Federal Assistance Programs

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• Employee Retention Payroll Tax Credit: Creates a refundable payroll tax credit of up to $5,000 for each employee on the payroll when certain conditions are met. The entity had to be an ongoing concern at the beginning of 2020 and had seen a drop in revenue of at least 50 percent in the first quarter compared to the first quarter of 2019. The availability of the credit would continue each quarter until the organization’s revenue exceeds 80 percent of the same quarter in 2019. For tax-exempt organizations, the entity’s whole operations must be taken into account when determining the decline in revenues. Notably, employers receiving emergency SBA 7(a) loans would not be eligible for these credits. Section 230A deferment of payroll tax, to be spread over 2 years.
• A modification to net operating losses (NOL’s) so NOL’s from Fiscal 2018 through Fiscal 2020 can be carried back 5 years.
• An alternative minimum tax credit available as refundable credit through 2021, which can be claimed as a refund now.
• Allowable deductible interest expenses are increased from 30% to 50% for 2019 and 2020.

Please contact your accounted or payroll service for assistance with Tax Credits included in the CARES Act

The CARES ACT includes a new above-the-line deduction (universal or non-itemizer deduction that applies to all taxpayers) for total charitable contributions of up to $300. The incentive applies to contributions made in 2020 and would be claimed on tax forms next year. Section 2204. The bill also lifts the existing cap on annual contributions for those who itemize, raising it from 60 percent of adjusted gross income to 100 percent. For corporations, the bill raises the annual limit from 10 percent to 25 percent. Food donations from corporations would be available to 25 percent, up from the current 15 percent cap. Section 2205.a 

• The Centers for Disease Control has issued guidance for businesses and employees.
• The U.S. Department of Labor has developed some guidelines for how companies can prepare their workplace for COVID-19 (English guide, Spanish guide). In addition, the Occupational Safety and Health Administration (OSHA) has launched a COVID-19 website with information specifically for workers and employers. There is also information on issues relating to wages and hours worked under the Fair Labor Standards Act.
• The U.S. Department of Labor’s Wage and Hour Division (WHD) published guidance pursuant to the Families First Coronavirus Response Act (FFCRA) for employees and employers as well as a general FAQ sheet. Please find additional implementation guidance which includes two posters – one for federal workers and one for all other employees – that will fulfill notice requirements for employers obligated to inform employees about their rights under the new law. In addition, the Wage and Hour Division released a question and answer document about posting requirements, as well as a Field Assistance Bulletin describing WHD’s 30-day non-enforcement policy.