Payroll and tax related information, and other helpful links, due to the COVID-19 pandemic.
Check on the status of your Economic Impact Payment - use this link to update/add bank information and to file a return to receive the payment.
July 15, 2020 Federal and Ohio Tax Extensions
- IRS Filing and Payment FAQ Sheet
- IRS Coronavirus Tax Relief Website
- Ohio Extending Income Tax Filing and Payment Deadline
- Tax Updates by State - Plante Moran
Coronavirus Aid, Relief, and Economic Security (CARES) Act
As of 3/29/20
Employee Retention Credit - Credit equal to 50% of qualified wages up to $10,000 of wages, per employee ($5,000 max credit per employee)
- The business is fully or partially suspended during the calendar quarter due to orders from the government limiting commerce, travel, or group meetings due to COVID-19 (Likely this will impact most businesses Q1 2020 and Q2 2020) -OR-
- The business experienced a significant decline in gross receipts compared with the same quarter of 2019.
- The first eligible quarter = when receipts drop below 50% compared to 2019
- The credit continues to future quarters
- The last eligible quarter = when receipts are greater than 80% compared to 2019.
- Only through 2020.
- Note – Nonprofits 501(c) only has #1 available to them, and the regs say “shall apply to all operations of such organization”
- Note – cannot use this credit if taking an SBA loan, including the Paycheck Protection Program.
- Wages paid between 3/12/20 – 12/31/20
- Employers with average full time 2019 employees 100 or fewer = wages paid to all employees during the applicable periods.
- Employers with average full time 2019 employees > 100 = wages paid to employees not providing services during the applicable periods.
- Includes health insurance premiums allocated to these wages
- Not wages paid under the Families First Act (Sick/childcare pay) or FMLA
- Not wages that employers get the WOTC
- Cannot give anyone a raise during that time, or advance pay them…limited to what they would have made the 30 days prior to this.
Taking the Credit
- Similar to the Families First sick/child care leave – this will reduce 941 deposits, providing an immediate cash flow offset.
- Unlike the Families First Act, this act does not specifically say the credit will be considered taxable income...but guidance will probably come out later saying it is.
Paycheck Protection Program - Loans available to business that make a good faith certification that due to the uncertainty of current economic conditions a loan is necessary, and the funds will be used to retain workers/maintain payroll/make qualified payments.
- Paycheck Protection Program Application Form (PDF fill-in)
- Paycheck Protection Program fact sheet for borrowers
- Paycheck Protection Program fact sheet for lenders
If you participate in this Paycheck Protection Program, you would be ineligible for the new Employee Retention Credit, which would cover 50% of employee wages up to $10,000 each ($5,000 credit per employee).
- Less than 500 employees
- Includes 501(c)3 and self-employed
- 2.5 times the average monthly “payroll costs” (defined below) based on the 1 year period before the date on which the loan is made.
- Seasonal employers can use the 12 week period beginning 2/15/19 or 3/1/19
- If not in business 2/15/19 – 6/30/19, then use the period 1/1/20 - 2/29/20
Loan proceeds can be used for expenses during the “Covered Period” 2/15/20 – 6/30/20 Note this date range.
- “Payroll Costs”
- Interest on mortgage payments
- Health Insurance
- Rent/lease payments
- Interest on any other debt obligations that were incurred before 2/15/20.
Payroll Costs defined
- Salary, wages, commissions, tips, PTO – excluding compensation of an individual employee whose annual salary is in excess of $100,000.
- Health insurance premiums
- Retirement benefits
- Excludes payments under the Families First act (because those are already being reimbursed)
- Must use a bank able to lend under the SBA 7(a) guaranteed lending program – the local banks below qualify…check with your current bank first.
- Chase Bank
- Huntington Bank
- Key Bank
- Richland/Park National Bank
- US Bank
- Loan is at 4% interest, automatic deferral of principal, interest and fees for 5 months.
- Repayment terms of up to 10 years.
- No collateral requirement, No personal guarantees, No credit elsewhere tests
- No SBA fees, but the lender could charge a processing fee.
- Even if you would need to repay a significant portion of the loan – getting the loan will be much smoother than the other SBA financing options.
Loan Forgiveness - business that maintain payroll continuity from 2/15/20 – 6/30/20 can request forgiveness for some/all of the Paycheck Protection Program loans.
Employers must apply for the forgiveness – it is not automatic.
- Costs Incurred and Paid during “covered period” - 8 week period beginning on the date of loan origination. Note – this is a different period than the dates above. Seems like you can use the loan proceeds for a wider period than what would be forgiven.
Eligible Costs to be Forgiven – note, these are slightly different than the above
- “Payroll Costs” – same definition as above
- Interest on mortgage payments – mortgage had to be in place before 2/15/20
- Rent/lease payments – agreement had to be in effect before 2/15/20
- Utilities – services beginning prior to 2/15/20
- ***NOT - Interest on any other debt obligations that were incurred before 2/15/20.***
Cancellation of Indebtedness
- Will not be considered taxable income to the company
Reduction in Amounts Forgiven
Reductions in workforce, salaries and wages that occur from 2/15/20 – 4/26/20 will be disregarded so long as the reductions are eliminated by 6/30/20
- Reduction based on reduction in number of employees
- Average number of FTE employees per month 2/15/19 – 6/30/19 or
- Average number of FTE employees per month 1/1/20 – 2/29/20
- Average number of FTE employees per month employed during the covered period (8 weeks) divided by either:
- Average number of FTE is determined by calculating the average number of FTE for each pay period within a month
- FTE (Full-Time Equivalent) Employees – the regs do not specify if a full time person is calculated based on 30 hours per week or 40 hours per week.
- Reduction based on salary and wages
- The amount of any salary/wage decrease in excess of 25% of the total salary/wages during the most recent full quarter such employee was employed before the 9 week period. (Include only employees at less than $100,000 for 2019)
Families First Coronavirus Response Act - Effective 4/1/2020. All employers with less than 500 employees must offer PAID sick pay to their employees.
- Department of Labor Employee Fact Sheet
- Department of Labor Employer Fact Sheet
- Department of Labor Employer Required Posting Employee Notice
- Department of Labor FAQ Sheet
Ohio Bureau of Workers' Comp
Richland Area Chamber & Economic Development