required. Employees who work for companies that employ 25 or more employees and who fear that they will lose their job or position as a result of taking advantage of this emergency FMLA act are entitled to return to the same or equivalent position once their leave is finished. Smaller companies (with fewer than 25 employees) are also covered by this rule unless the position no longer exists as a result of changes in economic or operating conditions related to/resulting from COVID-19 and the public health emergency. Even under these circumstances, the emergency Family Medical Leave Act requires employers to do their best to put the employee into an equivalent position, and failing that to offer an equivalent position to the employee should one become available for at least one year. What This Means To use a cliché that is being heard far too often in the news, we are in uncharted waters when it comes to COVID-19. Though we do not know what is going to happen, employers and employees can take some comfort in knowing that the Act passed by Congress and signed by the president is a strong measure that recognizes the real-world needs of both sides. States may provide their own additional benefits at some point, but what the federal government has done means that those with full-time jobs working for companies with less than 500 employees can have confidence that they will be paid both for up to 12 weeks of FMLA if their child’s school or care facility closes down as a result of COVID-19, with all but the first ten days paid at their full rate (but no more than $200 per day and $10,000 in total). It all adds up to a maximum of no more than $12,000, representing a significant cushion as compared to what had previous been available. Similarly, full-time employees who can’t work as a result of the first three reasons that meet the Paid Sick Leave Act criteria can receive 80 hours of Federal Paid Sick Leave from their employer at either their full regular rate or a maximum of $511 per day and $5,110 in total. Employees are also permitted to use any paid sick leave, paid time off or paid vacation days that they have accrued, though they are not required to do so before taking advantage of the benefits of the federal emergency act. The Emergency FMLA provisions will not be triggered by quarantine, although there may be traditional, unpaid FMLA leave rights available, as well as unemployment insurance. Employers who provide these emergency benefits to employees will be given refundable tax credits against their Social Security taxes that will refund them fully for qualified sick leave and family leave wages under the Act.

The COVID-19 outbreak is affecting every facet of our lives – including our taxes. Check here for all your FAQs to see how you may be impacted.
Q: Has the government extended the filing deadline? A: Yes, the federal government has extended the April 15 filing deadline for 2019 tax returns to July 15, 2020. Please check with your tax preparer about whether or not your state extended the deadline. Q: Has the government postponed the deadline to pay my taxes? A: Yes, as a result of extending the filing due and as a result of a previous postponement, the time for taxpayers to pay their 2019 taxes is extended until July 15, 2020. Please check with your tax preparer regarding any postponement available for your state tax. Q: Is April 15 still the last day I can make an IRA contribution for 2019? A: No, the last date to make an IRA contribution is the same as the tax return filing due date so you now have until July 15, 2020 to make the contribution. Q: Are Corporation taxes affected by the extended filing due date? A: Yes, the filing due date for calendar year C-corporations has also been extended to July 15, 2020. As a result of extending the filing due date, the payment of taxes and filing of estimated taxes has also been extended. Q: Are estate and trust income taxes also extended? A: Yes, the estate and trust income tax return due date been extended to July 15, 2020. Therefore, any tax payments are also extended. Q: If I can’t file my return by July 15, what can I do? A: You can file an extension using Form 4868 which gives you until October 15, 2020 to file your return. Q: What about relief for other types of tax filings? A: The IRS has not provided a payment extension for the payment or deposit of any other type of federal tax (including payroll taxes and excise taxes) or for the filing of any tax return or information return. Q: Is there any tax relief for other types of tax filings that are late? A: Yes, taxpayers may seek relief under certain provisions of the tax code that allow the IRS to waive penalties by reason of casualty, disaster, or other unusual circumstances, the imposition of such addition to tax would be against equity and good conscience. Q: What should I do if I have an appointment with my tax preparer in the near future? A: Most are now handling appointments remotely by phone, email and documents exchanged digitally by secure means. You should contact your tax preparer for details.

As part of the efforts to contain the COVID-19 outbreak, the elderly, especially those over the age of 80 who are most susceptible the dangers of the virus, have been asked to self-isolate themselves. At the same time, the public has been asked to assist family, friends and neighbors who can’t do their own their grocery shopping, pick up medication, or need other assistance. Unfortunately, there are those among us who would take advantage during this crisis. For instance, someone pretending to be a neighbor may call and offer to provide assistance with grocery shopping. Or the caller might pretend to be from a charitable or government service that provides shopping services for those confined at home. These crooks are clever, so you have be very cautious. If you don’t know the person, don’t give them your credit card number or any other personal information such as your Social Security number, driver’s license, bank information, passwords or other financial information. If you are a family member of someone who is confined at home and might not be aware of their risk of being scammed, please take time to call them and caution them about the risks. This might also be a good time to discuss other means scammers use to steal your identity or separate you from your money. One of the most popular methods these unscrupulous people use is requesting your personal information by e-mail. They are pretty good at making their e-mails look as if they came from a legitimate source such as the IRS, your credit card company, or your bank. You need to be very careful when responding to e-mails asking you to update things such as your account information, personal identification number (PIN), or password. First and foremost, you should be aware that no legitimate company would make such a request by e-mail. If one does, the e-mail should be deleted and ignored, just like spam e-mails. We have seen bogus e-mails that looked like they were from the IRS, well-known banks, credit card companies, and other pseudo-legitimate enterprises. The intent is to trick you and have you click through to a website that also appears legitimate, where they have you enter your secure information. Here are some examples:

E-mails that appear to be from the IRS indicating you have a refund coming and claiming that additional information is needed to process the refund. The IRS never initiates communication via e-mail! If you receive this type of e-mail, you should know right away that it is bogus. If you are concerned, please free to call this office.
E-mails from a bank indicating that it is holding a wire transfer and needs your bank routing information and account number. Don’t respond. If in doubt, call your bank.
E-mails saying you have a foreign inheritance and that the sender needs your bank info to wire the funds. The funds that will get wired are yours going the other way. Remember: if it seems too good to be true, it generally is.

We have seen cases where elderly individuals have been duped out of hundreds of thousands of dollars, and sometimes their entire life savings. The scammers primarily rely on individuals’ fear of the IRS, coupled with a phony urgent need to make a payment to avoid arrest, foreclosure, or property seizure. We could go on and on with examples. The key here is for you to be highly suspect of any e-mail requesting personal or financial information or requesting an immediate tax payment. Scammers will generally request payment be made by gift card, which should be an immediate RED FLAG! A good rule of thumb is to STOP—THINK—DELETE. If you receive electronic correspondence from the IRS, your state taxing agency, a credit card company, or a financial institution and feel uncomfortable ignoring it, call this office to check so you won’t need to worry. Knowing that this is the time of year when the IRS sends correspondence to taxpayers, scammers will send fake letters to trick people into making payments on bogus tax liabilities. As a result, taxpayers need to be very careful to avoid being hoodwinked by these thieves. The best practice is to have a tax professional review any letter that you receive before you take any action. If the letter is real, then it will require a timely response, but if it is fake, it should be ignored. Scammers have also been known to call individuals and threaten immediate arrest if a payment related to a phony liability is not immediately made. Just the threat of arrest is enough to know that the call is from a scammer, and you should immediately hang up. Bottom line: you must be on guard against these scammers at all times. Don’t be a victim. Please call this office if you have question or believe your tax ID has been compromised.