During this uncertain time, each day brings new issues and questions for businesses, as COVID-19 continues to spread around the world. To help businesses prevent, respond to, and mitigate the effects of this medical, business, and economic challenge, Williams Parker has launched a multidisciplinary task force of lawyers to advise on issues arising from the COVID-19 pandemic. The team is closely monitoring legal developments and guidance from federal, state, and local government and public health officials. Of the many concerns, some of the key areas of interest to businesses include:
The Coronavirus Aid, Relief, and Economic Security Act – The CARES Act provides financial support for individuals and businesses impacted by the COVID-19 pandemic. The $2 trillion stimulus relief package includes one-time direct payments to individuals, greater unemployment benefits, loans and grants to businesses, income tax breaks for businesses and individuals, and additional resources for hospitals, states, and municipalities. A few of the key benefits for businesses include:
• A refundable payroll tax credit for 50 percent of employer wages for companies that were prohibited from operating during the crisis.
• Employer-side Social Security payroll tax payments attributable to wages paid in 2020 may be delayed. Net operating losses earned in 2018, 2019, or 2020 can be carried back five (5) years. The NOL limit of 80 percent of taxable income is also temporarily suspended, so businesses may use any NOLs they have to fully offset their taxable income.
• Amendment of the Small Business Act to create a new business loan program category that will provide 100 percent federally-backed loans to eligible small businesses to help cover costs of operation such as payroll, rent, health benefits, and insurance premiums.
Expanded Family and Medical Leave and Paid Sick Leave – Congress enacted the Families First Coronavirus Response Act to provide emergency family and medical leave for employees that need to be away from work to care for a child when the child’s school or daycare is closed and the employee is unable to work or telework and care for the child. In addition, the Act provides for up to 12 weeks of paid sick leave to certain employees affected by COVID-19. With few exceptions, the new law applies to private businesses with fewer than 500 employees and public agencies with one or more employees. It took effect April 1, 2020.
Tax Benefits, Grants, and Loan Programs – Several additional relief efforts are being implemented to address the economic impact of COVID-19 and to aid those affected.
• Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic – Extends the deadline for filing income tax returns and paying income tax (with some limitations) to July 15, 2020.
• Families First Coronavirus Response Act – Provides 100 percent refundable tax credit to private-sector employers with fewer than 500 employees that are required to provide paid sick leave and paid family leave benefits.
• The Florida Small Business Emergency Bridge Loan Program – Businesses with between 2 and 100 employees will be eligible to take short-term, interest-free (for the first year) working capital loans of up to $50,000 (up to $100,000 in special circumstances). Eligible businesses must apply with the Florida Department of Economic Opportunity by May 8, 2020.
• The U.S. Small Business Administration Economic Injury Disaster Loan Program – Provides small businesses with working capital loans of up to $2 million to help overcome temporary losses of revenue.
The above information provides a highlevel overview of just some of the concerns and relief measures for businesses and their employees. For more detailed information and continued updates, visit williamsparker.com/covid-19-resources.
Williams Parker has been providing experienced guidance in the areas of corporate law, employment law, tax, healthcare, intellectual property, real estate, litigation, and estate planning and administration since 1925. The firm also serves clients’ needs globally through its membership in Ally Law, an international alliance of law firms.