March 25, 2020 0 comment

Families First Coronavirus Response Act

Hello everybody. Ben Smith here with Etrends Tax and Accounting. I try to keep up on all of the going-on’s over there on capitol hill as well as a little with the Coronavirus and how it’s affecting us. I’m sure many of you are sick of it or tired of it and I am too, but there’s some important things happening and some important things that have happened coming out of Washington that you should be aware of. This is going to be of interest to pretty much everybody. Whether you’re an employee or whether you’re an employer, this is going to be of interest to you. The Families First Coronavirus Response Act has already passed and been signed into law and it provides a number of benefits. The biggest benefit is that at least for the time being during this crisis employers are required to give their employees paid time off for, well I mean it’s pretty broad, essentially it’s paid sick time and large employers are required to give their employees not only paid sick time, but paid time off for their families, if their families are sick or their children are sick or if their children are home from school because they can’t go to school because the schools are shut down, so this is a pretty broad act. It requires a lot of employers and of course provides a significant benefit to employees. 

Small employers are not required to provide paid time off for an employees family issues so if children are out of school or whatever, but they are required to provide paid time off for illness, so sick pay for their employees. That’s all fine and well. I’m sure if you’re a business owner right now and you’re listening to this you’re thinking well how am I supposed to do that, I don’t have any revenue, I’m shut down and now I’m supposed to pay all my employees if their sick and that is a problem. There are some benefits however. The congress has not left employers totally alone on this. Specifically employers get a credit for at least some, possibly all, but at least some of the amount they spend on paid time off. I’m not going to go through all of the details there. If you’d like them please give me a call and I can go through them with you in your particular situation, but just generally speaking if you have an employee who is home sick you can go ahead and get a credit for the wages that you paid that employee while they’re sick. You can take that credit on your 941 quarterly payroll tax return so it will offset the amount of payroll taxes that you owe. If the amount of credit is greater than the payroll taxes you owe, you can actually get a refund and not only that, but the IRS is not going to make employers wait until you file that quarterly payroll tax return. They’re actually going to provide an accelerated method to get that money. That information will be coming out shortly. Actually I think this week we should have what we call a streamlined claim process outlined. As of yet we don’t have those details, but know that is coming so if you have employees currently out sick there should be some relief for you here in a week or so and you can get that. Alright so there you go. Paid sick leave has become a requirement and of course paid child care leave for those larger employers has become a requirement.

Let me go over one other thing. This is not passed, this is not law, but it is being debated, it is currently part of the package being debated on the hill right now. The last part of this stimulus package that’s going forward and essentially it is a forgiveness of loan provision. What it will do if it’s passed is it will allow employers to take an SBA loan right now use the funds to pay employees and keep them employed during this time and on the back end if employers actually do keep their employees employed, they don’t let them go it provides that the government will forgive the loans that were taken out. So big huge benefit there. It’s not passed yet. Don’t run out and grab a loan based on that eventuality cause it’s just an eventuality, but good chance that it will pass and we’ll have that. Again all of this might be too late for you. I have clients who already shut down. The current shut down of what we’ve already been through is just too much, they couldn’t stay in there and they’ve already shut down so that is regrettable. 

I’ll just put a plug in right at the end here. I don’t want to run this long, but again and I’ve made two other videos at different times about this, but remember that there is an offer and compromise option for those of you with large unpaid tax liabilities maybe from 2019, maybe you just did your taxes. 2019 you had a large tax liability and now you find yourself with little income, you’re highly affected by the coronavirus and you can’t pay the tax. There are options to get that tax reduced or maybe even removed for many taxpayers. Not everyone can qualify, but many taxpayers will qualify. As a general guideline if you owe $10,000 or more in income taxes currently and you have seen a significant drop in income this month or maybe this year, there’s a good chance that you’re going to qualify for at least some relief through the offer and compromise process. Give me a call on that too. If you guys have any questions about any of this or you’re watching this video a week or two from now and you’re not sure where we are in the process because in a week or two things are going to be different and we’re going to have more information. If you’re not sure give me a call and I can help. I know what benefits are out there. What helps are out there from the government. I can advise you on business strategy. We can do a lot here to help you out and weather this crisis, so give me a call or set up an appointment with me. There’s a link below this video to do that. Have a great day!