Greetings,
Together we are facing a truly unprecedented situation. The Covid-19 pandemic is affecting our way of life, our families, our communities, and our businesses. Our hearts go out to anyone who's been impacted by the virus, whether directly or indirectly. Our thoughts are with those who are sick, to whom we extend our heartfelt wishes for a quick and full recovery.
Being a family business, FTP has always valued the importance that small and medium sized businesses play in holding together the fabric of our society. We would like to share a synopsis of the Coronavirus Aid Act, and the potential options available to those businesses so that we may all get through these trying times together. We encourage you to share this information we have received from our accountant Ross & Company with anyone who you think will find it beneficial.
On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security (CARES) Act, which is aimed to provide relief to taxpayers affected by the COVID-19 pandemic. Among these provisions are Paycheck Protection Program Loans, Employee Retention Payroll Tax Credit, expanded Economic Injury Disaster Loans (EIDL) and Employer Payroll Tax Deferment.
Economic Injury Disaster Loans (EIDL)
Apply with the SBA directly here
Borrow up to $2M for 30 years at 3.75%.
Payments deferred 1 year.
Emergency $10K cash advance grant available
Paycheck Protection Program Loan
Apply with your local bank. Program is not up and running as of 3-30-2020. Please check with your bank for when the application period begins.
Borrow 2.5X average monthly salary.
Borrow up to $10M for 10 years at 4%.
Payment deferred 1 year.
Forgiveness clause if used for payroll and certain criteria are met.
Employee Retention Payroll Tax Credit
Refundable credit is applicable for all wages paid between March 12, 2020, and before January 1, 2021.
Credit is computed on a calendar-quarter basis and equals 50 percent of qualified wages up to $10K paid to each employee or $5K in actual credit.
Eligibility for the credit begins with the first 2020 calendar quarter in which the employer’s gross receipts declined by greater than 50% of the corresponding calendar quarter of the prior year, and ends with the calendar quarter following the calendar quarter in which the gross receipts exceed 80% of the corresponding calendar quarter of the prior year.
For purposes of computing the credit, qualified wages paid to an employee during the relevant period may not exceed an amount that would have been paid to such an employee within the preceding 30 days.
Employer Payroll Tax Deferment
Not available to any employer who takes a loan under the Payroll Protection Loan Program.
Can defer payment of 50% of the eligible 6.2% employer portion of Social Security Taxes to 12/31/2021 and remaining 50% to 12-31-2022.
Self-employed business owners can make the same deferral of their self-employment tax.
In addition to the above, our NYC clients have the option to apply for the NYC Employee Retention Grant Program.
Please keep in mind that some of these programs cover the same employer costs and you cannot apply for all of them.
Source: Important Tax Updates-3/30/2020. Ross & Company CPA, PLLC
Ross & Company CPA, PLLC | 5 Florence Avenue, Smithtown, NY 11787
FTP and our amazing employees are committed to providing the service that our customers need and deserve through this time. More importantly we hope that this information may find its way to someone in need and prove to be beneficial. Please reach out if you have any questions, or if you just need to talk. We wish you the best during these difficult times and know that there will be better days ahead. Our community has proven resilient in face of past adversities, I am sure this time will be no different.
We thank you all for your continued partnership and friendship.
Sincerely,
131 White Oak Lane, Old Bridge, NJ 08857 - (732) 679-3700
105 Maxess Road, Ste. S-133, Melville, NY 11747 – (516) 288-3300