The Infrastructure Investment and Jobs Act, signed into law on November 15, 2021, has upended the Employee Retention Credit (ERC) for the fourth quarter of 2021 for most employers.
Continue reading “COVID-19 Employee Retention Credit comes to an end for most employers.”Tag: Covid-19
Legislative Update – July 29, 2020
Legislative Update – July 29,2020
New Stimulus Bill in the Works
Senate Republicans just unveiled the initial draft of a trillion dollar stimulus bill. While the bill will require negotiation with Senate Democrats and is expected to undergo significant modification, there are several components that are positive, particularly for employers. Therefore, we want to share what we know about the bill so far and give you an idea of where things seem to be headed.
New WOTC Target Group
The bill includes a newly created WOTC target group: 2020 Covid-19 Unemployment Recipients. This is defined as someone who was receiving unemployment insurance in the week they were hired or in the previous week. The time period for eligibility is from the enactment date of the bill until January 1, 2021. The credit amount is up to $5,000 per qualified individual (50% of the first $10,000 in wages paid). If approved in the final bill, this additional tax credit would be significant. As of June 18th, there were 20 million people, or about 15% of all wages paid in the US, in this group.
An All New Safe and Healthy Workplace Credit
The proposal bill also calls for the creation of a new tax credit called “The Safe and Healthy Workplace Credit.” The bill creates a temporary tax incentive through the end of 2020 to help businesses defray costs for testing, personal protective equipment (PPE), and reconfiguring workplaces. This would apply to every type of business; from storefront to manufacturing plants; offices to health-care facilities.
This program is designed to promote and enable our employers to take the federal and state recommended steps to prevent the spread of Covid-19 in their workplaces. This helps businesses afford these costs so they can bring back their employees quickly while alleviating the fears of spreading the virus. The refundable tax credit against payroll taxes is for costs incurred by the business for Covid-19 safety costs, such as testing, PPE, reconfiguring, and technology. The credit is limited to $1,000 per employee for the first 500 employees, $750 per employee for the next 500 employees, and $500 for each employee thereafter.
For example, a retail store with 40 workers seeks to resume providing jobs and services to its community — the challenge is how to do so safely…
In order to reconfigure their store to help maintain social distancing, provide adequate sanitation stations, and implement other protocols to ensure their workers are safe at work, they spend $60,000. These dollars go toward PPE, screening/testing, disinfecting, and plexiglass shields. That company would receive a $30,000 tax credit against its federal payroll taxes. If that credit exceeds their payroll tax obligations, the company receives a refund from the Internal Revenue Service (IRS).
New Workplace Safety Screening Solution – coming soon!
We are delighted to inform you that the Walton team is collaborating with some of our partners to develop and launch new products geared to help businesses reopen safely and reduce the risks associated with exposure to the Coronavirus. Our solution will monitor temperatures and screen all employees daily prior to entry and deliver detailed contact-tracing intelligence to help companies track and minimize potential exposure risks. Stay tuned for more info…
What’s Next?
Negotiations will begin and continue through the first week of August, so we can expect to see a vote in the Senate by middle of August. As your trusted advisor, we will continue to keep you abreast of critical developments and changes as things progress.
New Covid-19 Vaccine Tax Credit for Select Employers
On Wednesday, April 21, 2021, President Joe Biden announced a refundable tax credit available for select businesses that pay employees that need to take time off to get vaccinated for Covid-19. This is part of the administration’s effort to involve employers to promote vaccination.
“Today we hit 200 million shots,” Biden said. “It’s an incredible achievement for the nation. I’m calling on every employer, large and small, in every state, to give employees the time off they need with pay to get vaccinated,”
said the President.
Here are the details of the new tax credit:
- The tax credit will apply to businesses with fewer than 500 employees.
- The tax credit amount equals up to two weeks (80 hours), limited up to $511 per day for each employee and $5,110 in the aggregate at 100% of the employee’s pay rate.
- Tax credit is available between April 1 and September 30, 2021.
- Tax credit is refundable, meaning the employer is entitled to payment of the full amount of the credit if the tax credit amount exceeds the employer’s share of the Medicare tax.
- Employers can claim the credit using IRS form 941 – Employer’s Quarterly Federal Tax Return.
This tax credit was authorized under The American Rescue Plan Act of 2021 (ARP) which was signed into law on March 11, 2021.
