Jim Himes reports that he has been in constant communication with the Fourth District’s small business and non-profit communities during this uncertain time. Congress’ aggressive and escalating response to the crisis – embodied in the Coronavirus Preparedness and Response Supplemental Appropriations Act, Families First Coronavirus Response Act, and the CARES Act – demonstrates the seriousness with which we take this threat to our local communities. These economic relief packages can help small businesses, certain non-profits, and other employers survive the coronavirus pandemic.
Please review the information below and attached to this email that the Senate Committee on Small Business & Entrepreneurship and I compiled to assist you and organizations in the Fourth District.
Payment Protection Program (PPP) Loans
The program provides cash-flow assistance through 100 percent federally guaranteed loans to employers who maintain their payroll during this emergency. If employers maintain their payroll, the government would forgive the loans. PPP provides forgiveness of up to 8 weeks of payroll based on employee retention and salary levels, no SBA fees, and at least six months of deferral with maximum deferrals of up to a year. Small businesses and other eligible entities will be able to apply if COVID-19 harmed them between February 15, 2020, and June 30, 2020. This program is retroactive to February 15, 2020, in order to help bring workers who may have already been laid off back onto payrolls.
This Friday, April 3, 2020, small businesses (including non-profits) and sole proprietorships can apply. Independent contractors and self-employed individuals can apply starting on Friday, April 10, 2020. Loans are available through June 30, 2020.
Small Business Debt Relief Program
This program will provide immediate relief to small businesses with non-disaster SBA loans, in particular 7(a), 504, and microloans. Under it, SBA will cover all loan payments on these SBA loans, including principal, interest, and fees, for six months. This relief will also be available to new borrowers who take out loans within six months of the CARES Act’s enactment.
Economic Injury Disaster Loans & Emergency Economic Injury Grants
These grants provide an emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19 within three days of applying for an SBA Economic Injury Disaster Loan (EIDL). To access the advance, you must first apply for an EIDL and then request the advance. The advance does not need to be repaid under any circumstance and may be used to keep employees on payroll, to pay for sick leave, meet increased production costs due to supply chain disruptions or pay business obligations, including debts, rent, and mortgage payments.
The program allows employers to reduce the hours of full-time employees by as much as 60 percent, while their workers collect partial unemployment benefits to replace a portion of their lost wages. All employers with two or more full-time or permanent part-time employees can participate in the program, which is not designed for seasonal separations. To qualify, the business’ reduction of work cannot be less than 10 percent or more than 60 percent.
Refundable Tax Credits for Paid Leave Obligations
As required under the Families First Coronavirus Response Act, the Internal Revenue Service (IRS) issued guidance on the government’s plan to provide tax credits for eligible small and midsize businesses that offer paid leave for workers.
The credit is not available to employers receiving assistance through the Paycheck Protection Program.
This provision of the CARES Act provides a refundable payroll tax credit for 50 percent of wages paid by eligible employers to certain employees during the COVID-19 crisis. The credit is available to employers, including non-profits, whose operations have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings. The credit is also provided to employers who have experienced a greater than 50 percent reduction in quarterly receipts, measured on a year-over-year basis. This Employee Retention Credit applies to qualified wages paid after March 12, 2020, and before January 1, 2021. The maximum amount of qualified wages taken into account with respect to each employee for all calendar quarters is $10,000, so that the maximum credit for an Eligible Employer for qualified wages paid to any employee is $5,000.
Delay of Payment of Employer Payroll Taxes
Deferral is not provided to employers receiving assistance through the Paycheck Protection Program.
This provision would allow taxpayers to defer paying the employer portion of certain payroll taxes through the end of 2020, with all 2020 deferred amounts due in two equal installments, one at the end of 2021, the other at the end of 2022. Payroll taxes that can be deferred include the employer portion of FICA taxes, the employer and employee representative portion of Railroad Retirement taxes (that are attributable to the employer FICA rate), and half of SECA tax liability.
Counseling & Guidance
Many small business owners need a business counselor to navigate the various resources available to them. Local resource partners include the Small Business Development Center (SBDC), Women’s Business Center (WBC), or SCORE mentorship chapter. Find one of these local resource partner’s through the SBA
. Other community resources to turn to include the Connecticut Department of Economic and Community Development , Fairfield County Community Foundation, and the Connecticut Business & Industry Association
Call my Bridgeport District Office at (203) 333-6600 or contact me through my website if you have any questions about these resources or need help getting in touch with the Small Business Administration , IRS, or any related federal agency.
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