- The CARES Act expands the payroll tax relief provided under the FFCRA by allowing employers to delay remittance of their share of Social Security tax that would have been deposited between the date of the CARES Act’s. I’m working with Paycom to set-up our system to take advantage of this
Do we need to formally notify SSA that we taking advantage of this provision? I just don’t want to get tax notices later on.
--- Yes, we recommend formally notifying the SSA.
- Could the presenter please review if tax credits for paid emergency leave issued prior to April 1st? We have several employees that have taken 2 weeks of leave prior to April 1st and I’m concerned these leaves wouldn’t be
--- I assume that the question refers to the tax credit related to sick or family leave under the Families First Coronavirus Response Act. This amount may not be used in the computation of the average monthly payroll
- If someone’s hours are reduced from 40 hours a week to 20, can they file for partial unemployment?
--- It depends. If you work less than four days a week and earn $504/week or less, you may be eligible to receive partial UI benefits
It further depends on the applicable state law. New York and New Jersey, for example, offer partial unemployment benefits. I believe the individuals would also be eligible for the additional $600 per week under the CARES Act through July 31, 2020. Generally speaking, the CARES Act provides a weekly payment of $600 in addition to unemployment insurance benefits to which an individual is entitled, and the additional $600 is available through July 31, 2020.
- Same scenario as above – would this person also be eligible for the additional UI assistance under the CARES Act (which is an extra $600 per week)?
--- Generally, yes. The $600 per week under the CARES Act is available to employees in addition to unemployment insurance benefits they receive under state law. Accordingly, if an employee is eligible for partial benefits under New York law, the employee would get such partial benefits plus an additional $600 per week. Note that the additional $600 per week is only available through July 31, 2020.
- I am trying to set-up a daily $15 non-taxable meal allowance/expense for all of my “front-line” staff who are NOT working from home and are here every day risking their health. Do you know any “tax code genius’” that could help me “tweak” this normally taxable “benefit” into a valid non-taxable benefit under Tax Code Section 139? – retirement facility / senior housing non-profit?
--- Our tax department is still reviewing this question.
- Question: If you are part of a larger group, but you have separate federal IDS, and you do not share payroll administration or services, will you <500 employees
be calculated individually for each company, or?
--- The rules to determine whether these entities are “affiliated” are fairly complicated and heavily dependent on the individual facts. Generally, if all of the companies are owned by the same parent company or person, the companies are affiliated and the number of employees will be aggregated to determine eligibility under the PPP loan program.
- I know that for purposes of calculation payroll, you include $100,000 for those making more than $100,000. Is that full $100,000 for higher paid workers forgivable (assuming no other cutbacks)?
--- Yes, the portion of the $100,000 paid over the 8 week period after the loan is initiated is forgiven.
- Can an employee qualify for more than one leave at the same time? For example, and employee who has a spouse with a positive COVID-19 diagnosis and a child who has out of school for COVID related reasons. Do they get the 2 weeks first, then the 10 weeks?
--- Yes. In general, when an employee qualifies for leave under both the emergency paid sick leave act (EPSLA) and the emergency family and medical leave expansion act (EFMLEA), an employee may first use the two weeks of paid leave provided by the EPSLA. This use runs concurrently with the first two weeks (10 days) of unpaid leave under the EFMLEA, and then the remaining 10 weeks is paid under the EFMLEA.
- What is considered sufficient documentation to substantiate a request for emergency sick leave and emergency family and medical leave?
--- With respect to processing EPSLA or EFMLEA leave, your employee must provide you with documentation in support of paid sick leave or expanded family and medical leave, which must include a signed statement containing the following information: (1) the employee’s name; (2) the date(s) for which leave is requested;
(3) the COVID-19 qualifying reason for leave; and (4) a statement representing that the employee is unable to work or telework because of the COVID-19 qualifying reason. Additional documentation may be required depending on the reason for the leave.
If your employee provided oral statements to support their request for paid sick leave or expanded family and medical leave, you are required to document such information.
You are required to retain all of this documentation for at least 4 years. This documentation may be needed to support a later request for tax credits. A more detailed explanation of how you may claim tax credits can be found at https://www.irs.gov/forms-pubs/about-form-7200 and https://www.irs.gov/pub/irs- drop/n-20-21.pdf. You are not required to provide leave if materials sufficient to support the applicable tax credit have not been provided.
- Are there application forms available?
--- Applications are available online at labor.ny.gov.
- Where can I get a copy of the employer poster that is required?
--- Here is a link to the page with the poster, which I have also attached – https://www.dol.gov/agencies/whd/pandemic.
- Using 2019 records, do you select a typical quarter or do you take the annual payroll (including year-end bonuses) back out the excess over $100,000 and then divide by 12?
--- There is no definitive guidance, but we suggest you take the payroll for 2019 including year-end bonuses, reducing those employees making more than $100,000 (including year-end bonuses) and reducing them to $100,000, and then dividing by 12.
- Certain non-profits are not eligible. Do you know which types are not?
--- The PPP program is open for Section 501(c)(3) organizations,
- Is the base amount of the calculation just for payroll and related expenses? Or does rent and utilities get added into the calculation?
--- The base amount is payroll costs which include compensation, payment for vacation and leave, group health care costs, payment of any retirement benefit or severance, state and local tax assessed on the compensation of employees (limit to
$100,000 for salaries over $100,000). Rent and utilities are not included.
- We are wholly owned by a US LLC many layers up is a foreign owner. Are we still eligible for PPP?
