Windham Region Chamber of Commerce

COVID

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DID YOU KEEP ANY OF YOUR EMPLOYEES THROUGHOUT THE PANDEMIC? YOU NEED TO READ THIS!

We have been speaking to a lot of businesses in the past several months because there are so many new laws, because they can’t find good employees, etc.  BUT one thing we are finding that hardly anyone knows about (even though we have written stories on this) is the

EMPLOYEE RETENTION TAX CREDIT

Let us get your attention.  We worked with a business who was unaware of this tax credit and after filing they received a $150,000 refund from the government.  Another business received $50,000.  This is some SERIOUS money!  If you kept employees during the pandemic you need to ask your CPA or tax expert about this credit.  Or if you like reading government documents, you can read the bulletin from the IRS (there are support groups for this kind of desire)…… GO HERE.

The Employee Retention Credit is a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees.  This credit was extended so it is still in effect.

Eligible employers can now claim a refundable tax credit against the employer share of Social Security tax equal to 70% of the qualified wages they pay to employees after December 31, 2020, through June 30, 2021. Qualified wages are limited to $10,000 per employee per calendar quarter in 2021. Thus, the maximum ERC amount available is $7,000 per employee per calendar quarter, for a total of $14,000 in 2021.

Employers can access the ERC for the 1st and 2nd quarters of 2021 prior to filing their employment tax returns by reducing employment tax deposits. Small employers (i.e., employers with an average of 500 or fewer full-time employees in 2019) may request advance payment of the credit (subject to certain limits) on Form 7200, Advance of Employer Credits Due to Covid-19, after reducing deposits. In 2021, advances are not available for employers larger than this.

Effective January 1, 2021, employers are eligible if they operate a trade or business during January 1, 2021, through June 30, 2021, and experience either:

  1. A full or partial suspension of the operation of their trade or business during this period because of governmental orders limiting commerce, travel or group meetings due to COVID-19, or
  2. A decline in gross receipts in a calendar quarter in 2021 where the gross receipts of that calendar quarter are less than 80% of the gross receipts in the same calendar quarter in 2019 (to be eligible based on a decline in gross receipts in 2020 the gross receipts were required to be less than 50%).

Employers that did not exist in 2019 can use the corresponding quarter in 2020 to measure the decline in their gross receipts. In addition, for the first and second calendar quarters in 2021, employers may elect in a manner provided in future IRS guidance to measure the decline in their gross receipts using the immediately preceding calendar quarter (i.e., the fourth calendar quarter of 2020 and first calendar quarter of 2021, respectively) compared to the same calendar quarter in 2019.

In addition, effective January 1, 2021, the definition of qualified wages was changed to provide:

  • For an employer that averaged more than 500 full-time employees in 2019, qualified wages are generally those wages paid to employees that are not providing services because operations were fully or partially suspended or due to the decline in gross receipts.
  • For an employer that averaged 500 or fewer full-time employees in 2019, qualified wages are generally those wages paid to all employees during a period that operations were fully or partially suspended or during the quarter that the employer had a decline in gross receipts regardless of whether the employees are providing services.

Retroactive to the March 27, 2020, enactment of the CARES Act, the law now allows employers who received Paycheck Protection Program (PPP) loans to claim the ERC for qualified wages that are not treated as payroll costs in obtaining forgiveness of the PPP loan.

For more information, see COVID-19-Related Employee Retention Credits: How to Claim the Employee Retention Credit FAQs​​​​​​.

If you would like to speak to someone to explain how this works, you can contact Bill Correll at 860-428-9541 or bill@pds2k.com.

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WHAT IS INCLUDED IN THE AMERICAN RESCUE ACT

Every line item in the bill will need to be “carried out” by a federal agency.  When that happens we will be able to give you more specific information on how each item will “work” or be distributed.

Summary of American Rescue Act

• Direct checks of $1,400 for individuals earning up to $75,000 per year and couples earning up to $150,000 per year. The payments fully phase out for individuals making more than $80,000 per year and couples making more than $160,000 per year.

• $350 billion for states and localities.

• Extension of federal unemployment benefits, with $300 added to weekly jobless checks until Sept. 6.

• $10,200 tax exclusion for unemployment compensation for households earning less than $150,000 per year.  This means that if you received $10,200 in unemployment (or more) you will not need to claim this as income, which also means it is not considered income if you are purchasing health insurance on the State Health Insurance Exchange.

• More than $125 billion for K-12 schools.

• $86 billion rescue package for 185 multi-employer pension plans (most of these are union and industry pensions) that are close to insolvency and cover about 10.7  million workers.

• $60 billion for coronavirus testing and vaccine distribution and procurement.

• Extension of a 15% increase in SNAP benefits (food stamps) through September.

