It’s a challenge to keep up with rapid developments in the COVID-19 crisis. We will be sending email updates as often as necessary to help you stay informed and navigate the impacts to yourself and your business. Here’s the latest:
- WhippleWood has taken steps internally to respond to COVID-19. Our team continues to remain available and working toward upcoming deadlines. We are prepared to fully utilize technology to protect our staff, clients, and their families. Our cloud-based work environment allows us to safely and securely work from home while minimizing any physical interactions. We can also honor client meetings via remote connection. We’re doing everything we can to stay healthy and practice social distancing to prevent the spread of COVID-19. We encourage all of you to do the same and please reach out via phone or email.
- Federal tax payments can be deferred until July 15, 2020. The Internal Revenue Service and the Department of the Treasury recently released guidance on how taxpayers can defer tax payments of up to $1 million until July 15, in response to President Trump’s emergency declaration granting relief amid the coronavirus pandemic. The guidance permits all individual and other non-corporate tax filers to defer up to $1 million of federal income tax (including self-employment tax) payments that would be due on April 15, 2020, until July 15, 2020, without incurring penalties or interest. It specifically notes that the current relief does not change any other payment or filing deadlines. The guidance also provides corporate taxpayers a similar deferment of up to $10 million of federal income tax payments that would be due on April 15, 2020, until July 15, 2020, without penalties or interest. The guidance doesn’t change the April 15 filing deadline, but allows most taxpayers to avoid interest and penalties on their tax payments until July 15.
- Highlights of Phase II coronavirus legislation. The Families First Coronavirus Response Act takes effect on April 2 and covers all companies with up to 500 employees. It requires paid sick time for employees who are unable to work or telework due to six specific reasons:
- The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- The employee is experiencing symptoms of COVID-19 and seeking medical diagnosis;
- The employee is caring for an individual who is subject to a federal, state, or local quarantine order, or an individual who has been advised to self-quarantine due to concerns related to COVID-19;
- The employee is caring for the employee’s son or daughter, if the child’s school or child care facility has been closed or the child’s care provider is unavailable due to COVID-19 precautions (Note: this effectively includes any employees with children, since all schools are closed); or
- The employee is experiencing any other substantially similar condition specified by the Department of Health and Human Services in consultation with the Department of the Treasury and the Department of Labor.
The calculation of the benefits gets a little complicated:
- There is an initial period of 10 days of unpaid leave before the benefits begin. An employee can use any accrued vacation, personal time, or sick leave to be paid during that period.
- The caps on the amount of pay that an employee may receive under the Act depend on whether it is the employee’s own condition or based on the employee’s caregiver status:
- Emergency sick time relating to an employee’s own condition (see 1–3 above) is calculated based on the employee’s regular rate or applicable minimum wage, whichever is greater, but is limited to $511 per day and $5,110 total.
- Emergency sick time relating to situations where the employee is acting as a caregiver (see 4–6 above) is calculated based on two-thirds of the employee’s regular rate or applicable minimum wage, whichever is greater, but is limited to $200 per day and $2,000 total.
- Employees who work a part-time or irregular schedule are entitled to be paid based on the average number of hours the employee worked for the six months prior to taking emergency Family and Medical Leave Act (FMLA) time. Employees who have worked for less than six months prior to leave are entitled to the employee’s reasonable expectation at hiring of the average number of hours the employee would normally be scheduled to work.
- Employees are covered if they have worked for the employer for at least 30 days prior to the leave.
- The Act allows the Secretary of Labor to exclude health care providers and emergency responders (although the Act itself does not exclude these workers). In addition, it allows the Secretary of Labor to exempt small businesses with fewer than 50 employees if the required leave would jeopardize the viability of their business (the Act authorizes the exemptions but does not require them).
- Employers with 25 or more employees are required to return any employee who has taken the emergency leave to the same or equivalent position upon their return to work.
The Act also includes refundable tax credits to reimburse employers who must provide the coverage. The credits offset the employer’s portion of Social Security taxes. In addition, employers are supposed to be reimbursed if their qualified leave wages exceed the taxes they would owe. It’s not yet clear how that works.
- SBA disaster loans are available to small businesses. Colorado was just declared a disaster area, in addition to many other states, in response to the COVID-19 pandemic. This allows small business to apply for low interest, long-term loans through the Small Business Administration. More information, including the process to apply for the loans, can be found at https://disasterloan.sba.gov/ela/.
- WhippleWood can help you and your business manage its response to the COVID-19 crisis. Please reach out to us and let us how we can assist at 303-989-7600 or email your client relationship manager.
We will keep you up-to-date regularly as the situation develops.