The Challenges of Managing a Remote Workforce
It’s hard to imagine that already a year has passed and the world is still dealing with a devastating pandemic. The disruptive effects the pandemic has had in the business world continues to take its course seemingly without end. One of the most impactful changes employers are facing is the future of the workplace as we know it, especially for businesses that have had to make the remote working experience a reality over the last year.
It used to be that working from home was not for everyone. However, despite the forced evolution, that remains the case. Nevertheless, even after the world recovers, we must all wonder about what the future of the workplace will look like. Much of the workforce has been forced to evolve rapidly and meet the moment by embracing a home-based work environment, full of its own set of challenges. Speaking of challenges, it’s also important to talk about the challenges (and opportunities) managers face when supervising remote employees. As if it isn’t enough to manage people altogether, now the remote work experience gets added to the fold for an even greater task.
To better explain the challenges, I’d like to share a true story that I recently learned about: An HR Representative from a global company gets a meeting request from [Bob] a manager she supports with a specific employee’s name in the subject line. Here’s a paraphrased script of their conversation:
HR Manager: Hi Bob, how can I help you?
Bob: Hi. It’s been weeks since I last heard from [Employee] Suzie. I’d like to solicit HR’s help at this point.
HR Manager: When was the last time you heard from her?
Bob: Oh, I can’t really remember… it’s been a few months. Unfortunately, I’ve been incredibly busy, but I’ve emailed Suzie several times and have not heard from her. I left her a voicemail message last week, but have not heard back. I am concerned.
HR Manager: Okay, here’s what I’d like to do. I’m going to overnight her a letter to check on her and inform her you have been trying to reach her and are concerned. I’ll ask her to contact us ASAP.
Several days later, the HR Rep and the employee finally connect and their interaction went something like this:
HR Manager: Hi Suzie. Is everything okay? Your manager has been trying to get a hold of you for the last few weeks and hasn’t heard from you, and we are concerned.
Suzie: Really? I left 4 months ago because I felt like the manager was disengaged. I figured someone would eventually reach out.
😀
This obviously is an extreme example, and we used a comic to add humor, but the reality is that this manager’s lack of engagement and oversight kept an employee who walked off the job on the company payroll, costing the company thousands of dollars in wages.
In conclusion, managing a remote workforce will be a new experience for many managers, but just as if they are managed onsite, a manager’s responsibility does not go away simply because the employee works from home. On the contrary, it is far more critical, especially when you consider other elements that may be competing for a remote employee’s attention and can negatively impact their work performance. Things such as sharing a home office with others, loud pets, crying kids, noisy neighborhoods, etc., all while trying to put on their best performance on video conferences throughout the day.
How is your company addressing this? Are you struggling to supervise your remote staff effectively?
There are several things that can and should be implemented to help managers address and overcome the challenges of supervising the fast-growing remote workforce, which include:
- Ask for help — Reach out to your own manager or HR. Share your challenges and ask for support or additional training.
- Establish structure and rules of engagement — Setup recurring 1:1 check-ins as frequently as needed and set expectations from the start. Make sure your employees know how to best reach you during the day.
- Provide multiple communication means — Email is simply not enough. Use the phone and video conference more so. These will allow you to get additional context to how you communicate (gestures, tone, body language) which are super useful to eliminate miscommunication and misunderstandings altogether.
- Provide opportunities for social interaction — Host trainings, feedback loops, virtual townhall meetings, and even happy hours. Promote activities that promote collaboration and avoid isolation.
- Offer encouragement and emotional support — Ask open-ended questions: How are you doing? What’s new? How can I help you? These provoke open dialogue to help you assess situations with your employees. Don’t be afraid to ask follow-up questions and be sure to read between the lines.
California Unveils New Hiring Credit Targeting Small Business
With millions of Californians out of work, on Wednesday, September 9, Gov. Gavin Newsom signed a law giving tax breaks to small businesses that hire employees over the next three months.
The incentive program will offer businesses of 100 employees or less a tax credit of $1,000 on their state tax bills for each new employee hired by December 1, 2020. The credit only applies to businesses that have lost at least 50% of their revenue from April to June 2020, compared to the same time period in 2019. The credit is capped at $100 million statewide, or $100,000 for each business. Businesses get the credit only if they hire employees; not contractors. Furthermore, small businesses that are owned by large companies are not eligible for the credit.