• More than $30 billion for transit agencies.

• $28.6 billion for restaurants through a new grant program.

• More than $21 billion in emergency rental assistance and more than $9 billion for mortgage and utility assistance.

• $15 billion for Economic Injury Disaster Loan (EIDL) grants for small businesses.

• $10 billion to expand domestic production of personal protective equipment, vaccines and medical supplies.

• Increase in the child tax credit from $2,000 to $3,000 and an increase to $3,600 for children under the age of 6.

• $39 billion for child care, including almost $24 billion for stabilization grants and nearly $15 billion for the child care and development block grant program.

• $35 billion for health insurance premium subsidies for people who buy health insurance on Obamacare exchanges. Waives the 400% federal poverty level cap on eligibility for the subsidies.

• $3.9 billion to increase availability of mental health and substance abuse treatment.

• $800 million to buy U.S.-grown food products for distribution to developing countries.

• $270 million for the National Endowment for the Arts and National Endowment for the Humanities.

• $200 million for libraries through the Institute of Museum and Library Services.

• $200 million for “worker protection enforcement activities” through the Department of Labor.

• $175 million for public broadcasting.

• $100 million for air quality and pollution mitigation efforts by the Environmental Protection Agency.

• $50 million for the U.S. Consumer Product Safety Commission to combat consumer-product-related injury or death.

• $30.4 million for Federal Trade Commission efforts to combat COVID-19-related scams.

 

More specific information on some of the summary items above:

Small Businesses:

  • Provides $7.25 billion for the Paycheck Protection Program (PPP) forgivable loans.
    • With about half of the $284 billion in current funding available, the American Rescue Plan Act appropriates just $7.25 billion in additional funding and does not extend the PPP’s current application period, which is scheduled to close March 31.
    • Makes more not-for-profits eligible for the PPP by creating a new category called “additional covered nonprofit entity,” which are those not-for-profits listed in Sec. 501(c) of the Internal Revenue Code other than 501(c)(3), 501(c)(4), 501(c)(6), or 501(c)(19) organizations, that can receive an initial PPP loan, provided that:
      • The organization does not receive more than 15% of receipts from lobbying activities.
      • The lobbying activities do not comprise more than 15% of activities.
      • The cost of lobbying activities of the organization did not exceed $1 million during the most recent tax year that ended prior to Feb. 15, 2020.
      • The organization employs not more than 300 employees.
  • Also made eligible for the PPP are some larger not-for-profits.
    • Larger 501(c)(3) organizations and veterans’ organizations that employ not more than 500 employees per physical location.
    • Larger 501(c)(6) organizations, domestic marketing organizations, and additional covered not-for-profit entities that employ not more than 300 employees per physical location.
  • $15 billion for targeted Economic Injury Disaster Loan (EIDL) advance payments.
    • Provides funds to businesses located in low-income communities that have no more than 300 employees and that have suffered an economic loss of more than 30%, as determined by the amount that the entity’s gross receipts declined during an eight-week period, between March 2, 2020 and Dec. 31, 2021, relative to a comparable eight-week period immediately preceding March 2, 2020.
    • Funds from Targeted EIDL Advances shall not be included in the gross income of the person who receives the grant and that no tax deductions will be denied, no tax attribute reduced, and no basis increase denied due to the exclusion of the grant funds from gross income.
    • $25 billion for restaurants, bars, and other eligible providers of food and drink.
      • Allows for grants equal to the pandemic-related revenue loss of the eligible entity, up to $10 million per entity, or $5 million per physical location. The grants are calculated by subtracting 2020 revenue from 2019 revenue. Entities are limited to 20 locations.
      • $1.25 billion for shuttered venue operators.
      • $175 million to create a “community navigator” pilot program to increase awareness of and participation in COVID-19 relief programs for business owners currently lacking access, with priority for businesses owned by socially and economically disadvantaged individuals, women, and veterans.

State and Local Municipal Aid:

