The goal – urge small businesses to apply for government programs created to boost the economy and provide immediate relief for companies and employees.
1. Families First – The Families First Coronavirus Response Act (FFCRA)
allows employers to provide family leave or sick pay for their employees for Covid-19 related issues if the employee is:
• Ill with Covid-19
• Required to quarantine due to Covid-19
• Caring for someone with Covid-19 or for a child who can’t attend school or daycare due to mandated closures
The FFCRA provides a payroll tax credit for employers to offer two weeks of fully or partially paid sick leave depending on the circumstance. It also credits employers for offering ten additional weeks of paid extended family or medical leave at two-thirds the regular pay rate of an employee needing to care for a child with a closed school or daycare. The deadline is December 21, 2020.
2. Save Employees - The Employee Retention Credit is designed to encourage businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer if business has been hurt by COVID-19. The business would have been forced to close at some point and not have applied for PPP.
3. Save Taxes - The Employer FICA Tax
Deferral relief package allows businesses to defer their portion of Federal Insurance Contributions Act, or FICA, taxes for Social Security and Medicare.
Employers pay 6.2 percent of an employee’s check to Social Security and 1.45 percent to Medicare. Employers who choose to defer these taxes in 2020 are required to pay back half of the bill in early 2021 year and the remainder in 2022. This is good for businesses who need short-term cash flow and expect a windfall in the beginning of the new year.
Why is it important for small business owners to know about these options? Small businesses are the lifeblood of the economy – both locally and nationally.
• Pre-Covid, small businesses accounted for 44 percent of the U.S. economic activity.
• During the pandemic, more than 60 percent of small businesses were forced to close at some point.
• Small business revenue dropped between 52
percent to 87 percent compared to the same period last year.
All three of these programs expire on December 31st of this year. Small business owners must act now to find out which program best suits their needs.