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COVID19 Employer Financial Resources

There are three distinct opportunities for employers impacted by COVID-19 to receive financial assistance towards payroll and benefit costs during the current state of emergency.  An employer may use one or more of these resources as long as the costs for a specific time period is only reimbursed one time.  These resources include:

 

  1. Families First Coronavirus Response Act (FFCRA) Tax Credits for Paid Leave - employers subject to the EPSLA and the Expanded FMLA paid leave requirements are entitled to fully refundable tax credits to cover the cost of the leave required to be paid for these periods of time during which employees are unable to work (which for purposes of these rules, includes telework).  Certain self-employed persons in similar circumstances are entitled to similar credits.

IRS FFCRA Tax Credit Overview and FAQ 

 

  1. SBA Paycheck Protection Program (PPP) - The PPP is a provision of the CARES Act providing nearly $350 million in loans available to small business to keep employees employed, paid and covered under current employer sponsored health plans.

IRS PPP Overview

IRS PPP FAQ

 

  1. Employer Retention Credit - the Employee Retention Credit is a fully refundable tax credit for employers equal to 50 percent of qualified wages (including allocable qualified health plan expenses) that Eligible Employers pay their employees. This Employee Retention Credit applies to qualified wages paid after March 12, 2020, and before January 1, 2021. The maximum amount of qualified wages taken into account with respect to each employee for all calendar quarters is $10,000, so that the maximum credit for an Eligible Employer for qualified wages paid to any employee is $5,000.

         IRS Employer Retention Credit Overview

         IRS Employer Retention Credit FAQ

 

Note:  the following questions and answers from the IRS FAQs highlight the ability to receive credits under multiple resources as long as there is no duplicate reimbursement for the same wages.

 

https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequenty-Asked-Questions.pdf

Question: Do PPP loans cover paid sick leave?

Answer: Yes. PPP loans covers payroll costs, including costs for employee vacation, parental, family, medical, and sick leave. However, the CARES Act excludes qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act (Public Law 116–127).

https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act

 

Question:  May an eligible employer receive both the tax credits for the qualified leave wages under the FFCRA and the Employee Retention Credit under the CARES Act?

Answer:  Yes, but not for the same wages.  The amount of qualified wages for which an Eligible Employer may claim the Employee Retention Credit does not include the amount of qualified sick and family leave wages for which the employer received tax credits under the FFCRA.  

 

Question:  May an eligible employer receive Employee Retention Credit and a PPA Loan?

Answer:  No.  An Eligible Employer may not receive the Employee Retention Credit if the Eligible Employer receives a Small Business Interruption Loan under the Paycheck Protection Program that is authorized under the CARES Act (“Paycheck Protection Loan”). An Eligible Employer that receives a paycheck protection loan should not claim Employee Retention Credits.

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

Question:  May an eligible employer receive both the tax credits for the qualified leave wages under the FFCRA and the Employee Retention Credit under the CARES Act?

Answer:  Yes, if an Eligible Employer also meets the requirements for the employee retention credit, it may receive both credits, but not for the same wage payments.

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