Tax and Financial Planning in the Time of COVID-19 Presented by Moss Adams - Dan Cheyney, Sarah McKnight and Kelsey Sjoberg Fisher Phillips – Samantha Monsees and Karl Lindegren The material appearing in this presentation is for informational purposes only and should not be construed as advice of any kind, including, without limitation, legal, accounting, or investment advice. This information is not intended to create, and receipt does not constitute, a legal relationship, including, but not limited to, an accountant-client relationship. Although this information may have been prepared by professionals, it should not be used as a substitute for professional services. If legal, accounting, investment, or other professional advice is required, the services of a professional should be sought. Assurance, tax, and consulting offered through Moss Adams LLP. Investment advisory services offered through Moss Adams Wealth Advisors LLC. Investment banking offered through Moss Adams Capital LLC.
Presenters Dan Cheyney, CPA Sarah McKnight, CPA Kelsey Sjoberg, CPA Partner, National Practice Leader Tax Senior Manager Tax Senior Manager Sam antha Monsees Karl Lindegren Attorney - Associate Attorney - Partner 2
Objectives Families First Coronavirus Response Act (FFCRA) Paycheck Protection Program Employee Retention Credit Delay of Payment of Employer Payroll Taxes Overview of tax provisions in the CARES Act SBA Economic Injury Disaster Loans Review of compliance filing changes Key takeaways 3
Summary of new payroll provisions Provision What is it? Employee count provisions Potential Benefit The Families First Coronavirus Requirement to provide paid Sick (2 Required for employers with less than 100% payroll tax credit for wages paid Response Act: weeks at max $511 or $200/day) or 500 employees on the date of leave. Family Medical Leave (12 weeks of Common control of multiple entities Expansion of Paid Family & 10 weeks total at max $200/day) may apply. Medical Leave Act and Sick Leave CARES Act: Loan for 2.5 times your monthly Less than 500 employees, or a Loan forgiven for payments made on payroll expense to pay: payroll, franchise listed on SBA franchisee qualifying expenses and for keeping Paycheck Protection benefits, rent, utilities, mortgage list. or rehiring employees Program (SBA loan with interest. Max rate of 4% potential forgiveness) Cannot be used to pay for wages for which a credit is allowed under FFCRA. 4 ** Details on this slide are for comparison purposes only. Please consult your advisors for your specific circumstances.
Summary of new payroll provision continued Provision What is it? Employee count provisions Potential Benefit CARES Act: Employment tax credit for businesses - If over 100 employees: wages Employment tax credit of 50% of fully or partially suspended during must be for NOT working wages up to $10,000 of wages per Employee retention credit calendar quarter due to orders from - If under 100 employees any employee/ per quarter an appropriate government authority wages OR Common control rules apply for Reduced by credits allowed under A business experiencing a significant employee count FFCRA and not eligible if loan taken decline in Gross Receipts, 50% or under the Paycheck Protection less than PY same quarter Program Delay of payment of payroll taxes due 50% payable by December 31, 2021 CARES Act: Delay of payment from March 27, 2020 to December and remaining 50% by December 31, of employer payroll taxes 31, 2020 2022 Not available if have loan forgiveness under Paycheck Protection Program 5 ** Details on this slide are for comparison purposes only. Please consult your advisors for your specific circumstances.