California’s economy has been devastated by the Coronavirus pandemic as the Newsom administration ordered many businesses to close for months to slow the spread of the virus. California lost 2.4 million jobs in April; more than all the jobs lost during the Great Recession a decade ago. The state has added back nearly a third of those jobs since then, but the unemployment rate is still 13.3% — higher than it ever got during the Great Recession. As of Tuesday, the state lists 33 of the state’s 58 counties as the most at risk for the Coronavirus, a designation that requires many businesses to halt indoor operations.
IRS Issues FAQs for Families First Coronavirus Response Act
On April 17, the Internal Revenue Service (IRS) posted new Frequently Asked Questions (FAQ) regarding COVID-19-related tax credits for required paid leave provided by small and midsize — sick leave and family leave.
General Summary:
The Families First Coronavirus Response Act (“FFCRA”) signed by President Trump on March 18, 2020, provides small and midsize employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick leave and family leave wages to their employees for leave related to COVID-19.
The FFCRA gives businesses with fewer than 500 employees (referred to throughout these FAQs as “Eligible Employers”) funds to provide employees with paid sick and family and medical leave for reasons related to COVID-19, either for the employee’s own health needs or to care for family members. Workers may receive up to 80 hours of paid sick leave for their own health needs or to care for others and up to an additional ten weeks of paid family leave to care for a child whose school or place of care is closed or child care provider is closed or unavailable due to COVID-19 precautions. The FFCRA covers the costs of this paid leave by providing small businesses with refundable tax credits. Certain self-employed individuals in similar circumstances are entitled to similar credits.
CARES Act – Signed into Law
CARES Act – Signed into Law
On Friday, March 27, President Donald Trump signed the “Coronavirus and Economic Security Act” (also known as the CARES Act) into law, after a voice-vote approval earlier that day by the U.S. House of Representatives and an unanimous vote by the U.S. Senate on Wednesday of last week. The CARES Act, estimated at $2.2T is the largest economic stimulus ever approved in the history of our country. The stimulus bill delivers extraordinary spending to confront the country’s disruption due to the COVID-19 pandemic, including cash payments to individual citizens, enhancements and expansions to unemployment benefits, a broad lending program for small businesses and targeted relief for hard-hit industries.
Here are some of the highlights:
Federal Loans and Grants for Businesses with Less Than 500 Employees
- available for employers that maintained their staff between February 15 and June 30, 2020.
- loan amount is 250% of average monthly payroll during that time frame, up to $10MM
Cash Assistance
- Individuals earning less than $75,000 per year will receive $1,200 plus $500 per child.
- Amount is prorated for individuals whose adjusted income in their most recent tax filing is over $75,000 and up to $99,000.
- Individuals whose adjusted gross income is over $99,000 are excluded.
Unemployment Benefits
- Individuals entitled to receive unemployment benefits would get an extra $600 per week for up to four months in addition to their state unemployment benefits, in an effort to make up for 100% of lost wages.
- It also expands the maximum time limit from 26 weeks to 39 weeks.
Loans to Select Industries ($500 billion)
- $58 billion in loans and grants for airlines
- reprieve on their three major excise taxes (ticket price, fuel, and cargo tax)
- $17 billion in loans and loan guarantees for businesses critical to maintaining national security
- $454 billion for loan and loan guarantees for eligible businesses, states, and municipalities
Financial Aid to Hospitals
- health care providers would receive grants for revenue lost by delaying elective surgeries and other procedures to focus on combatting the outbreak
- 20% increase in Medicare payments for treating patients with COVID-19
In addition, the CARES Act includes a host of other benefits and relief programs designed to help our schools, the agriculture industry, distilleries, food stamps, and child-nutrition programs, the postal service, and the cruise industry; to name a few.
As your trusted advisor, Walton is committed to staying on top of important developments and communicating important information that may impact the companies we serve as well as our business partners.
As always, don’t hesitate to contact us should you have any questions.
Update: Worker Paid Leave & COVID-19 Tax Credits for Select Employers
Paid Sick Leave for Workers
For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded paid child-care leave when employee’s children’s schools are closed or child-care providers are unavailable. The Act will help the United States combat the financial strain employers are incurring as a result of the COVID-19 pandemic.
American businesses with fewer than 500 employees will receive funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members. The legislation will enable employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public-health measures needed to combat the virus.
Key Takeaways
Paid Sick Leave for Workers
- For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded paid child-care leave when employee’s children’s schools are closed or child-care providers are not available.
Complete Coverage
- Health insurance costs are also included in the credit.
