Windham Region Chamber of Commerce

DianeN

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DO YOU HAVE TO PAY SICK TIME FOR COVID RELATED ABSENCES?

The Families First Coronavirus Response Act that provided paid leave for many COVID impacted workers—and federal funding to reimburse employers for the costs of paid leave since April 1, 2020—is set to expire Dec. 31, 2020.
The CARES II bill just approved does provide for employer reimbursements but it no longer mandates that employers provide it to their workers. But don’t make any decisions yet, there is still time for legislators to “clarify the language”.
Attorney Jeff Nowak, of the labor and employment firm Littler Mendelson, writes that the stimulus package contains these key elements:
  • Mandated FFCRA leave ends on Dec. 31, 2020
  • As of Jan. 1, 2021, covered employers may voluntarily provide emergency paid sick leave or emergency paid FMLA leave under FFCRA and take the tax credit associated with this leave
  • The tax credit may only be taken for leave through March 31, 2021
In other words, FFCRA leave is no longer required.

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PPP LOANS SECOND ROUND NOW OPEN

APPLICATIONS OPEN JAN 15

Washington passed the COVID Relief Bill and one of the programs was a second round of the PPP (Payroll Protection Program). You can begin to apply tomorrow, January 15. Here is what you need to know…

When can I apply?

1. As you know, you must apply for the program through a financial lending institution. These can be banks, credit unions and several other lenders like Square.
2. If your lender is a large bank, over $1 billion in assets, you can apply through them tomorrow, Jan 15.
3. If your lender is smaller, you can apply through them starting Jan 19.
4. If you need to know the size of your lender you can go HERE to find out.
5. You must apply no later than March 31, 2021.

Who can apply?

1. If this is your first PPP loan (first draw) you cannot have received a PPP loan prior to Aug 8, 2020.
2. businesses
3. sole proprietors, self-employed, independent contractors, gig performers
4. 501c3, 501c6, 501c19, tribal organizations
5. housing coops, destination marketing organizations, news organizations

What’s different than the first time?

1. You can choose your “covered period” which is any 8-24 weeks once you are approved and receive your loan disbursement.
2. You will NOT have your EIDL grant deducted from your loan forgiveness. **
3. If you are applying for an amount less than $150k you will file for your loan forgiveness on a simplified form.

If I applied before can I apply again?

Yes.  You would be a “Second Draw”.  You must have used the funds from your first PPP before applying.  There are some exceptions so contact your accountant.

Special Applicants:
SBA will assist eligible borrowers in underserved and disadvantaged communities. At least $15 billion is being set aside for First Draw PPP loans to eligible borrowers with a maximum of 10 employees or for loans of $250,000 or less to eligible borrowers in low- or moderate-income neighborhoods.

FIRST DRAW LOANS:
What can I use the money for?
Payroll costs, including benefits, mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.

How do I get full forgiveness?
If during the 8- to 24-week covered period following loan disbursement:

  1. Employee and compensation levels are maintained;
  2. The loan proceeds are spent on payroll costs and other eligible expenses;
  3. At least 60 percent of the proceeds are spent on payroll costs

How do I figure out the loan amount?
Basically you are applying for 2 1/2 months of your payroll expenses…..
A. self-employed and have no employees:
(and your principal place of residence is in the United States, including if you are an independent contractor or operate a sole proprietorship-but not if you are a partner in a partnership)

  1. Find your 2019 IRS Form 1040 Schedule C line 31 net profit amount (if you have not yet filed a 2019 return, fill it out and compute the value). If this amount is over $100,000, reduce it to $100,000. If this amount is zero or less, you are not eligible for a PPP loan.
  2. Calculate the average monthly net profit amount (divide the amount from Step 1 by 12).
  3. Multiply the average monthly net profit amount from Step 2 by 2.5.

B. Business/non-profit with employees:

Compute 2019 payroll costs by adding the following:

  1. 2019 gross wages and tips paid to your employees whose principal place of residence is in the United States, which can be computed using 2019 IRS Form 941 Taxable Medicare wages & tips (line 5c-column 1) from each quarter plus any pre-tax employee contributions for health insurance or other fringe benefits excluded from Taxable Medicare wages & tips, subtracting any amounts paid to any individual employee in excess of $100,000 and any amounts paid to any employee whose principal place of residence is outside the U.S
  2. 2019 employer health insurance contributions (portion of IRS Form 990 Part IX line 9 attributable to health insurance);
  3. 2019 employer retirement contributions (IRS Form 990 Part IX line 8); and
  4. 2019 employer state and local taxes assessed on employee compensation, primarily state unemployment insurance tax (from state quarterly wage reporting forms).
  5. Calculate the average monthly payroll costs (divide the amount from Step 1 by 12).
  6. Multiply the average monthly payroll costs from Step 2 by 2.5.