Families First Coronavirus Response Act (FFCRA) 6
H OW THE F AMILIES F IRST C ORONAVIRUS R ESPONSE A CT I MPACTS YOUR O RGANIZATION Presented by: Samantha Monsees, Kansas City Karl Lindegren, Irvine March 30, 2020 fisherphillips.com
FAMILIES FIRST CORONAVIRUS RESPONSE ACT OVERVIEW Law signed 3/18/2020. • DOL has started issuing guidance, some of which clarifies gray areas and other • aspects of which are very different than what was first believed. Keep up to date! Leave Provisions Go Into Effect 15 Days After Enactment (DOL Says April 1) • Leave Provisions are temporary (Sunsets 12/31/2020). • Paid and Unpaid Leave for Coronavirus-Related Reasons • Emergency Paid Sick Leave • Emergency Family and Medical Leave Act (Expands FMLA) • Reimbursement to Employers as Tax Credits • fisherphillips.com ON THE FRONT LINES OF WORKPLACE LAW TM
EMERGENCY PAID SICK LEAVE fisherphillips.com ON THE FRONT LINES OF WORKPLACE LAW TM
EMERGENCY PAID SICK LEAVE Qualifying Employers/Employees • Employers with 1-499 employees • Any employee who works for employer is eligible • No minimum days/hours of employment fisherphillips.com ON THE FRONT LINES OF WORKPLACE LAW TM
EMERGENCY PAID SICK LEAVE Qualifying Reasons Must provide paid sick time “to the extent the employee is unable to work (or telework) due to a need for leave because: (1) The employee is subject to a federal, state or local quarantine or isolation order related to COVID-19. (2) The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19. (3) The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis. (4) The employee is caring for an individual who is subject to an order or self-quarantine as described above. (5) The employee is caring for a son or daughter if school or child care is closed/unavailable. (6) The employee is experiencing “any other substantially similar condition” specified by HHS (catch all). fisherphillips.com ON THE FRONT LINES OF WORKPLACE LAW TM
EMERGENCY PAID SICK LEAVE Employee Wages If the EMPLOYEE is sick, employee is entitled to: • Full-time Employees – 80 hours of paid sick leave • Part-time Employees – 40 hours • Pay is based on the employee’s average number of work hours in a two-week period. If employed for less than 6 months, the average number of hours per week the employee would normally be scheduled • Rate of Pay – employee’s regular rate, federal or local minimum wage • Whatever is HIGHER fisherphillips.com ON THE FRONT LINES OF WORKPLACE LAW TM
EMERGENCY PAID SICK LEAVE Employee Wages If the Employee needs leave for a reason related to OTHERS: employee is entitled to: • Full-time Employees – 80 hours of paid sick leave • Part-time Employees – 40 hours • Pay is based on the employee’s average number of work hours in a two-week period. If employed for less than 6 months, the average number of hours per week the employee would normally be scheduled • Rate of Pay – 2/3 the Employee’s regular rate, federal or local minimum wage Whatever is HIGHER • fisherphillips.com ON THE FRONT LINES OF WORKPLACE LAW TM
EMERGENCY PAID SICK LEAVE Qualifying Reasons Must provide paid sick time “to the extent the employee is unable to work (or telework) due to a need for leave because: (1) The employee is subject to a federal, state or local quarantine or isolation order related to COVID-19. FULL RATE OF PAY (2) The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19. FULL RATE OF PAY (3) The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis. FULL RATE OF PAY (4) The employee is caring for an individual who is subject to an order or self-quarantine as described above. 2/3 RATE OF PAY (5) The employee is caring for a son or daughter if school or child care is closed/unavailable. 2/3 RATE OF PAY (6) The employee is experiencing “any other substantially similar condition” specified by HHS (catch all) 2/3 RATE OF PAY fisherphillips.com ON THE FRONT LINES OF WORKPLACE LAW TM
EMERGENCY PAID SICK LEAVE Employee Wages Capped at the following levels: FULL RATE OF PAY • Capped at $511 per day and $5,110 in the aggregate per person for qualifying reasons • (1), (2) and (3). 2/3 RATE OF PAY • Capped at $200 per day and $2,000 in the aggregate per person for qualifying reasons • (4), (5) and (6). You may permit employees to us other accrued time off to supplement remaining 1/3 of • pay fisherphillips.com ON THE FRONT LINES OF WORKPLACE LAW TM
EMERGENCY PAID SICK LEAVE Exemptions Exemption • An employer of an employee who is a health care provider or an emergency • responder may elect to exclude such employee from the application of this section. Secretary of Labor has the authority for good cause to issue regulations: • T o exclude certain health care providers and emergency responders from the • definition of “eligible employee” T o exempt small businesses with fewer than 50 employees from leave to care for a • son or daughter if school or child care is closed/unavailable when the imposition of such requirement would jeopardize the viability of the business as a going concern “As necessary” (catch-all) • fisherphillips.com ON THE FRONT LINES OF WORKPLACE LAW TM
EMERGENCY PAID SICK LEAVE Additional General Rules • Sick leave does not carry over • Employer may not require employee as a condition of paid leave to find a replacement to cover scheduled hours • Employer may not require employee to use other paid leave provided by the employer before using this paid sick leave – employee can choose fisherphillips.com ON THE FRONT LINES OF WORKPLACE LAW TM
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