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President Trump signed one executive order and three memoranda on Aug. 8, 2020, aimed at providing financial assistance and relief to Americans amid the ongoing COVID-19 pandemic.

Note: This is a deferral, not a payroll tax forgiveness. This memorandum instructs the Secretary of the Treasury to defer the withholding, deposit, and payment of the tax imposed on the employee portion of the Social Security tax of 6.2% until next year.

The due date for the withholding and payment of the employee share of Social Security tax on Applicable Wages is postponed until the period beginning on Jan. 1, 2021 and ending on April 30, 2021.

It does if you are an employer who is required to withhold and pay the employee share of Social Security tax under section 3102(a).

The "Applicable Wages" are wages or compensation paid to an employee on a pay date during the period beginning on Sept. 1, 2020 and ending on Dec. 31, 2020, but only if the amount of the wages or compensation is less than a defined threshold amount for each pay period.

How are Applicable Wages determined?

The determination of Applicable Wages is made on a pay period-by-pay period basis. If the amount of wages or compensation payable to an employee for a pay period is less than the corresponding pay period threshold amount, then that amount is considered Applicable Wages for the pay period. The employer then may defer the employee share of social security tax on the Applicable Wages, irrespective of the amount of wages or compensation paid to the employee for other pay periods.

What are the threshold amounts for common pay periods?

• Bi-weekly pay period: Less than $4,000 
• Weekly pay period threshold amount: $2,000 ($2,000 x 52 weeks = $104,000.00)
• Semi-monthly pay period threshold amount: $4,333.33 [$4,333.33 x 24 (2 pay periods/month) = $103,999.92]
• Monthly threshold amounts: $8,666.66 ($8,666.66 x 12 months = $103,999.92)

Note: These assumptions are based upon the original $104,000 annual limit put forth in the President’s Executive Memorandum. This is also assuming 26 check dates, for a bi-weekly schedule. ($4,000 x 26 = $104,000). The guidance does not specifically indicate any threshold amount other than the bi-weekly amount.

An employer remains responsible to collect and remit any deferred taxes. An employer must withhold and pay the total taxes due that the employer deferred under this notice ratably from wages and compensation paid between Jan. 1, 2021 and April 30, 2021 or interest, penalties, and additions to tax will begin to accrue on May 1, 2021, with respect to any unpaid taxes. If necessary, the employer may make arrangements to otherwise collect the total taxes from the employee.

Keep in mind that this is a deferral and nothing in the memorandum explicitly forgives this amount nor can it without an act of Congress. It does specifically state that amounts deferred will not be subject to penalties, interest, additional amounts, or additional tax.

Employers, meanwhile, have had the ability to defer payment of the employer share of the Social Security tax (6.2%) paid since the passage of the CARES Act in April. The law allows such payments over a two-year period – with half due by Dec. 31, 2021 and the other half due by Dec. 31, 2022.

Employers may be facing the brunt of any implementation because of the complexity created on calculating and tracking such tax deferrals. Plus, the process itself of creating new regulations is wrought with layers of complexity, including rules that might change as the process progresses from drafting proposed regulations to taking public comments to issuing finalized regulations. If shifts occur, employers will need to be nimble and stay up to date on any changes to current law.

The IRS has released a draft Form 941 to reconcile this deferral, but this could be revised before the final version. Additionally, we await instructions for the form to understand how the specifics work.  

PPP Loan Updates:

Many of the changes to the loan forgiveness provisions of the PPP loan involved extended deadlines, as well as to the covered period for loan forgiveness. Additional changes were made on the percentages applied to eligible costs that could be forgiven and exemptions on full-time equivalent (FTE) employees that are included in calculating forgiveness.

• Extends the covered period. The covered period begins on the date you receive your loan and ends 24 weeks later, or Dec. 31, 2020, whichever is earlier. Borrowers who received a PPP loan before June 5, 2020 (the effective date of the PPP Flexibility Act) may elect to use their original covered period (eight weeks after their loan received).
• Loan forgiveness. Amends SBA rule requiring that not more than 25% of the borrower’s loan forgiveness amount could be attributed to non-payroll costs. If a borrower uses less than 60% of the loan amount for payroll costs during the forgiveness covered period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60% of the loan forgiveness amount having been used for payroll costs.
• FTE Salary/Hourly Wage Re-Hire safe harbors. Extends the time a borrower can qualify for the FTE and Salary/Hourly Wage reduction safe harbors from June 30, 2020 to Dec. 31, 2020 if they fully restore FTEs and/or salary/hourly wages. The Act also created a new FTE Reduction Exemption that provides loan forgiveness will not be impacted if the FTE reduction was due to being unable to re-hire employees (or hire similarly qualified employees) or return to pre-COVID-19 business activity.
• Extended Deferral of Loan Repayment. Extends deferment of payments of loan principle, interest and fees, from the current six months, to the date when the SBA pays the forgiveness amount to your lender. If a borrower has not applied for forgiveness of a covered loan within 10 months after the last day of the covered period payments on principal, interest and fees will begin.
  
  

The Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act both provide refundable tax credits for qualifying wages. There are three reasons you might file a Form 7200:

• Employee Retention Tax Credit (CARES Act) 
• Refund of wages paid for qualified sick leave ((FFCRA)
• Refund of wages paid for qualified family leave (FFCRA)

Paychex will apply the amount of the credit to the federal tax liability, which in most cases is the quickest way to use the credit. If the amount of the credit exceeds the federal liability, and you choose not to carry the credit forward to the liability for the next check date, you can complete a Form 7200 to apply for an accelerated credit from the IRS. NOTE – you must inform Paychex if you are filing a Form 7200. If you do not inform Paychex, we will continue to apply the credits to their next payroll which may result in potential liability for your business.  

Where can I find Form 7200?
You can find Form 7200 and the instructions on the IRS website.

The CARES Act’s Paycheck Protection Program (“PPP”) provides significant financial incentives for small businesses to hold on to current employees and to bring back employees who have been laid off or furloughed, even before their business is fully back up to speed. 

Update: On July 1, the House passed the U.S. Senate bill extending the PPP application deadline to August 8. The bill now heads to the White House, where President Trump is expected to sign it into law.

Loans can be up to 2.5 times your average monthly payroll costs, not to exceed $10 million.

To calculate payroll costs:

sum of INCLUDED payroll costs - sum of EXCLUDED payroll costs = payroll costs

Included Payroll Costs:

The sum of payments of any compensation with
respect to employees that is a:

• salary, wage, commission, or similar compensation;
• payment of cash tip or equivalent;
• payment for vacation, parental, family, medical, or sick leave;
• allowance for dismissal or separation
• payment required for the provisions of group health care benefits, including insurance premiums
• payment of any retirement benefit
• payment of state or local tax assessed on the compensation of the employee

Excluded Payroll Costs

1. Compensation of an individual employee in excess of an annual salary of $100,000, as prorated for the period February 15, to June 30, 2020
2. Payroll taxes, railroad retirement taxes, and income taxes
3. Any compensation of an employee whose principal place of residence is outside of the United States
4. Qualified sick leave wages for which a credit is allowed under section 7001 of the Families First Coronavirus Response Act (Public Law 116–5 127); or qualified family leave wages for which a credit is allowed under section 7003 of the Families First Coronavirus Response Act

How could the forgiveness be reduced?
The amount of loan forgiveness calculated above is reduced if there is a reduction in the number of employees or a reduction of greater than 25% in wages paid to employees.

What if I bring back employees or restore wages?
Reductions in employment or wages that occur during the period beginning on February 15, 2020, and ending 30 days after enactment of the CARES Act, (as compared to February 15, 2020) shall not reduce the amount of loan forgiveness IF by June 30, 2020 the borrower eliminates the reduction in employees or reduction in wages.

Once your PPP loan closes, your eight-week period for loan forgiveness begins immediately. To maximize forgiveness eligibility, you need to get people back on payroll quickly. Click here to see how the process works:

https://www.paychex.com/support/loan-forgiveness

Whether you have recently received your Small Business Administration loan through the Paycheck Protection Program (PPP), or are hoping to apply in the future, how much of your loan may be forgivable by the federal government is based on many factors. Our friends at Paychex have created a Loan Forgiveness Estimator to assist you with understanding what part of your loan may be forgiven.

To calculate your estimated loan forgiveness, please visit https://www.advancepartners.com/ppp-loan-forgiveness-estimator

Here’s what we know as of Monday, March 30, 2020:

• The effective date for the FFCRA is Wednesday, April 1, 2020.
• The leave provisions of the FFCRA generally apply to all private employers with fewer than 500 employees.
• Eligible employees with a qualifying need related to the COVID-19 public health pandemic as specified in the FFCRA will be entitled to paid leave as of April 1, 2020.
• Each covered employer must post a notice of the FFCRA requirements in a conspicuous place on its premises.   
• Covered employers will be entitled to tax credits in the specified amount under the law for the benefits paid to eligible employees for qualified leave taken under the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act between April 1, 2020, and December 31, 2020.

• Private employers with fewer than 500 employees (instead of employers with 50 or more employees) must provide up to 12 weeks of job-protected public health emergency leave, ten weeks of which must be paid leave, to their employees through December 31, 2020.
• Only applies when employee is unable to work or telework due to caring for child under 18 if the child's school is closed or the child's regular childcare provider is unavailable due to the public health emergency.
• Employees eligible after 30 days of employment
• Daily pay cannot exceed $200 per day, and in the aggregate, paid leave under this Section is not to exceed $10,000.00 per employee.  Part-time employees are also eligible for paid leave, but it is calculated based on the average number of hours worked during the previous six months before taking leave, or if the employee has not worked during the prior six months, based on the reasonable expectation that the employee had at the time of hire regarding his or her expected hours of work.

Under the Emergency Paid Sick Leave Act, employers would be required to provide sick time, available for immediate use, to each employee who requires such time for qualifying reasons associated with COVID-19.

Employers also must provide up to 80 hours of paid sick leave (PSL) to eligible full-time employees and pro-rate part-time employee paid sick time based on the average number of hours regularly scheduled in a two-week period. The calculation and caps for compensation vary dependent on the reason for leave up to the maximum $511 per day if the employee is directly impacted and up to $200 per day if it is for care provided to someone else. Aggregate caps exist as well.

Congress is trying to make sure that payment of family and sick leave come at no net cost to employers.

To achieve this, an employer required to pay family or sick leave is allowed to claim a credit against the employer's 6.2% share of the Social Security taxes paid on all wages. Any credit in excess of this amount is fully refundable. 

To speed along the process, the IRS issued Form 7200 to:

1. Offset the family, sick, and employee retention credits against not only the employer’s share of Social Security taxes on a payroll tax return, but also federal income tax withholding and the full amount of the employer’s and employee’s share of payroll taxes, and
2. Receive an immediate benefit equal to the anticipated credits by reducing the amount of the required payroll deposits by the computed credits.

You can download the instructions for the form HERE

Download the actual form HERE.

The CARES Act is a financial stimulus package designed to help small businesses get a loan of up to $10 million to stay afloat to help offset the financial challenges created by the COVID-19 pandemic. Additional benefits provided through the Paycheck Protection Program (PPP) incentivize you to avoid layoffs.

Yes! A key piece of the largest relief bill in recent memory is the more than $370 billion in funding for small businesses, including staffing firms who meet eligibility requirements. Businesses with fewer than 500 employees are eligible for up to $10 million in loans, which can be used for payroll and other expenses, such as insurance premiums, mortgage interest, rent or utilities.

