U.S.A. ECONOMIC & LABOR MEASURES (COVID-19)
To all our USA expat community, find below the economic measures approved by the US Treasury, Internal Revenue Service (IRS), and the U.S. Department of Labor (Labor):
The U.S. Small Business Administration is offering low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). Any such Economic Injury Disaster Loan assistance declaration issued by the SBA makes loans available statewide to small businesses and private, non-profit organizations to help alleviate economic injury caused by the Coronavirus (COVID-19). This will apply to current and future disaster assistance declarations related to Coronavirus. SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance and can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%. SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay. Florida is one of the states eligible for SBA disaster loans.
To apply online go to https://disasterloa.sba.gov/ela/
For questions, please contact the SBA disaster assistance customer service center at 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail firstname.lastname@example.org.
FLORIDA DISASTER LOAN
Gov. DeSantis announced a statewide loan program, the Florida Small Business Emergency Loan Program, to further mitigate the impact on small business. He specified that he was earmarking $50 million to the loan program in the short-term to assist businesses that have between two and 100 employees and which belong to industries most affected by coronavirus. The loans are for one year and do not come with interest payments or pre-payment penalties. https://floridadisasterloan.org/.
FLORIDA SMALL BUSINESS EMERGENCY BRIDGE LOAN PROGRAM
Be a for-profit, privately held small business that maintains a place of business in the state of Florida.
Be located in a designated disaster area. Eligible Florida counties per Executive Order 20-52 are: All counties statewide.
Be established prior to March 9, 2020, the date of the designated disaster.
Be able to demonstrate economic injury as a result of the designated disaster.
The need for the loan and use of proceeds must be directly related to the economic injury caused by the designated disaster.
Loans will be made to individuals who, individually or collectively, own at least 51% of the equity of the business.
A borrower will be required to sign an agreement that the proceeds of the loan will be used only for purposes of maintaining or restarting the business in the designated area. Use of proceeds to pay off debts already incurred for qualifying business maintenance or restart purposes may be authorized on a case-by-case basis.
A borrower will be required to certify that the proceeds of insurance claims, other loans applied for or to be applied for, or other financial assistance will be used to repay the loan.
Applications will be accepted by qualified Florida small businesses under this program through May 8, 2020, contingent on the availability of funds.
Required Information for Application
Government issued personal identification of all individual applicants (driver’s license, state or federal ID, or passport).
Federal Business tax returns for the last 2 completed years for all individual applicants, if available.
Employer tax documentation.
Personal tax returns for the last 2 completed years with attached Schedule C for all individual applicants, if available and where appropriate.
To apply online go to http://floridajobs.org/rebuildflorida/businessrecovery
REFUNDABLE PAYROLL TAX CREDITS
NEW REFUNDABLE PAYROLL TAX CREDITS
U.S. Treasury Department, Internal Revenue Service (IRS), and the U.S. Department of Labor (Labor) announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. Eligible employers are businesses and tax-exempt organizations with fewer than 500 employees that are required to provide emergency paid sick leave and emergency paid family and medical leave under the Act. Eligible employers will be able to claim these credits based on qualifying leave they provide between the effective date and December 31, 2020.
Equivalent credits are available to self-employed individuals based on similar circumstances.
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 employees' children's schools are closed or child care providers are unavailable. To take immediate 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 an expedited advance from the IRS by submitting a streamlined claim form that will be released next week.
Complete Coverage Employers receive 100% reimbursement for paid leave pursuant to the Act. Health insurance costs are also included in the credit. Employers face no payroll tax liability. Self-employed individuals receive an equivalent credit.
Fast Funds Reimbursement will be quick and easy to obtain. An immediate dollar-for-dollar tax offset against payroll taxes will be provided. Where a refund is owed, the IRS will send the refund as quickly as possible.
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.
Under guidance that will be released next week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS. The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.
If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced next week.
Example - an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.
An eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.
If you receive calls, emails, or other communications claiming to be from the Treasury Department and offering COVID-19 related grants or stimulus payments in exchange for personal financial information, or an advance fee, tax, or charge of any kind, including the purchase of gift cards, please do not respond. These are scams. Please contact the FBI at www.ic3.gov so that the scammers can be tracked and stopped.
Tax Day moved to July 15
The Treasury Department and Internal Revenue Service announced that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020. Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.
Money Market Mutual Fund Liquidity Facility (MMLF)
The Federal Reserve Board established this weekend the Money Market Liquidity Fund. The Department of the Treasury will provide $10 billion of credit protection from the Exchange Stabilization Fund to the Reserve Bank. The establishment of the MMLF will enhance the liquidity and smooth functioning of money market accounts to support the flow of credit to hard working Americans.
High Deductible Health Plans may pay for COVID-19 Testing: To facilitate the nation’s response to the 2019 Novel Coronavirus (COVID-19), an individual covered by the HDHP will not be disqualified from being an eligible individual under section 223(c)(1) who may make tax-favored contributions to a health savings account (HSA). This notice provides flexibility to HDHPs to provide health benefits for testing and treatment of COVID-19 without application of a deductible or cost sharing. Individuals participating in HDHPs or any other type of health plan should consult their particular health plan regarding the health benefits for testing and treatment of COVID-19 provided by the plan, including the potential application of any deductible or cost sharing.
W Legal Desk, Advocats legal TEAM.