Post #597: Payroll protection program, pass this along please.

Below is an email I received from Zimmer Biomet, a company I used to consult for.  I hope that they don’t mind if I share it, but I am not going to bother them, at present, to ask permission.

It’s a nice, succinct description of the Payroll Protection Program.  If you know a small business owner, you might want to pass this on to them.  Today is the first day on which they may apply for aid under this program.

The key phrase here is this:  “The PPP provides an opportunity for certain small businesses to receive monies in the form of a grant instead of a loan (subject to certain conditions).”  Grant means you don’t have to pay it back.

That’s all I have to say.  All credit to Zimmer Biomet for putting this together in an effort to help support their suppliers.  Here’s what they sent me:


Coronavirus Aid, Relief and Economic Security (CARES) Act

President Trump signed into law a stimulus package which includes the Payroll Protection Program (PPP) authorizing up to $349 billion to provide small businesses with the capital they need.  The PPP provides an opportunity for certain small businesses to receive monies in the form of a grant instead of a loan (subject to certain conditions).   I have attached an overview together with a short summary (below, with hyperlinks) that I encourage you to review to understand the PPP.  If you are interested in this program, I encourage you to look into this as soon as possible with your accountants, financial advisors and others to determine if in fact you would qualify.  There will no doubt be a lot of interest in this program (as well as others) so we strongly encourage you to gather the needed information sooner rather than later so you can timely submit an application (as appropriate).

Recently, the Treasury Department issued more details on this paycheck protection program and a loan application available for download.

 

Where can I apply for the Paycheck Protection Program?

You can apply for the Paycheck Protection Program (PPP) at any lending institution that is approved to participate in the program through the existing U.S. Small Business Administration (SBA) 7(a) lending program and additional lenders approved by the Department of Treasury. This could be the bank you already use, or a nearby bank. There are thousands of banks that already participate in the SBA’s lending programs, including numerous community banks. You do not have to visit any government institution to apply for the program. You can call your bank or find SBA-approved lenders in your area through SBA’s online Lender Match tool. You can call your local Small Business Development Center or Women’s Business Center and they will provide free assistance and guide you to lenders.

Timing:

Banks and other lending institutions are mobilizing now. Starting April 3, 2020, small businesses and sole proprietorships can apply. Starting April 10, 2020, independent contractors and self-employed individuals can apply.  We encourage you to apply as quickly as you can because there is a funding cap

 

A Spanish language version of the guide is at: https://www.uschamber.com/sites/default/files/coronavirus_aid_spanish_3.31.20.pdf

 

Refundable tax credits

The Treasury Department and the Internal Revenue Service released a set of frequently asked questions (FAQs) today that provide additional information to small- and mid-sized employers on refundable tax credits that reimburse them for the cost of providing paid sick and family leave to their workers as a result of the coronavirus.  The Families First Coronavirus Response Act (FFCRA) enacted on March 18 gives businesses with fewer than 500 employees funds to provide employees with paid sick leave and family and medical leave related to COVID-19.

The FAQs are available online at: https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs

A Treasury news release follows.  It also is available online at:  https://home.treasury.gov/news/press-releases/sm965

Treasury and IRS Release FAQs to Help Small and Midsize Businesses Navigate Paid Sick and Family Leave Tax Credits

 

April 1, 2020

 WASHINGTON – The U.S. Department of the Treasury and the Internal Revenue Service are offering small and mid-size employers more information on refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing their employees paid sick and family leave wages related to COVID-19.

“The financial strain American businesses are experiencing is not their fault,” said Secretary Steven T. Mnuchin. “These tax credits for small and mid-size businesses will cover the cost of providing paid sick and family leave wages, which will help protect the health of American families and businesses during this unprecedented time.”

The Families First Coronavirus Response Act (FFCRA), signed by President Trump on March 18, 2020, gives businesses with fewer than 500 employees funds to provide employees with paid sick leave and family and medical leave related to COVID-19.

Eligible employers can receive a credit in the full amount of the qualified sick leave and family leave wages paid for between April 1, 2020, and December 31, 2020. 

Employers can be reimbursed immediately by reducing their federal employment tax deposits.  If there are insufficient federal employment taxes to cover the amount of the credits, employers may request an accelerated payment from the IRS.

 

Read more information on small and mid-size business tax credits for paid sick and family leave.  https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs