I know many of you have questions, as our phone has been ringing off the hook today! This morning Governor Hogan enacted an executive order closing all non-essential businesses, organizations, establishment, and facilities in Maryland, effective at 5:00 today.
Fortunately, our office has been deemed essential, so we will continue to be open to assist you during this time. However, we will be keeping our door locked, and limiting access inside the office. To see if your business qualifies as essential, read the Governor’s Interpretive guidance for businesses here: https://governor.maryland.gov/wp-content/uploads/2020/03/OLC-Interpretive-Guidance-COVID19-04.pdf?fbclid=IwAR0RZDQPrR-ooQy1jLhfND19Hm0nL5RSRTvpiZtadI8y4P1MU8Bxx3tXZIU
Many of our frequently asked questions today were concerning unemployment, such as “Can my employees file for unemployment if I cut their hours?” Please follow this link to “Frequently Asked Questions About COVID-19 and Maryland’s Unemployment Insurance Benefits Administration – Unemployment Insurance.” for this answer and more: http://www.labor.maryland.gov/employment/uicovidfaqs.shtml
Another top question asked about government loans and grants. The link below will send you to “Maryland COVID-19 Emergency Relief Fund Programs for Businesses.”
Maryland has authorized $130 million in loan and grant funding for small businesses and manufacturers that have been negatively impacted by the Coronavirus (COVID-19). This emergency assistance provides interim relief and proceeds that can be used to pay cash operating expenses including payroll, suppliers, rent, fixed debt payments and other mission critical cash operating costs.
If you are a Maryland-based business impacted by the Coronavirus with under 50 full- and part-time employees, see if you qualify for assistance: https://commerce.maryland.gov/fund/maryland-small-business-covid-19-emergency-relief-fund-programs
In addition, Small business owners in all U.S. states and territories are currently eligible to apply for a low-interest loan due to Coronavirus (COVID-19). This link will take you to the U.S. Small Business Administrations’ “SBA Disaster Assistance in Response to the Coronavirus” page: https://www.sba.gov/disaster-assistance/coronavirus-covid-19#section-header-1
We have also come up with a list of suggestions for those of you in need of immediate relief:
- If you collect sales tax, and remitted a payment on March 20th, you can request to have this money quickly refunded. All sales tax remittances originally due in March, April, or May, are now do June 1st.
- A similar relief measure also applies to Maryland Withholding. Withholding payments originally due in April or May, are now due June 1st. For those of you who use a payroll company such as ADP, Paychex, Kelly Payroll, etc., we are awaiting further guidance from them, on how they are planning to handle this matter.
- We would like to remind you to not cancel your payroll service, even if you suspend wages at this time. Quarterly reports will still need to be filed, and you must maintain your payroll service.
- AVOID selling stocks at all costs! Take advantage of low rates and apply for home equity loans, personal loans, or credit card promotions to get by in the short term. The economy will recover.
We have also been asked to explain how employers take the 100% credit for paid leave required by the Families First Act. Remember, the act states:
“Effective for wages paid after April 2, 2020 all full time employees qualify for 80 hours of Federal paid sick leave at your full pay rate of up to $511 daily if you are ill, quarantined, been advised by a medical professional to self-quarantine or have symptoms for which you are seeking medical diagnosis, all from Covid-19. You also qualify for FMLA sick leave at up to 2/3 of your normal pay up to $200 daily for 12 weeks (of which 10 are paid) for caring for any individual under quarantine, isolation, etc., or because your child under 18’s school or daycare has been closed.
These rules apply to wages earned through December 31, 2020.”
Below is an explanation and example of how employers are able to take the credit immediately:
“Prompt Payment for the Cost of Providing Leave
When employers pay their employees, they are required to withhold from their employees’ paychecks federal income taxes and the employees’ share of Social Security and Medicare taxes. The employers then are required to deposit these federal taxes, along with their share of Social Security and Medicare taxes, with the IRS and file quarterly payroll tax returns (Form 941 series) with the IRS.
Under guidance that will be released next week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care 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 child care 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.
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.
Equivalent child care leave and sick leave credit amounts are available to self-employed individuals under similar circumstances. These credits will be claimed on their income tax return and will reduce estimated tax payments.
Small Business Exemption
Small businesses with fewer than 50 employees will be eligible for an exemption from the leave requirements relating to school closings or child care unavailability where the requirements would jeopardize the ability of the business to continue. The exemption will be available on the basis of simple and clear criteria that make it available in circumstances involving jeopardy to the viability of an employer’s business as a going concern. Labor will provide emergency guidance and rulemaking to clearly articulate this standard.”
Again, if you are using a payroll processing company, we are awaiting word on how they will work with clients to immediately make the credit available.
We are also scheduled for a webinar on Wednesday afternoon to get more guidance on extended dates, returns and the Family First Act.
For a few last reminders:
- Maryland Personal Property return due dates have also been extended until July 15th.
- For more coronavirus information for businesses: https://govstatus.egov.com/md-coronavirus-business
- For more ways to protect yourself financially from the impact of the coronavirus: https://www.consumerfinance.gov/about-us/blog/protect-yourself-financially-from-impact-of-coronavirus/#anchor_paying-bills
If you have any questions or need assistance with applying for aid, please call us. We are open and working, and we’re ready to help however we can.
Please stay safe, healthy and home if possible!