The loans, available at financial institutions currently extending SBA loans and other non-traditional lenders, would be completely forgiven if the employer continues to keep the employees or hires back those who already have been laid off, and uses the funds for covered expenses.

You are eligible if you are:
• A small business with fewer than 500 employees
• A small business that otherwise meets the SBA’s size standard
• A 501(c)(3) with fewer than 500 employees
• An individual who operates as a sole proprietor
• An individual who operates as an independent contractor
• An individual who is self-employed who regularly carries on any
trade or business
• A Tribal business concern that meets the SBA size standard
• A 501(c)(19) Veterans Organization that meets the SBA size standard

In addition, some special rules may make you eligible:
• If you are in the accommodation and food services sector (NAICS 72),
the 500-employee rule is applied on a per physical location basis
• If you are operating as a franchise or receive financial assistance
from an approved Small Business Investment Company the normal
affiliation rules do not apply

REMEMBER: The 500-employee threshold includes all employees: full time, part time, and any other status.

In evaluating eligibility, lenders are directed to consider whether the borrower was in operation before February 15, 2020 and had employees for whom they paid salaries and payroll taxes or paid independent contractors.

Lenders will also ask you for a good faith certification that:
1. The uncertainty of current economic conditions makes the loan request necessary to support ongoing operations
2. The borrower will use the loan proceeds to retain workers and maintain payroll or make mortgage, lease, and utility payments
3. Borrower does not have an application pending for a loan duplicative of the purpose and amounts applied for here
4. From Feb. 15, 2020 to Dec. 31, 2020, the borrower has not received a loan duplicative of the purpose and amounts applied for here (Note: There is an opportunity to fold emergency loans made between Jan. 31, 2020 and the date this loan program becomes available into a new loan) If you are an independent contractor, sole proprietor, or self-employed individual, lenders will also be looking for certain documents (final requirements will be announced by the government) such as
payroll tax filings, Forms 1099-MISC, and income and expenses from the sole proprietorship.

Assistance from the CARES Act is not dependent on:

• Whether you sought and were unable to obtain credit elsewhere.
• You providing a personal guarantee.
• You putting up any collateral.

What is it?

The Employee Retention Credit is a fully refundable tax credit for employers equal to 50 percent of qualified wages (including allocable qualified health plan expenses) that Eligible Employers pay their employees. 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.

More information on eligibility and other FAQ's on this can be found here:

https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act

Our partner, HIREtech, has created an online COVID-19 Tax Credit Analyzer. If you are interested in seeing how much you will be credited, that resource can be found here: https://covid19.hiretech.com/?utm_source=active_campaign&utm_medium=email&utm_campaign=covid19_tax_analyzer

Absolutely! Advance Partners is open for business.

For your health and safety, as well as that of our employees, the majority of our team members are now working from home, with only about 10 deemed essential who still go into the office.

We have gone to great strides to ensure none of our services have been interrupted and that it's business as usual. 

In addition, you'll never have to turn down an opportunity due to lack of working capital while partnered with us. Because we're backed by Fortune 1000 company, Paychex, we can provide unlimited funding without restricting our credit requirements, regardless of the economic state.

Absolutely not. Because of our extensive preparedness plans, our teams were able to leap into action as soon as we saw that we may have to begin setting up offsite operations.

As a result of that preparedness and execution, all our services are humming along as they were and we don't expect any interruption of service.

No. We're still able to offer our entire range of back office support, including invoicing, payroll tax administration, custom reporting, and software solutions.

Because we provide funding, including to some staffing firms who provide essential functions, we are considered an essential business. We are committed to being there for you and will make necessary accommodations so that we can provide service to you and your employees while still following government regulations.

