There has been an unprecedented amount of information and updates coming at all of us over the last few weeks about the Corona Virus (COVID-19) and the economic stimulus package signed into law just last Friday. Here is what we know summarized.
Now that legislation has been signed and we see movement from the governmental authorities, we can now help provide some clarity on how Columbia EDP is prepared to help you move forward...so let's dig in!
(this is specific to Missouri at this point, if you need assistance with information about your specific states please contact us and we will get you the information you need)
Your primary resource for COVID-19 Unemployment resources will be https://labor.mo.gov/coronavirus. But here are some options and how we can help:
- Individual employees that you have had to layoff because of the Corona Virus Pandemic can apply on their own at https://labor.mo.gov/coronavirus.
The Missouri Department of Labor made a calculator for unemployment benefits that an individual may be eligible for here - https://labor.mo.gov/DES/claims/calculator
- You can submit a Mass Unemployment Claim for your employees.
There are two options when it comes to submitting the Mass Claims:
- You can submit the claim yourself on behalf of your employees. We've included a link to a Adobe Acrobat file that will gives you instructions on how to create an account, how to create the file to upload, and information to give to your employees. (click here for the instructions).
- As an additional service, EDP can submit those Mass Claims for you. You will still need to verify the information that will be contained in the file for upload but we will upload it for you to submit the claims.
Payroll Tax Deferrals
Your primary resource right now for this is https://gop-waysandmeans.house.gov/the-senate-cares-bill-tax/. Unfortunately the IRS does not have anything posted as of the morning of April 1st, 2020.
The Cares Act Section 2302 allows you to delay the timing of required federal tax deposits for certain employer payroll taxes incurred between March 27, 2020 and December 21, 2020. Amounts will be considered timely paid back if 50% of the deferred amount is paid by December 31, 2021 and the remainder by December 31, 2022.
There is no dollar cap on the wages that are counted in calculating the taxes that may be deferred. The Payroll tax deferral only applies towards the employer’s portion of the Social Security tax (OASDI).
The payroll deferral is not available to a taxpayer that obtains a Small Business Act Loan under the Paycheck Protection Program established by the CARES Act if the loan is later forgiven.
How EDP can help you - We are currently waiting for more information from the IRS on how the tax deferral will be implemented so that we are following the guidelines that will be put in place by the IRS. Once we have our software updated with the new guidelines, we will be able to offer you this service.
For more information please contact our Tax Manager, Jim Claus (Jclaus@columbiaedp.com)
Families First Coronavirus Response Act (FFCRA)
The Families First Coronavirus Response Act (FFCRA or Act) requires certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. The Department of Labor’s (Department) Wage and Hour Division (WHD) administers and enforces the new law’s paid leave requirements. These provisions will apply from the effective date through December 31, 2020.
There are very defined guidelines on how the FFCRA is applied. To review all various pieces and parts of the FFCRA please visit the Department of Labor website here https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave to determine how to proceed.
How EDP can help you - When you have staff who are eligible under the FFCRA you will need to have the time tracked to receive reimbursement from the federal government. We have E/D codes specific to the FFCRA tracking that we can setup and apply for you and your staff that will take into account the tracking and reporting requirements.
Eligible employers who pay qualifying sick or childcare leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and childcare 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 childcare 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.
The IRS provided the following examples of how the retention of payroll taxes will work:
If 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.
If 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.
For more information on setting up the E/D codes to track the paid sick leave contact Dawn Ianke (Dawn@columbiaedp.com)
For more information about the tax credit please contact Jim Claus (JClaus@columbiaedp.com)
Small Business Administration Economic Disaster Loans
The SBA is providing Economic Disaster Loans for Small Businesses as part of the economic stimulus package. For information directly from the SBA please visit them there here https://www.sba.gov/page/disaster-loan-applications
How can EDP help you – We are ready and able to provide you with the reports you will need to provide to your SBA lending institution, we would ask that you contact your SBA lending institution first however. Through experience we have found that if you have talked with your bank first, they will give you a list of required reports they need.
Here is a tentative list of reports that are initially being requested by banks that we are able to provide for you:
- IRS Form 940 and 941
- Payroll Summary (Payroll Register) Report
- Breakdown of payroll benefits (vacation, allowance for dismissal, group healthcare benefits, retirement benefits, etc.)
- 401K Report
We will be waiving all fees associated with recreating these reports for you for the month of April 2020. We want you to see success as soon as possible with as few hindrances as possible! If you have a more in-depth report that needs to be developed please let us know, we would love to discuss the details with you.
To get these reports sent to you please contact our Tax Manager, Jim Claus, at Jclaus@columbiaedp.com.
As always, we appreciate the trust you place in us as your Payroll Service Provider and we are honored to support you each and every day!