  • Provides $350 billion to help states, counties, cities and tribal governments cover increased expenditures, replenish lost revenue and mitigate economic harm from the COVID-19 pandemic.
  • State and local government recipients could use the funds to cover costs incurred by Dec. 31, 2024. The funds would be distributed in two tranches, with 50% delivered no later than 60 days from the date of enactment, and the remainder delivered no earlier than one year later. States would have to distribute funds to smaller towns within 30 days of receiving a payment from the department. States that miss the deadline would have to pay back any undistributed funds. A town cannot receive more than 75% of its budget as of Jan. 27, 2020. The Treasury Department could also withhold up to half of a state or territory’s allocation for as long as 12 months based on its unemployment rate and require an updated certification of its funding needs.
  • Provides $195.3 billion to states and the District of Columbia:
    • $25.5 billion would be equally divided to provide each state a minimum of $500 million.
    • $169 billion would be allocated based on the states’ share of unemployed workers over a three-month period, from October-December 2020.
  • Provides $130.2 billion to Local Governments:
    • $65.1 billion for counties.
    • $45.6 billion for metropolitan cities.
    • $19.5 billion for towns with fewer than 50,000 people.
  • Provides $4.5 billion to U.S. territories.
  • Provides $20 billion to tribal governments.
  • Provides $10 billion for a Coronavirus Capital Projects Fund to carry out projects to support work, education and health monitoring during COVID-19.
  • Use of funds:
    • Respond to the COVID-19 emergency and address its economic effects, including through aid to households, small businesses, nonprofits, and industries such as tourism and hospitality.
    • Provide premium pay to essential employees or grants to their employers. Premium pay couldn’t exceed $13 per hour or $25,000 per worker.
    • Provide government services affected by a revenue reduction resulting from COVID-19.
    • Make investments in water, sewer and broadband infrastructure.
  • State and local governments cannot use the funds towards pensions or to offset revenue resulting from a tax cut enacted since March 3, 2021.
  • State and local governments could transfer funds to private nonprofit groups, public benefit corporations involved in passenger or cargo transportation, and special-purpose units of state or local governments.

Taxes:

  • Included in the Senate bill is an amendment that makes forgiven student loan debt tax-free, should Biden or Congress decide to cancel any debt.[75][76]
  • Reduction of reporting requirement (1099-K) for third party settlement organizations (e.g. PayPal) threshold from over $20,000 and 200 transactions to over $600 and no minimum number of transaction. This is expected to impact gig workers, independent contractors, casual eBay sellers, among others. This amendment is projected to generate $8.4 billion over the next decade
  • Earned Income Tax Credit: Raises the maximum Earned Income Tax Credit (EITC) for adults without children from $543 to $1,502. It would also lower the age eligibility for the childless EITC from 25 to 19 and eliminate the upper age limit, which currently bars the credit for childless people age 65 and older. Other changes include eliminating a rule that bars individuals who have children without Social Security numbers from claiming the childless EITC and allowing individuals who are separated from their spouses to claim the EITC on a separate return if they live with their child for more than half of the year.
  • Child Tax Credit: Increases the Child Tax Credit maximum amount to $3,000 per child and $3,600 for children under age 6. It would also extend the credit to 17-year-olds. The increase in the maximum amount would begin to phase out at $150,000 in income for married couples, $112,500 for heads of households and $75,000 for other parents. Other changes to the Child Tax Credit include making it fully refundable, meaning the entire credit could be provided as a refund if it exceeds an individual’s income tax liability, instead of partially refundable under current law.
  • Dependent Care: Temporarily increases the value of the child and dependent care tax credit, which currently covers 35% of care expenses up to $3,000 for one dependent or $6,000 for two or more dependents. The measure would make the credit refundable, increases the maximum allowable expenses to $8,000 for one dependent and $16,000 for two or more, and allows the credit to cover 50% of expenses.
  • Employee Retention Credit: Extends the employee retention credit established by the CARES Act through Dec. 31, 2021. The measure also would expand eligibility for the credit to new startups that were established after Feb. 15, 2020, and companies if their revenue declined by 90% compared to the same calendar quarter of the previous year. The credit would be capped at $50,000 per calendar quarter for startups.
  • Paid Leave Credits: Extends tax credits for employer-provided paid sick and family leave established under the Families First Coronavirus Response Act through Sept. 30, 2021. The measure would also increase the wages covered by the paid family leave credit to $12,000 per worker, from $10,000; cover as many as 60 days of paid family leave for self-employed individuals, instead of 50; and bar employers from receiving credits if their paid leave favors highly compensated employees, full-time workers, or employees based on tenure.
  • Makes state and local governments eligible for the FFCRA paid leave reimbursable tax credit.
  • Due to budget reconciliation rules the reimbursable tax credit will not be retroactive (for state and local governments) prior to FFCRA becoming law, and the effective date begins after March 31, 2021.

