Government Help For Business: Covid-19

Like most of us, you may be struggling with business issues under current COVID-19 conditions. How long will it last?  What do I do about my workforce?  On and on. Now there’s government help during the COVID-19 pandemic.
We here at JumpStart Profit are committed to protecting and growing our clients’ profits. The Federal Government has passed the CARES act which might actually help you. Here’s a topline description of benefits for which you may qualify:

1) Paycheck Protection Program

The SBA is offering $349 billion Paycheck Protection Program Loans.  No collateral or guarantees required. 

Interest rates may not exceed 4%. Loan proceeds may be used for eligible payroll expenses, rent, benefits, and utilities during the period from February 15, 2020 through June 30, 2020.

All or a portion of this loan may be forgivable.  Loans are available first come, first served. They will go quickly.  So contact your lender ASAP.

2)Delayed Social Security Payment

Making use of the deferral may help you to conserve cash flow in the near term.
The Cares Act allows employers to defer payment of the employer share (6.2%) of the social security tax it would otherwise be responsible for paying in 2020, effective for payments due after March 27, 2020.

Fifty percent of the deferred payroll taxes are due on December 31, 2021, and the remaining amounts are due on December 31, 2022. No interest or penalties would apply.

3)Employee Retention Payroll Tax Credit

For businesses whose operations were wholly or partially suspended by COVID-19, The CARES Act provides  a refundable credit against payroll tax (Social Security and Railroad Retirement) liability equal to 50% of the first $10,000 in wages per employee (including the value of health plan benefits) which results in a possible $5,000 per employee tax credit.

4) Be Careful About  Reducing Headcount, Hours, or Pay Rates.

A reduction in the number of employees or the compensation paid to employees would have a direct impact on the dollar amount of the forgiveness of the PPP Loan that you may be able to obtain.

5) Families First Corona Virus Response Act (FFCRA)

California Emergency Sick Leave applies effective tomorrow, Wednesday, April 1, 2020.
The FFCRA provides certain tax credits to offset private employers’ cost of paying emergency sick leave wages, which are capped at either $511 or $200 per day, depending upon why emergency sick leave is available, for eight days.

For payments made after April 1, an employer would be eligible for a tax credit toward Social Security taxes equal to 100% of emergency sick leave paid pursuant to the FFCRA.

6) Use NOL (Net Operating Loss) Now.

The CARES Act expands and accelerates the use of net operating losses (“NOL”) for businesses by allowing NOL carrybacks to apply to 100% of the prior year income. The provision allows for an NOL arising in 2018, 2019, or this year, to be carried back five years.

Best wishes for your continued success.

Jeff Hastings

P.S.  Call me (415.307.7972) direct,  anytime, to explore possibilities to JumpStart your profits by eliminating unnecessary costs and creating new revenue streams.

Legal disclaimer.  We are not attorneys, nor certified public accountants.  Always seek qualified professional counsel.