Listen to Episodes 1-10 now!
https://www.paychex.com/worx/podcasts/business-podcast

Wondering how the most recent stimulus bill passed by Congress will affect your business? Join us Friday, Jan. 8 at 2 p.m. ET to learn about: 

Click Here to Register

• The targeted expansion to the PPP, and other loans and grants;
• Changes to the employee retention and paid leave tax credits, as well as employee social security tax deferral repayments;
• Tax extensions under the 2021 fiscal budget;
• Expansions to unemployment insurance;
• Changes to retirement, Section 125, and HSA Relief; and
• New healthcare provisions impacting individual and group health plan members.

Understanding the CARES Act and its Business Impact
Friday, April 3, 2020
Host: Paychex
Link here to watch: https://www.paychex.com/secure/seminars/understanding-cares-act?utm_medium=email&utm_campaign=435136&utm_source=marketo&utm_content=default&campaign_id=&os_ehash=50@marketo:A7NVZ94&lift=A7NVZ94&mkt_tok=eyJpIjoiTVdVNFlUTTBOVFEzWm1VNCIsInQiOiJPTWtUZE9xQVVhakdWOFNaODVoWDBMNTVISThzRStsR2ZyQmE5WVYzREVndTFmaWpXSitHQ3pDdnIySGlYWjdJQmcrTzdUeGtjU2FRcjBJY1dNbjZPVEpwWnV5Um5hODdLMDdTZkRPMFIzVnZWSTNINlJFXC82THhkelkzc1NLK0QifQ%3D%3D

The CARES Act- Overview for Staffing Firms
Wednesday, April 1, 2020
Host: American Staffing Association
Link here to watch the webinar: https://americanstaffing.net/webinars/the-cares-act-overview-and-ramifications-for-staffing-firms/

The coronavirus pandemic will end, but it won't be overnight. It will take a concerted and sustained effort from federal, state, and local governments, as well as its citizens to ensure that people are and feel safe and more at ease.
Make sure you are made aware of all the potential changes for your workers.
https://www.paychex.com/articles/human-resources/after-the-pandemic-whats-next-for-employees

What can I do to protect my employees and business?

The CDC recommends simple, everyday preventative actions to help curb the spread of respiratory viruses.

• Avoid close contact with people who are sick
• Avoid touching your eyes, nose, and mouth with unwashed hands
• Wash your hands often with soap and water for at least 20 seconds. If soap and water aren't available, use an alcohol-based hand sanitizer containing at least 60 percent alcohol.

Additionally, experts suggest:

• Meeting virtually with clients and co-workers
• Avoiding large work gatherings such as conferences
• Limiting travel, especially non-essential business travel
• Reviewing or developing your company's business continuity plan   

When should I – or my employees – stay home?

If you have symptoms of acute respiratory illness (fever, coughing, shortness of breath), the CDC recommends you stay home until you are free of fever, signs of a fever, and any other symptoms for at least 24 hours without the use of fever-reducing or cough suppressant medication.

What if one of my employees is returning from international travel? Should I tell them to stay home?

If an employee is returning from international travel to an area with widespread sustained transmission of COVID-19, as confirmed by the CDC (as of March 4, 2020, that’s China, Japan, Italy, Iran, and South Korea), consider the most current recommendations found on the CDC website.

What if one of my employees becomes sick or is quarantined?

Employers should reference their established paid sick leave policies as well as federal, state and local paid leave laws where applicable.  Employers should also be aware of federal and state disability leave laws. Keep in mind that they may be quarantined and not diagnosed with the virus. In such cases, paid time off or sick policies may not be implicated.

Many states have created specific online resources for COVID-19 to provide updates and guidance to residents. 

New Jersey
New Jersey COVID-19 FAQ's
Please see the above link for guidance and best practices around some common questions related to these new challenges for New Jersey.

What you should consider when recalling employees from furlough/ temporary lay-off, or rehiring after termination.

Paychex has put together a very useful checklist to help answer these questions. 
New Jersey Return to Work Checklist