Education:

  • Provides $122.7 billion for the existing Elementary and Secondary School Emergency Relief Fund to remain available through Sept. 30, 2023.
    • States receive funds based n the same proportion that each state receives under the Elementary and Secondary Education Act (ESEA) Title-IA. State Education Agencies (SEAs) must distribute at least 90% of funds to local education agencies (LEAs) based on their proportional share of ESEA Title I-A funds.
    • The LEAs must reserve at least 20% of the funding they receive to address learning loss. Remaining funds are flexible and can address a variety of needs, including repairing ventilation systems, reducing class sizes and implementing social distancing guidelines, purchasing personal protective equipment, and hiring support staff to care for students’ health and well-being. School districts will be required to create and share plans publicly for returning to in-person instruction within 30 days.
    • The SEAs are also required to reserve their allocations to carry out activities: 5% to address learning loss, 1% for afterschool activities, and 1% for summer learning programs. Funds to the SEAs must be spent within one year of receipt.
  • Provides $3.03 billion in additional FY 21 funding for IDEA.
    • $2.58 billion for grants to states under Part B of IDEA.
    • $200 million for preschool grants under IDEA.
    • $250 million for programs for infants and toddlers under Part C of IDEA.
  • Provides $2.75 billion to governors through the existing Emergency Assistance to Non-Public Schools Program to provide services or assistance to non-public schools that enroll a significant percentage of low-income students and are most impacted by the qualifying emergency.
  • Provides $800 million to support the identification, enrollment, and school participation of children and youth experiencing homelessness, including through wrap-around services.
  • Provides $850 million for grants to Bureau of Indian Education-operated and funded elementary and secondary schools and Tribal Colleges or Universities.
  • Provides $40 billion through the existing Higher Education Emergency Relief (HEER) Fund.
    • $36 billion is allocated to public and private non-profit institutions to remain available through Sept. 30, 2023. Institutions must spend at least 50% of their allocation on emergency financial aid grants provided directly to students. Institutions can use remaining funds to replace lost revenue, reimburse for emergency expenses, and more. Funds are allocated as follows:
      • 37.5% based on full-time equivalent (FTE) enrollment of Federal Pell Grant recipients.
      • 37.5% based on headcount enrollment of Pell recipients.
      • 11.5% based on FTE enrollment of non-Pell recipients.
      • 11.5% based on headcount enrollment of non-Pell recipients.
      • 1% based on the relative share of FTE enrollment of students who were Federal Pell Grant recipients and who were exclusively enrolled in distance education courses prior to the qualifying emergency.
      • 1% based on the relative share of the total number of students who were Federal Pell grant recipients and who were exclusively enrolled in distance education courses prior to the qualifying emergency.
    • Provides $3 billion to historically Black colleges and universities, tribal colleges and minority-serving institutions.
    • Provides $400 million to for-profit colleges to provide financial aid grants to students.
    • Provides $200 million for institutions with the greatest unmet need related to the pandemic or those not served by the HEER formula.
  • Maintenance of Effort (MOE): States must maintain spending on both K-12 and higher education in FY 2022 and FY 2023 at least at the proportional levels relative to a state’s overall spending, averaged over FY 2018, FY 2019 and FY 2020. The MOE can be waived by the secretary of Education.
  • Maintenance of Equity: All provisions apply to FY 2022 and FY 2023.
    • State Maintenance of Equity:
      • States cannot cut per-pupil spending for “high-need” LEAs (group of LEAs that serve the highest percentages of low-income, which collectively serve at least 50% of state’s total student enrollment) at a rate steeper than overall cuts in per-pupil spending across all local education agencies.
      • States cannot fund “highest poverty” LEAs (group of LEAs that serve highest percentages of low-income students which collectively serve at least 20% of state’s total student enrollment) below their FY 2019 funding.
    • LEA Maintenance of Equity:
      • LEAs cannot cut per-pupil spending for any high-poverty school at a rate steeper than overall cuts in per-pupil spending across all schools served by the LEA.
      • LEAs cannot reduce per-pupil staffing for any high-poverty school at a rate steeper than overall cuts in per-pupil staffing across all schools served by the LEA.
      • The provision does not apply if an LEA serves less than 1,000 students or operates a single school or serves all students in single grade span in one school or is granted waiver by secretary of education.
  • Makes changes to the federal 90/10 rule, which prohibits for-profit colleges from receiving more than 90% of their revenue from federal aid programs. Regulations would not take effect until January 2023.
  • Treats any student loan forgiven or discharged on a tax-free basis from 2021 through 2026

Energy and Utility and Environment:

  • Provides $4.5 billion for the Low-Income Home Energy Assistance Program to assist eligible low-income households with heating and cooling energy costs.
  • Provides $500 million for the Low-Income Household Drinking Water and Wastewater Emergency Assistance Program created under the FY 2021 Omnibus to assist with payments for drinking water and wastewater expenses.
  • Provides $100 million for the Environmental Protection Agency to provide grants to address disproportionate environmental harms to minority and low-income populations, in addition to funding air quality monitoring grants under the Clean Air Act.
  • Provides $95 million to the Fish and Wildlife Service for wildlife inspections, care of captive endangered species, and research related to wildlife disease outbreaks.