C. Self-Employed with employees:

  1. Basically you are going to do both of the above. Figure your payroll like “A” and figure your employees payroll like “B”.
  2. After adding them together, divide by 12 for average monthly payroll costs.
  3. Multiply that number by 2.5.

WE WILL BE HOSTING SEVERAL WEBINARS ON HOW TO APPLY AND HOW TO GET YOUR LOAN FORGIVEN.
Please join us or find our videos on our You Tube channel. If you have questions are have a specific situation we– recommend you discuss this with your accountant. You can also call us at 860-428-7739 or EMAIL us. Our Business Resource Center partner, SBDC can also help you free of charge. Please contact Greg Lewis.

APPLICATION FORM

FIRST DRAW INFORMATION

SECOND DRAW INFORMATION

HOW TO CALCULATE LOAN AMOUNT

SBA GENERAL INFO ON PPP

CTSBDC GENERAL INFO ON PPP

LIST OF LENDERS UPDATE JAN 14, 2021

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US DOL FINAL RULE ON EMPLOYEE TIPS

The US Department of Labor has ruled the following:

Employers cannot keep tips their employees receive, nor can they allow managers or supervisors to keep any portion of those tips.

The agency issued a final rule that addressed changes made to the Fair Labor Standards Act by the Consolidated Appropriations Act of 2018.

It said:  prohibits employers or managers from keeping any part of employees’ tips, regardless of whether the employer takes a credit for tips earned by workers toward its minimum wage obligation to those employees under the FLSA.

“This final rule provides clarity and flexibility for employers and could increase pay for back-of-the house workers, like cooks and dishwashers, who have been excluded from participating in tip pools in the past,” Wage and Hour administrator Cheryl Stanton said in a statement.

“Newly allowed tip sharing may incentivize the inclusion of these previously excluded workers and reduce wage disparities among all workers who contribute to customers’ experience.”

Clarification

By clarifying the rule, the department said it’s helping employers and workers throughout food service industries.

The agency said the final rule also largely codifies its guidance on an employer’s ability to claim the tip credit when workers do tipped and non-tipped duties, clarifying when employers can continue to claim the tip credit while the employee performs duties that do not generate tips.

The guidance clarifies which non-tipped duties are considered related to a tip-producing occupation.

The CAA did not impact established regulations that apply to employers who take a tip credit under the FLSA.

Tip Pools

An employer who claims a tip credit must ensure that a mandatory “traditional” tip pool includes only workers who customarily and regularly receive tips, meaning employees such as cooks or dishwashers aren’t included.

However, the CAA removed the regulatory restrictions on an employer’s ability to require tip pooling when it does not take a tip credit and instead pays tipped employees the full minimum wage in direct wages.

Those employers may now implement mandatory nontraditional tip pools, which can include employees such as cooks and dishwashers.

The final rule takes effect 60 days after publication in the Federal Register.

source:  CBIA

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NEW COVID ASSISTANCE APPROVED BY HOUSE & SENATE

Everyone wants to know what is in the new bill and how it will help their business.  As you know it is over 5000 pages long and includes everything including the kitchen sink.  But this is what we think is most important for you:

  • Extension of repayment and interest on deferred employee social security taxes.
  • Extension of the paid sick and family leave due to COVID until March 2021
  • PPP income will not be considered gross income for tax purposes
  • Certain emergency financial aid to college students will not be considered gross income
  • COVID loans forgiven, EIDL grants and some loan repayments will not be considered gross income
  • There is a second round of PPP:
    • includes 501c6 organizations
    • must have used the first PPP funds
    • under 300 employees
    • demonstrate a 25% reduction in gross receipts in the first, second or third quarter of 2020
    • cannot have received funding under Shuttered Venue Operator Grant program
    • seasonal employers eligible if operates no more than 7 months and earned no more than 1/3 its receipts in any 6 months
    • covered period extended to March 31, 2021
  • Changes to PPP forgiveness to include
    • allow payments for software, cloud computing, and other HR and accounting needs
    • property damage due to pubic disturbances not covered by insurance
    • supplier costs in effect before the loan essential to operations
    • PPP and adaptive investments to comply with COVID guidelines
    • covered period flexibility
    • simplified application for loans under $150,000
    • group insurance programs payments included as payroll costs
    • businesses not in operation prior to Feb 15, 2020 not eligible for round 1 or 2 of PPP
    • interest rates are non-compounding and non-adjustable
  • Creates Grants for Shuttered Venue Operators
    • $15 billion for live venue operators or promoters, theatres, live performances, museums, movies
    • have 25% reduction in revenues
    • $2 billion for entities with less than 50 employees
    • first round for those with 90% revenue loss, second round 70% revenue loss, then open to all others
    • used for payroll, rent, utilities and PPP
  • Extension of loan repayment of SBA loans
  • EIDL grants up to $10k in low-income communities
  • Extends EIDL grant application thru Dec 2021
  • No longer required the repayment of EIDL grants thru a PPP loan/forgiveness (including a refund if it was deducted)