- Employers face no payroll tax liability.
- Self-employed individuals receive an equivalent tax credit.
- Employers receive 100% reimbursement for paid leave pursuant to the Act.
Fast Funds
- An immediate dollar-for-dollar tax offset against payroll taxes will be provided.
- Where a refund is owed, the Internal Revenue Service (IRS) will send the refund as quickly as possible.
- Reimbursement will be quick and easy to obtain.
Small Business Protection
- Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed or child care is unavailable in cases where the viability of the business is threatened.
Easing Compliance
- Requirements subject to 30-day non-enforcement period for good-faith compliance efforts.
To take advantage of the paid-leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek and expedited advance from the IRS by submitting a streamlined claim form that will be released later this week.
For more information
Visit Coronavirus Tax Relief for more information on these tax credits and COVID-19 relief.
As we continue to navigate through these challenging times, Walton is closely monitoring all developments associated with COVID-19 relief and keeping our clients and partners abreast of important updates, so be sure to stay tuned.
As always, should you have any questions, please feel free to contact us.
Families First Coronavirus Response Act — Signed into Law
H.R. 6201 — Enacted this Week
The “Families First Coronavirus Response Act” (H.R. 6201) was signed into law by President Donald Trump on March 18, 2020. The bill is intended to provide immediate relief to Americans financially impacted by the COVID-19 crisis.
Overview of Relief Bill
FMLA Expansion for COVID-19
The Act amends the FMLA to allow an employee who is unable to work (or telework) to take leave due to a need to care for the employee’s son or daughter (under 18 years of age) if the child’s elementary or secondary school or place of care has been closed, or the child-care provider is unavailable, due to a “public-health emergency.” A public-health emergency means an emergency with respect to COVID-19 declared by a federal, state, or local authority.
Unlike the original bill, the closure of the child’s school or child care facility is the only reason allowed under the added FMLA provisions, and the only reason allowed for paid leave under the FMLA.
Paid Sick Leave for COVID-19
The Act also adds a paid sick-leave obligation. Employers with fewer than 500 employees must immediately make available 80 hours of paid sick leave for full-time employees (or the equivalent of the average number of hours over two weeks for part-time employees) for the following reasons (which are slightly different than the original bill):
- The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19.
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
- The employee is experiencing symptoms of COVID-10 and seeking a medical diagnosis.
- The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2).
- The employee is caring for their son or daughter if the school or place of care of the son or daughter has been closed, or the child-care provider is unavailable due to COVID-19 precautions.
- The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretary of the Treasury and the Secretary of Labor.
Amount of Pay
Under the FMLA provisions, when leave is needed due to a school or day-care closure, the employer can provide the first 10 days of leave unpaid, then subsequent absences for this reason must be paid at 2/3 the employee’s regular rate of pay. The Act includes a cap of $200 per day and $10,000 in aggregate. If the first 10 days are unpaid, an employee may elect to substitute any accrued vacation leave, personal leave, or medical/sick leave for the unpaid leave.
Paid sick leave is paid at the employee’s regular rate for a use described in paragraph (1), (2), or (3); and 2/3 of an employee’s regular rate for a use described in paragraph (4), (5), or (6). Paid sick leave is also capped: $511 per day and $5,110 in the aggregate for a use described in paragraph (1), (2), or (3); and $200 per day and $2,000 in the aggregate for a use described in paragraph (4), (5), or (6).
Effective Date
Both the proposed FMLA changes and the proposed sick leave take effect no later than 15 days after enactment and would remain in place until the end of 2020.
For More Information:
Click on this link to view the entire bill.
Congress is working diligently on a third-phase relief. As we navigate through these challenging times, Walton continues to closely monitor legislative developments associated with COVID-19 relief and maintaining our clients and partners abreast of important updates.
As always, should you have any questions, please feel free to contact us.
Legislative Update: Congressional Action to Covid-19
H.R. 6201 — Expected soon
The COVID-19 crisis has sparked an unprecedented response and action from Congress, urging lawmakers to work together and act swiftly to respond to economic crises looming over the country. As a result, Congress is expected to enact H.R. 6201 “Families First Coronavirus Response Act” as early as this week. Things are moving fast in Congress. Yesterday, at a lunch event, Senate Majority Leader Mitch McConnell (AL-R) said, “The Senate will not leave town until we have passed another bill to address this emergency. Continue reading “Legislative Update: Congressional Action to Covid-19”