Unemployment:

  • Extends the Pandemic Unemployment Assistance program through Sept. 6, 2021, while increasing the total number of weeks of benefits available to individuals who are not able to return to work from 50 to 79 weeks and provides guidance to states on coordinating with other unemployment benefits when needed.
  • Extends the CARES Act provisions that provided a 75% subsidy for costs incurred by employers who provide unemployment benefits on a reimbursable basis rather than via tax contributions through Sept. 6, 2021.
  • Extends the Federal Pandemic Unemployment Compensation (FPUC) through Sept. 6, 2021, while maintaining the FPUC benefit amount of $300.
  • Exempts the first $10,200 in 2020 unemployment benefits from federal income tax for households with incomes below $150,000 per year.
  • Restores full reimbursement for state costs related to waiving the waiting week beginning Dec. 31, 2020, and continues it through Sept. 6, 2021.
  • Extends temporary exceptions to state unemployment insurance staffing restrictions from the CARES Act through Sept. 6, 2021.
  • Increases the number of weeks of benefits an individual worker may receive in the Pandemic Emergency Unemployment Compensation (PEUC) program from 24 to 53 and extends the length of time in which workers can receive PEUC benefits if they exhaust regular state unemployment insurance benefits to last until Sept. 6, 2021.
  • Extends full federal financing of benefits provided in the Short-Time Compensation program for states that have laws establishing such programs through Sept. 6, 2021.
  • Ensures the earliest date on which states would begin accumulating interest of federal loans they have taken out to pay state unemployment benefits would be Sept. 6, 2021.
  • Extends the FFCRA provisions that provided temporary full federal financing of extended benefits (EB) through Sept. 6, 2021. States are traditionally required to pay 50% of the cost of the EB.
  • Appropriates $2 billion to the Department of Labor specifically to support program integrity and timely and equitable access to benefits. The secretary of Labor would be authorized to use the funds directly to develop system-wide program integrity solutions and address access barriers or processing backlogs, distribute funds to state and territorial unemployment insurance programs for these purposes, or make transfers to the Office of the Inspector General or the Department of Justice, or other agencies to support unemployment fraud investigations or prosecutions.

 

Housing:

  • Appropriates $27.4 billion in emergency rental assistance including:
    • $21.55 billion for emergency rental assistance via Corona Relief Fund (remains available through Sept. 30, 2027, if obligated by Oct. 1, 2022).
    • $5 billion for emergency housing vouchers (funds available through Sept. 30, 2030).
    • $750 million for tribal housing needs.
    • $100 million for rural housing.
  • Appropriates $305 million to Puerto Rico, the U.S. Virgin Islands, the Northern Mariana Islands and American Samoa for emergency rental assistance.
  • Appropriates $5 billion to assist people who are homeless with immediate and long-term assistance (emergency housing vouchers). Funds will remain available until September 20, 2030.
  • Provides $9.96 billion for a Homeowner Assistance Fund.
    • $100 million for housing counseling via NeighborWorks America (funding remains available through Sept. 30, 2022).
  • The first 40% of funding for the emergency rental assistance program will be provided within 60 days of enactment.
  • Appropriates $750 million for the Native American Housing Block Grants, Native Hawaiian Housing Block Grant and Indian Community Block Grant programs.
  • Not more than 15% of funds paid to state and local governments can be used for administrative costs.
  • Appropriates $39 million to assist rural homeowners through the USDA’s Section 502 and Section 504 direct loan programs.

COVID Related Funding:

Transportation provisions:

Transit/Infrastructure Funding:

  • Provides $30.5 billion for grants to transit agencies for use for operating expenses, including payroll and personal protective equipment costs.
    • $26.1 billion for Urbanized Area Formula Grants to aid transit service in urbanized areas.
    • $2.21 billion for urban and rural area grantees that require additional assistance due to the pandemic.
    • $1.7 billion for Capital Investment Grants.
    • $281 million in operating assistance formula grants for states to support rural transit agencies in areas with fewer than 50,000 people.
    • $100 million for intercity bus services to support essential connections in rural areas.
  • Aviation Funding:
    • Provides $8 billion for airports and airport concessions, with a caveat that those receiving funding must retain a minimum of 90% of personnel employed as of March 27, 2020, thru Sept. 30. However, the Department of Transportation can issue a waiver if the airport is experiencing significant economic hardship, or if the requirement has negative impacts on aviation safety or security. Of that amount:
      • $6.4 billion is distributed for costs related to operations, personnel, and combating the spread of COVID-19 at airport facilities.
      • $800 million for sponsors of primary airports ad concession relief.
      • $600 million to ensure all airports receive 100% federal cost-share for any airport improvement grant awarded to them in FY 2021.
      • $100 million to non-primary airports to aid in the costs related to the pandemic.
    • Provides $18 billion for aviation manufacturers and airlines.
      • $3 billion for airline manufacturers to create a payroll support program.
      • $14 billion to airlines to extend the payroll support program.
      • $1 billion for contractors to extend the payment of wages, salaries and benefits.
  • Railway Funding:
    • Provides $1.7 billion for Amtrak in FY 2021.
      • $970 million to support the Northeast Corridor.
      • $730 million to support the National Network, of which:
        • $175 million is to be used by Amtrak to offset amounts required to be paid by states for state-supported routes.
      • $166 million out of the amounts allocated for the Northeast Corridor, and the National Network, to support the restoration of long-distance service and employee recalls.