Other parts of the bill include:

  • Enhanced jobless benefits of $300 per week for unemployed
  • Direct payments of up to $600 per adult and child
  • $25 billion for rental assistance and an eviction moratorium extension
  • $45 billion to support transportation services, including airports, Amtrak and airline employees

We will keep you up to date with other changes including sharing webinars explaining these new programs.

 

 

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EMERGENCY GRANTS FOR RESTAURANTS

Connecticut, thru DECD, is pushing through a new grant program to distribute $35 million in emergency funds to restaurants, bars and other small to mid-sized businesses in an attempt to help keep them in business until the federal COVID19 pandemic relief bill is in effect.

Businesses whose revenues are down by at least 20% will go into a pool, with grants then calculated by a formula based on tax and payroll data.  Grants will be between $10,000 and $30,000, with a goal of helping 2,000 businesses too big to qualify for the last round of Small Business Grants which provided $5,000 grants to 10,000 businesses with 20 or fewer employees. Both grants are funded with money from the CARES Act.  Connecticut hopes to issue these grants before the end of the year, with further details expected later this week.  At this time there is no application.  Businesses should be prepared to apply as soon as the application is available online.  We will keep you all posted.

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TOLLAND, WINDHAM COUNTIES ELIGIBLE FOR DISASTER LOANS-LIBRARIES & MUSEUMS

The U.S. Small Business Administration announced today that certain Private Non-Profit organizations (PNP)s in Connecticut that do not provide critical services of a governmental nature may be eligible to apply for low-interest disaster loans. These loans are available following a Presidential disaster declaration for Public Assistance resulting from damages caused by Tropical Storm Isaias on Aug. 4, 2020.

PNPs located in Fairfield, Hartford, Litchfield, Middlesex, New Haven, New London, Tolland, Windham and the Mashantucket Pequot Indian Tribe and Mohegan Tribe of Indians in Connecticut are eligible to apply. Examples of eligible non-critical PNP organizations include, but are not limited to, food kitchens, homeless shelters, museums, libraries, community centers, schools and colleges.

PNP organizations may borrow up to $2 million to repair or replace damaged or destroyed real estate, machinery and equipment, inventory and other business assets. The interest rate is 2.75 percent with terms up to 30 years. Applicants may be eligible for a loan amount increase up to 20 percent of their physical damages, as verified by the SBA, for mitigation purposes. Eligible mitigation improvements may include a safe room or storm shelter, sump pump, French drain or retaining wall to help protect property and occupants from future damage caused by a similar disaster.

The SBA also offers Economic Injury Disaster Loans (EIDL) to help meet working capital needs, such as ongoing operating expenses to PNP organizations. EIDL assistance is available regardless of whether the organization suffered any physical property damage.

PNP organizations are urged to contact their county’s Emergency Manager for information about their organization. The information will be submitted to FEMA to determine eligibility for a Public Assistance grant or whether the PNP should be referred to SBA for disaster loan assistance.

Applicants may apply for declaration #16848 online using the Electronic Loan Application (ELA) via SBA’s secure website at DisasterLoanAssistance.sba.gov. Disaster loan information and application forms may also be obtained by calling the SBA’s Customer Service Center at 800-659-2955 (800-877-8339 for the deaf and hard-of-hearing) or sending an email to DisasterCustomerService@sba.gov. Loan applications can also be downloaded from sba.gov/disaster. Completed applications should be mailed to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.

The filing deadline to submit applications for physical property damage is March 15, 2021. The deadline to submit economic injury applications is Oct. 12, 2021.

FOR MORE INFORMATION GO TO SBA HERE