***Updated 4/27/20*** The U.S. Treasury Encourages Businesses Impacted by COVID-19 to Use Employee Retention Credit. The goal of the credit is to encourage businesses to keep employees on their payroll. The refundable tax credit is 50 percent of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.
The credit is available to all employers regardless of size, including tax-exempt organizations. Small businesses who take Small Business Loans are not eligible.
A business qualifies if it falls into one of two categories:
- The employer’s business is fully or partially suspended by government order due to COVID-19 during the calendar quarter
- The employer’s gross receipts are below 50 percent of the comparable quarter in 2019. Once the employer’s gross receipts go above 80 percent of a comparable quarter in 2019 they no longer qualify after the end of that quarter.
These measures are calculated each calendar quarter.
More information on the credit can be found here.
WorkShare is a program that the Commonwealth of Massachusetts has offered for some time, but may be particularly helpful now. The program is designed to be an alternative to layoffs, allowing employees to work reduced hours while collecting unemployment benefits to supplement their lower wages. If an employer participates, the employee gets to keep his or her job while working reduced hours, has wages supplemented, and continues to receive company benefits. Employers can learn more about the program here, and can access information on how to apply here.
COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs. The Families First Coronavirus Response Act (the “FFCRA”), provides small and midsize employers (those with fewer than 500 employees ) refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19. Workers may receive up to 80 hours of paid sick leave for their own health needs or to care for others and up to an additional ten weeks of paid family leave to care for a child whose school or place of care is closed or child care provider is closed or unavailable due to COVID-19 precautions. The FFCRA covers the costs of this paid leave by providing small businesses with refundable tax credits. Certain self-employed individuals in similar circumstances are entitled to similar credits.
For FAQs, see “Basic FAQs,” and the sections that follow. The FAQs will be updated to address changes in the law or additional questions as they are raised.
The U.S. Small Business Administration issued a notice of an Economic Injury Disaster Loan (EIDL) declaration for all counties in the Commonwealth of Massachusetts on March 18, 2020. More information about what this declaration means can be found here.
The regional office of the Small Business Administration is located at 10 Causeway Street, Room 265, Boston, MA, and its telephone number is 617-565-5590. The site has a Coronavirus (COVID-19) Small Business Guidance and Loan Resources page which is generally helpful.
More importantly, the site provides information relative to loan and debt relief options, such as :
For Private Nonprofits, businesses, homeowners, and renters, applications for Disaster Loan Assistance can be found here.
The Commonwealth of Massachusetts has a website that will direct you to some of the programs listed above, but it will also link you to State resources as well. Find the site here.
The U.S. Chamber of Commerce has a helpful website for small businesses seeking guidance relative to the CARES Act. In particular, it has produced a Small Business Guide and Checklist that outlines what small businesses, independent contractors and gig economy workers need to do to access available funds.
The U.S. Senate Committee on Small Business and Entrepreneurship has produced a helpful guide that outlines initiatives for small businesses that were included in the federal relief legislation, know as the Coronavirus Aid, Relief, and Economic Security (CARES) Act, that was just passed by Congress and signed by the President. Find it here.