Agriculture:

    • $4 billion (39% of total agricultural expenditures) and $1 billion (9.7% of total agricultural expenditures) goes to debt forgiveness and outreach/support, respectively, for socially disadvantaged farmers.[86] Experts identified the relief bill as the most important legislation for African-American farmers since the Civil Rights Act of 1964, benefiting many who were not fully compensated by the Pigford settlements.[87]
    • $3.6 billion (35%) is dedicated to supporting the food supply chain, including purchasing food and agricultural commodities; making grants and loans for small to mid-size processors; seafood processing facilities; farmers markets, producers and other organizations responding to COVID; providing assistance to maintain and improve food and agricultural supply chain resiliency; and making payments for expenses related to crop losses pursuant to the Wildfire Hurricane Indemnity Program Plus.
    • $300 million is dedicated to the surveillance and monitoring of animals susceptible to COVID-19 transmission.
    • $100 million is dedicated to reducing the amount of overtime meat, poultry and egg inspection costs at small establishments.
    • $800 million (7.7% of total agricultural expenditures) for Food for Peace.[86] During fiscal year 2018, the Food for Peace program provided U.S. food-in-kind, procured local food supplies, provided food vouchers and made cash transfers to more than 76 million beneficiaries in 59 countries.
    • $500 million (4.8% of total agricultural expenditures) for USDA-administered Emergency Rural Development Grants for Rural Healthcare.[82][86]
    • Appropriates funds as may be necessary for loan modifications and payments to farmers and ranchers, who are members of groups that have been socially disadvantaged in the USDA programs. The department could pay as much as 120% of each such farmer’s or rancher’s debt on loans it made or guaranteed.

Technology and Cybersecurity:

  • Creates a $7.2 billion Emergency Connectivity Fund to reimburse schools and libraries for internet access and connected devices.
    • Includes wi-fi hotspots, modems, routers, devices that combine a modem and router, connected devices.
  • Provides $650 million for cybersecurity risk mitigation at the Cybersecurity and Infrastructure Security Agency, which is leading the federal response to the SolarWinds Corp. breach of government networks.
  • Provides $1 billion for the Technology Modernization Fund.
  • Provides $200 million for the U.S. Digital Service.
  • Provides $150 million to the National Institute of Standards and Technology to fund awards for research, development, and testbeds to prevent, prepare for, and respond to coronavirus.
  • Provides $175 million to the Corporation for Public Broadcasting to prevent, prepare for, and respond to coronavirus.
    • Includes fiscal stabilization grants to public telecommunications entities to maintain programming and services and preserve small and rural stations threatened by declines in non-federal revenues

Veterans:

  • Provides $14.4 billion for the Veterans Health Administration (VA) to provide healthcare services and related support to eligible veterans, which includes funding for sustainment of CARES Act-supported staffing and service-level expansions, inclusive of areas such as suicide prevention, women’s health, the VA homelessness programs and telehealth.
  • Includes $750 million for the VA to provide construction funds to states, provided they have required matching funds to projects that will upgrade and enhance safety and operation of state veterans’ homes.
  • Provides $250 million in one-time emergency federal payments to support these state-operated facilities, to be allocated based on the number of beds at each home that could be occupied by eligible veteran residents. This emergency funding can be used to enhance treatment of veterans during the pandemic, including by enhancing cleaning services, procuring personal protective equipment or other equipment, and temporarily expanding staffing levels to care for veterans.
  • Allocates $386 million for up to 12 months of retraining assistance for veterans who are unemployed due to COVID-19 and do not have other veteran education benefits. This funding covers the cost of the retraining program and provides a housing allowance for veterans while they undergo this training.

Consumer Protection:

  • Provides $50 million in funding for Consumer Product Safety Fund to protect consumers from potentially dangerous products related to Covid-19.
  • Enhance targeting, surveillance and screening of consumer products entering the United States at ports of entry.

