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especially since more modifications to this program are anticipated in the future . As always , we are available to help .
Economic Injury Disaster Loan
To provide additional relief to small businesses that are experiencing a temporary loss in revenue due to the pandemic , employers are also eligible to apply for an Economic Injury Disaster Loan with an advance of up to $ 10,000 . Following a successful application , funds will be rewarded and the loan advance will not have to be repaid . To qualify for this program you must be a small business with fewer than 500 employees and able to show that your business was directly affected by COVID-19 . It is important to understand how the PPP program and the EIDL program coordinate . Check with your Rea advisor to learn more .
Tax Planning Opportunities
In addition to all of the available resources provided by the CARES Act impacting the operational side of business , U . S . taxpayers sought out tax assistance as well . Postponed tax return filing deadlines and deferrals were among many tax-related relief measures . Here are a few notable decisions :
| TAX FILING DEADLINE RELIEF - In an effort to give U . S . taxpayers and businesses more time to file their tax returns , The Department of the Treasury announced that Tax Day would be postponed to July 15 . Assuring that all taxpayers and businesses would receive additional time to file and make payments without interest or penalties . In addition , IRA and health saving account ( HSA ) contributions for your 2019 tax year were postponed to July 15 as well .
| DELAYED PAYMENT OF EMPLOYER PAYROLL TAXES - This CARES Act provision offers the ability to defer employer payroll tax obligations incurred from March 27 to Dec . 31 , 2020 , penalty-free , until December 2021 ( 50 percent ) and December 2022 ( 50 percent ).
| EMPLOYEE RETENTION TAX CREDITS
- The CARES Act provides a refundable payroll tax credit ( maximum $ 5,000 per employee ) for 50 percent of qualifying wages paid by an eligible employer whose business has been financially impacted by COVID-19 . Qualifying employers must fall into one of two categories :
• The employer ’ s business is fully or partially suspended by government order due to COVID-19 during the calendar quarter , or
• The employer ’ s gross receipts are below 50 percent of the comparable
By Paul McEwan , CPA , MTax , AIFA principal & director of benefit plan services paul . mcewan @ reacpa . com ( New Philadelphia office ) quarter in 2019 . Once the employer ’ s gross receipts go above 80 percent of a comparable quarter in 2019 , they no longer qualify after the end of that quarter .
Employers are not eligible for the employee retention tax credit if they received a PPP loan . Employers may claim the employee retention tax credit and credits for FMLA and paid sick leave under the Families First Act , but not for the same wages .
As mentioned in the Small Business Corner article , “ Reassessing The Business ,” COVID-19 could present an opportunity to strengthen your position in the marketplace , increase your company ’ s value and ensure ongoing business continuity . Be sure you are maximizing the value of these resources and consult with your Rea financial advisors to reassess your strategic plans . There are several government programs available that could bring your business out of this crisis if you know how to approach them .
By Greg Speece , CPA , principal greg . speece @ reacpa . com ( Dublin office )
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