There have been recent developments and notices that could impact small businesses and individuals. Please see below for two recent Acts that could have a significant positive impact on you and your business.

ACt 1: families first coronavirus response act

There have been recent developments and notices that could impact small businesses and individuals. On March 20, 2020, the President signed the Families First Coronavirus Response Act.  The Act became effective April 1, 2020. 

 

Please see below for some of the major points included in the Act:

  • Mandatory paid family leave – qualified employees are entitled to 12 weeks of paid family leave benefits equal to 100% of the wages paid to the qualified employee, limited to $200/day with a maximum credit of $10,000/employee.  The benefit is allowable for employees who must care for a minor child(ren) whose school or child care is closed due to the coronavirus quarantine or shutdown. 

  • Mandatory medical and emergency paid sick time – qualified employees are entitled up to 80 hours of paid sick leave for workers who are ill, quarantined, seeking care, or taking care of a sick family member.  The total benefit is limited to 

  • Employer payroll tax credits for employers who must pay for mandatory paid family leave and mandatory medical and emergency paid sick time; and

  • Credits for self-employed taxpayers to provide them with comparable benefits against their self-employed income.

 

The Act generally applies to businesses with less than 500 employees. The Act also automatically extends tax return filings and payments that were originally due April 15, 2020 to July 15, 2020.  The automatic extended due date applies to individuals, corporations, trust and estates, other noncorporate tax filers, and IRS or HSA contributions.

 

The California Franchise Tax Board has conformed and adopted the July 15, 2020 extended filing deadline. 

 

If a taxpayer wishes to file their required tax filings and payments due after July 15, 2020, an appropriate application for an extension to file must be properly executed.  Any payment not made by the July 15, 2020 due date will begin to accrue interest and penalties as of July 16, 2020.

ACt 2: families first coronavirus response act

The Coronavirus Aid, Relief, and Securities Act was enacted on March 27, 2020 to encourage small businesses to keep employees on their payroll, despite some economic hardship as a result of the COVID-19 pandemic. 

 

We have highlighted some of the key points of the Employee Retention Credit below:

 

  • Qualified Employers can receive a refundable payroll tax credit for continuing to pay their employees from March 12 to December 31, 2020.

    • The $5,000 maximum credit for each qualifying is based on qualifying wages up to $10,000 paid to retain employees on payroll.

    • The Qualified Employer must have experienced a full or partial operations suspension as result of a governmental agency order to limit commerce, travel, or group meetings due to COVID-19.

      • The employer must have also recognized a significant decline in gross receipts for any quarter during 2020

  • The Employee Retention Credit cannot be used on the same wages paid to employees under the qualifying leave wages under the FFCRA.

  • If the Qualifying Employer applies for and receives a Small Business Loan under the Paycheck Protection Program, they are not qualified for the Employee Retention Credit.

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