FEMA and Homeland Security:

  • Appropriates $50 billion to the Disaster Relief Fund for COVID-19 and other disaster assistance under FEMA. The assistance is meant to bolster vaccine rollout efforts under FEMA and provide assistance to state and local governments at 100% federal cost share.
  • Directs the President to provide disaster-related funeral expenses to individuals and households at 100% federal cost share.
  • Provides $400 million to the Emergency Food and Shelter Program.
  • Provides $300 million for assistance to firefighter grants.
  • Provides $100 million via the Emergency Management Performance Grants to state and local emergency management agencies to help communities address COVID-19 and facilitate vaccine rollout.
  • $200 million to support COVID-19 infection control in skilled nursing facilities and $250 million for “strike teams” to assist skilled nursing facilities, funding will be provided until one year after the end of the public health emergency. Clarifies that secretary of health and human services (HHS) must require quality improvement organizations to provide support to skilled nursing facilities and add vaccination uptake support as a part of required activities.
  • In total, $92.2 billion allocated for various activities aimed at improving public health and responding to COVID-19.

Direct Payments to Households:

  • Provides another round of direct payments of $1,400 for individuals, $2,800 for joint filers, and $1,400 for each qualifying dependent.
  • Dependents would include full-time students younger than 24 and adult dependents.
  • The payments would begin to phase out for individuals with an adjusted gross income (AGI) of $75,000 ($150,000 for couples) and would be zero for AGIs of $80,000 ($160,000 for couples) or more. Heads of households will receive the full amount if they earned up to $112,500, and it will phase out completely at $120,000.
  • Payments would be based on 2019 or 2020 tax returns. The Treasury Department could provide payments to individuals who have not filed based on return information available to the department.

Additional Resources

  • Download the American Rescue Plan Act of 2021 NCSL Summary HERE.
  • State and Local Allocation Estimates from the American Rescue Plan Act of 2021 can be found HERE. (The new $2 billion Local Assistance and Tribal Consistency Fund is not included)
  • Federal Funds Information for States: Estimated Coronavirus State and Local Fiscal Recovery Funding can be found HERE.
  • Read the full text of the bill HERE.
  • The Title-By-Title Summary of the American Rescue Plan Act of 2021 can be found HERE. (Provided by Senate Democrats)

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NEW THIS YEAR EMPLOYER TAX CREDITS

The government has created two new employer tax credits to help you under the pandemic with the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

  • Sick and Family Leave Credit
  • Employee Retention Credit.

These tax credits can be very beneficial.  Our recommendation is that you ask your accountant about them and if you are eligible.  If you enjoy reading information from the IRS (there are support groups for this kind of desire) you can GO HERE to read all about it.  But generally, if you kept your employees on the payroll during the pandemic and/0r you gave some of them paid sick leave during the pandemic, you MAY be eligible.  Your accountant will be able to help with the specifics.

Here is  more information on this (especially if you can’t sleep at night) 🙂

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SUMMARY OF ALL NEW COVID RELATED RULES

VACCINATION SCHEDULE AND ELIGIBILITY

Those who are currently eligible to receive the vaccine under Connecticut’s COVID-19 vaccination program include all individuals over the age of 55, as well as all healthcare personnel, medical first responders, residents and staff of long-term care facilities, residents and staff of select congregate settings, and preK-12 school staff and professional childcare providers. Over the coming weeks, eligibility will expand based on age according to the following schedule:

  • March 22, 2021: Expands to ages 45 to 54
  • April 12, 2021: Expands to ages 35 to 44
  • May 3, 2021: Expands to ages 16 to 34

OPENING DAY OF FISHING WILL BE EARLY

Executive Order No. 10B enacts the early opening of 2021 fishing season.  Connecticut’s 2021 fishing season will open effective immediately, ahead of the scheduled date of April 10.  2021 Connecticut Fishing Guide

NEW REOPENING GUIDELINES

Protocols that will remain in effect until further notice include: 

  • Face coverings and masks continue to be required
  • Bars that only serve beverages continue to remain closed
  • 11PM closing time remains in place for events at venues, restaurants, and entertainment
  • Indoor theaters continue to have a 50% capacity
  • Large event venues (e.g. stadiums) to open in April

 Beginning Friday, March 19, 2021

 1.  All capacity limits will be eliminated for the following businesses, while face coverings, social distancing, and other cleaning and disinfecting protocols will continue to be required: 

  •  Restaurants (8-person table capacity and 11PM required closing time for dining rooms continues)
  •  Retail
  •  Libraries
  •  Personal services
  •  Indoor recreation (excludes theaters, which will continue to have a 50% capacity)
  •  Gyms/fitness centers
  •  Museums, aquariums, and zoos
  •  Offices
  •  Houses of worship

2.  Gathering sizes will be revised to the following amounts:

  • Social and recreational gatherings at private residence – 25 indoors/100 outdoors
  • Social and recreational gatherings at commercial venues – 100 indoors/200 outdoor

3.  All sports will be allowed to practice and compete, and all sports tournaments will be allowed, subject to Department of Public Health guidance

4.  Connecticut’s travel advisory will be modified from a requirement to recommended guidance

Beginning Monday, March 29, 2021

Capacity limits on early childhood classes will increase from 16 to 20

Beginning Friday, April 2, 2021

  • Outdoor amusement parks can open
  • Outdoor event venues can increase to a 50% capacity, capped at 10,000 people
  • Indoor stadiums can open at 10% capacity
  • Summer camps and summer festivals are advised to begin the planning stages to open for the upcoming season

EXECUTIVE ORDERS AND EMERGENCY POWERS

Governor Lamont’s emergency powers are set to expire April 20 and he does not believe he will extend it.  Regulations moving forward will go thru the legislative process.