--- Most likely yes. We recommend filing an application. The SBA application for PPP loans originally stated that borrowers with 20% or more of foreign ownership were not able to apply for loans. The new application that came out last night does not have this limitation. There is no further guidance in the Interim Final Rules regarding foreign ownership of loan applicants. Historically, the SBA has approved loans to businesses with foreign owners on a case-by-case basis depending on several factors such as physical location, payment of US taxes, etc.
- Can our payroll analysis be April 1 2019 - March 30 2020 as we implemented a 401k match in January?
--- No, our view is that it must computed on the average monthly payroll for 2019. There may additional guidance from the Treasury or the SBA regarding the base measurement period.
- Does bank require to put lien $ 2 million loan?
--- For EIDL loans above $25,000, the SBA will try to collateralize the loan and take a lien on the assets of the borrower and possibly the guarantor, if there is a guarantee.
- How many months of payroll is covered?
--- The base period for computation of the principal of the loan is the twelve months of 2019; the forgiveness period is 8 weeks after receiving the loan.
- Just to confirm, employees who make more than $100K still qualify, but it will be capped at $100K, correct?
- Should you apply for the sba loan first and then the PPP loan with your bank or do it concurrently sba loan meaning the economic injury loan up to 2million
--- We recommend applying for both loans as soon as possible.
- So is it just one month's payroll times 5?
--- It is the average monthly payroll for 2019, multiplied by 2.5.
- If we apply for the sba loan and decide we do not need it, what is the grace period to rescind the sba loan request?
--- At the time the loan is to be funded, you may refuse the money. In the alternative, you can receive the funds and prepay the loan with no prepayment fees.
- We used a PEO for payroll and benefits - Our payroll taxes were filed under PEO Tax ID - How do we show documentation?
--- The PEO should be able to give you a printout that you can submit to the bank when you apply for the PPP loan.
- Is it true that if an employer applies for PPP, the same employer cannot enjoy the Payroll Tax Credit? Like you can only choose one of the programs. Our CPA told us
--- Yes, that is correct.
- During the webinar a person asked a question “if we apply for PPP Loan, then we can not take advantage of payroll tax credit, correct?” The presenters responded “Yes, that is correct”.
Can you ask the speaker to elaborate on this? Please ask him to explain the reason companies are not able to take advantage of the payroll tax credit under Families First Coronavirus Response Act (Act)?
FFCR Act is different from CARES Act and provide different type of assistance so I am not 100% understanding why companies are not able to take advantage of the payroll tax credit in conjunction with the PPP loan.
--- To clarify, companies may not take advantage of the payroll tax credits under the CARES Act and the PPP loans. Companies may take advantage of the payroll tax credits under the FFCRA and apply for the PPP Loan, however payments for sick leave or family leave under the FFCRA are excluded from the determination of payroll costs.
- I attended the webinar with my colleague this afternoon, we really like the Q&A part. We raised a question about the eligibility for EIDL, if all other conditions are met except the business is a 70% foreign owned US company (70% owned by a foreign business entity, 30% owned by USA permanent resident individuals), is the business eligible for EIDL?
I tried to fill out the application online, but when it came to the question of EIN # for the business entity, the company ID # from the foreign country doesn't fit in the field, so I was stuck by that question.
--- There is no clear guidance regarding this issue. Historically, the SBA has approved loans to businesses with foreign owners on a case-by-case basis depending on several factors such as physical location, payment of US taxes, etc. We recommend you contact the SBA directly if the application won’t process applications without EIN numbers.
- If we apply for a PPP loan, can we also take advantage of the SS Deferral as part of the CARES Act?
--- No, you may not.
- If employee headcount varies, is the average headcount used? What if there is period (e.g. 2 months) where seasonal employees put the headcount at 500 but the full time year round employees are under 200?
--- There is no definitive guidance but our view is that at no point during the covered period from February 15, 2020 to June 30, 2020 may the applicant have more than 500 employees.
- If we apply to the which the presenter recommended we do now and do not have to wait, what is the impact to applying to the PPP loan? I attached what appears will be a sample and look at page 2 of PDF in highlight that certifies applicant to not have asked for another loan under this program? The question is what is the definition of “this program” refer to? Can you get me info or clarity on this nuance?
--- The EIDL and PPP are separate programs so you may only apply once for an EIDL loan and once for a PPP loan.
- My Average Monthly Payroll (up to 100k per employee) is based on 2019 W2s and covered 17 people, as we had some turnover. On the same line on the for, it asks for Number of Jobs. I assume that means currently as of today’s
--- There is no definitive guidance on this but we also assume it means currently as of the date of the application.
- There is also a NYC Small Business Continuity Loan Program. Can a company apply for both the PPP program AND the NYC Small business Continuity program?
--- Based on the current guidance, yes.
- What is the definition of program based on the EIDL and PPP loans?
--- The EIDL program is the Economic Injury Disaster Loan program and the PPP program in the Paycheck Protection program.
- Our parent company is a publicly traded foreign Can we apply for a PPP?
--- Most likely yes. We recommend filing an application. The SBA application for PPP loans originally stated that borrowers with 20% or more of foreign ownership were not able to apply for loans. The new application that came out last night does not have this limitation. There is no further guidance in the Interim Final Rules regarding foreign ownership of loan applicants that came out last
night. Historically, the SBA has approved loans to businesses with foreign owners on a case-by-case basis depending on several factors such as physical location, payment of US taxes, etc.
- Is a “small” business defined by revenue as well as employee count? If so, what’s the limit?
For purposes of the PPP loans, only the number of employees counts. The application may not employ more than 500 employees, or, if applicable, the size standard in number of employees established by the SBA for the applicant’s industry.
--- For purposes of the PPP loans, there is no revenue limit.