An Elevated Update: CARES Act & Cash Flow

Last week the initial Families First Coronavirus Response Act was passed. This bill goes into effect on April 2, 2020. We continue to research the implications of this bill and will keep you updated when the IRS releases additional guidance next week. In the meantime we do know the following information:


Families First Coronavirus Response Act

• Tax filing and payment deadline has been extended to July 15th, 2020 for annual tax returns.
• Requirement for employers with less than 500 employees to provide Paid Sick Leave and Family Medical Leave to their employees in specific situations associated with COVID-19.
• Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or child care is unavailable in cases where the viability of the business is threatened.
• To offset the cost to businesses, Employer Social Security and Medicare Tax will be reduced by the amount of Paid Sick and Family Medical Leave costs covered by employers.
• For an employee who is unable to work because of Coronavirus quarantine or self-quarantine or has Coronavirus symptoms and is seeking a medical diagnosis, eligible employers may receive a refundable sick leave credit for sick leave at the employee's regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days.
• For an employee who is caring for someone with Coronavirus, or is caring for a child because the child's school or child care facility is closed, or the child care provider is unavailable due to the Coronavirus, eligible employers may claim a credit for two-thirds of the employee's regular rate of pay, up to $200 per day and $2,000 in the aggregate, for up to 10 days. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

If you would like to read additional information from the IRS on this Act click here. The IRS will release additional guidance next week so stay tuned.

Cash Flow is Key
During times of unease in our economy it is imperative to focus on cash management. Believe it or not we are nerds when it comes to budgeting and cash flow projections.  We are creating an offering to help you out in this area. A few quick tips to consider in the meantime:

• Got debt? Ask your lending partners if interest-only or deferred payments are possible.
• Call your vendors - Ask if longer payment terms are available.
• Reduce rent - Ask your landlord if you can defer or temporarily reduce rent payments.

Need help now?
For small businesses requiring financial assistance during this difficult time, information on the SBA’s Economic Injury Disaster Loan program can be found here. There may be additional loans available with the next Act Congress is discussing.

What to expect from us 
We are working our hardest to keep on top of all unemployment matters and will do our best to keep you in the loop.  As some businesses face closure or employee layoffs, questions are inevitable. To see the FAQ page specifically for Montana Employers related to Covid-19 click here. If you are in a different State just go to your State's Unemployment website for additional guidance. 

We want to support you however we can, we are a team.  

The Finale
Our last post started with our Core Value of Flexibility. We would like to wrap this one up with another that is just as close to our heart: Gratitude. There are specific times in life when fear and uncertainty feel as if they are a strangling cloak in which we cannot escape. However, it is in these times that Gratitude is most paramount. Take a breath, then take a step outside your thoughts. Grasp onto a happy thought. Ours is that we have the opportunity to serve you and will continue to be here as needed.

---