SURVEY RESULTS ON WHETHER EMPLOYERS ARE MANDATING VACCINATIONS

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BIG NEWS FOR SOLE PROPRIETORS!! PPP CHANGES YOU NEED TO KNOW!

DID YOU ATTEMPT TO APPLY FOR PPP ONLY TO FIND OUT YOUR LOAN/GRANT WAS REALLY SMALL?  NOT WORTH THE EFFORT?  THE RULES HAVE CHANGED THIS TIME AROUND.  PLEASE READ THIS!!

Many of you small business owners, sole-proprietors, gig performers, 1099 independent contractors filed for (and tried to file for) the PPP loan/grant this spring only to find out that you were not going to get much money or no money at all.  Many of us who advocated for you this past year—telling legislators how negatively you were affected by the pandemic and the lack of funding in the PPP, were listened to.  This second round of PPP has a new way for you to calculate your income and thus the amount of your PPP.

Under the old rule your income listed on line 31 of our Schedule C determined your loan amount.  This was your NET profit.  This amount was small for many of you who itemize.  The new rule (if you file a Form 1040) allows you to use your GROSS income to calculate your loan amount.  This is your income before any deductions which is line 7 on Schedule C.  Language is below.

The interim final rule also allows individuals who have felonies (non-financial fraud) in the last year or those delinquent or in default of their Federal student loans to apply.

“A Schedule C filer may elect to calculate the owner compensation share of its payroll costs—that is, the share of its payroll costs that represents compensation of the owner—based on either (i) net profit or (ii) gross income, as calculated under the rule below.  Gross income is the amount the borrower reports on line 7 of Schedule C. If a Schedule C filer has no employees, the borrower may elect simply to calculate its loan amount based on either net profit or gross income. If a Schedule C filer has employees, the borrower may elect to calculate the owner compensation share of its payroll costs based on either (i) net profit or (ii) gross income minus expenses reported on lines 14 (employee benefit programs), 19 (pension and profit-sharing plans), and 26 (wages (less employment credits)) of IRS Form 1040, Schedule C.  For a Schedule C filer without employees, owner compensation is the only component of the borrower’s payroll costs. For a Schedule C filer with employees, owner compensation is added to employee payroll costs to determine the borrower’s total payroll costs.
Expenses reported on lines 14, 19, and 26 of the IRS Form 1040, Schedule C represent employee payroll costs and are subtracted from the owner compensation share of payroll costs if the owner uses gross income to calculate its loan amount in order to avoid double-counting these costs.”

To view the new Interim Final Rule, click here.

To view the updated First Draw application, click here.

To view the updated Second Draw application, click here.

Click the links below for more information about the latest updates to the Paycheck Protection Program.

 

 

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SBA MAKES CHANGES TO PPP TO HELP SUPER SMALL BUSINESSES

The SBA will be limiting PPP applications for a two-week window beginning Wednesday, February 24, 2021, exclusively to those PPP applicants with fewer than 20 employees. Those larger employee applicants interested in submitting a PPP application will have to do so by today or wait until mid-March to have their applications processed. This is an effort to provide more equitable access to federal funds for smaller businesses and entrepreneurs.
SBA also announced four additional changes to open the PPP to more underserved small businesses than ever before. While these changes are being implemented, SBA will work with community partners to improve the emergency relief “digital front door” and conduct extensive stakeholder outreach. And, SBA will strengthen its relationships with lender partners to advance equity goals, deliver funding efficiently, and prevent fraud, waste, and abuse. SBA will:
  • Allow sole proprietors, independent contractors, and self-employed individuals to receive more financial support by revising the PPP’s funding formula for these categories of applicants;
  • Eliminate an exclusionary restriction on PPP access for small business owners with prior non-fraud felony convictions, consistent with a bipartisan congressional proposal;
  • Eliminate PPP access restrictions on small business owners who have struggled to make student loan payments by eliminating student loan debt delinquency as a disqualifier to participating in the PPP; and
  • Ensure access for non-citizen small business owners who are lawful U.S. residents by clarifying that they may use Individual Taxpayer Identification Number (ITIN) to apply for the PPP.