Business Updates For December 23, 2020
New State Programs Announced To Assist Businesses
View the recently announced programs below on tax extensions, tax credits, upcoming grant relief and state and local loan options for your small business.
COVID-19 Relief Grant for Small Businesses - Now Accepting Applications
The Governor announced the creation of a $500 million COVID-19 Relief Grant administered by the California Office of the Small Business Advocate (CalOSBA) at the Governor’s Office of Business and Economic Development for small businesses that have been impacted by COVID-19 and the health and safety restrictions.
The first application window opens December 30, 2020 at 8:00 a.m. and closes January 8, 2021 at 11:59 p.m.
Funds would be awarded to selected intermediaries with established networks of Community Development Financial Institutions to distribute relief through grants of up to $25,000 to undeserved micro and small businesses throughout the state. Cultural institutions and non-profits would also be eligible for these grants
for more information
State and Local Tax Extension
California businesses will experience immediate relief in the form of tax deferrals. Small businesses are encouraged to use the sale tax they have already collected to float any applicable obligations. The tax extension is based on sales made and sales tax collected as follows:
- Provides an automatic three-month extension for taxpayers filing less than $1 million in sales tax on the return.
- Extend the availability existing interest and penalty free payment agreements to companies with up to $5 million in taxable sales. Note- businesses in this category must fill out an online form.
- Broaden opportunities for more businesses to enter into interest-free payment arrangements.
- Expand interest-free payment options for larger businesses particularly affected by significant restrictions on operations based on COVID-19 transmissions.
Main Street Hiring Tax Credit
On September 9, 2020, the Governor signed Senate Bill 1447 establishing $100 million in hiring tax credits to small businesses with 100 or fewer employees as of December 31, 2019.
- An eligible small business can receive $1,000 tax credit for each net new hire that occurred during the second half of 2020 (up to a maximum tax credit of $100,000 per business).
- The tax credit can be used against personal and corporate income tax liabilities or sales and use tax liabilities from the 2020 tax year.
- To qualify, the small business must experience a 50% decrease in gross receipts in the Second Quarter of 2020 compared to the Second Quarter of 2019.
- In addition, the small business must have a net increase in new hires between July 2020 through November 2020 as compared with the prior quarter (April 2020 through June 2020).
Small businesses must apply for a tax credit registration between December 1, 2020 and January 15, 2021 with the California Department of Tax & Fee Administration (CDTFA). Applications will be processed on a first-come, first-served basis; it is important to apply as early as possible.
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New COVID-19 Legislation
*The information below is a summary of what is currently contained in the Coronavirus Relief Bill, signed by both Chambers. The bill and is awaiting the President's signature.
- Provides $284.5 billion to reopen and strengthen the Paycheck Protection Program (PPP) for first- and second-time borrowers.
- Allows small businesses to receive a second PPP loan if the business has less than 300 employees and can demonstrate a revenue reduction of 25 percent.
- Increases the PPP loan amount for Restaurants and Hotels from 2.5x payroll to 3.5x, providing an extra month’s worth of payroll support
- Codifies rules for faith-based organizations and churches to ensure they keep their eligibility.
- Expands PPP eligibility to include 501c6s, destination marketing organizations (DMOs), housing cooperatives, newspapers, broadcasters, and radio stations.
- Simplifies the PPP loan forgiveness application for loans under $150,000.
- Allows employers to deduct PPP related business expenses and expands list of eligible expenses to include:
- Software, cloud computing, and other human resources and accounting needs
- Covered supplier costs
- Repeals a provision from the CARES Act requiring PPP recipients to deduct their EIDL advance from their PPP loan forgiveness amount.
- Extends the repayment period of deferred payroll taxes through December 31, 2021. Penalties and interest on deferred unpaid tax liability will not accrue until January 1, 2022.
- Supplies $2 billion to enhance the SBA’s existing government guarantee loan programs, increases the 7(a) loan guarantee to 90 percent, extends the $1 million loan limit for SBA Express Loans, and establishes a 504 Express Loan Program.
Families, Students, and Workers
- $600 stimulus checks per individual/child ($1200 per married couple).
- Capped at $75,000 gross adjusted income per individual ($150,000 for married couples)
- Must have a valid social security number to qualify
- Eligibility for stimulus checks will be determined using 2019 tax information
- $10 billion for the Child Care and Development Block Grant Program (CCDBG)
- This funding will be used to:
- Provide relief from copayments and tuition payments for families and to help reduce the child care provider’s costs for families
- Assist child care providers with fixed costs and operating expenses and assure facilities can stay open or reopen
- Provide child care assistance to health care sector employees, emergency responders, sanitation workers, or other essential workers.
- Stabilize the child care sector against increased operating expenses.
- $82 billion for the Education Stabilization Fund
- 5% allocated to the Governor’s Emergency Education Relief Fund for Governors to make emergency grants to education entities
- $2.75B will be reserved for private schools to help cover costs due to the pandemic
- 67% in the Elementary and Secondary Schools Emergency Fund (K-12)
- 28% in the Higher Education Emergency Relief Fund
- Unemployed individuals receive an additional $300/week from Dec. 26, 2020 to March 14, 2021.
- Extends and phases out Pandemic Unemployment Assistance (PUA) for self-employed and gig workers to March 14 through April 5, 2021 and averts another PUA “cliff” by allowing PUA recipients as of March 14 to stay on three more weeks before their benefits end.
- Extends and phases out Pandemic Emergency Unemployment Compensation (PEUC), which provides additional weeks when state unemployment runs out, to March 14 through April 5, 2021.
- Extends many CARES Act provisions to March 14, 2021, including interest-free loans to states, flexible staffing, and relief for non-profits and state and local government.
- Extends the tax credit through March 2021 for employers that continue to offer paid sick and family leave to their employees.
- Clarifies that personal protective equipment and other supplies used for the prevention of the spread of COVID-19 are treated as eligible expenses for purposes of the educator expense deduction.
- Increases SNAP benefits by 15% for six months, but does not expand eligibility, and requires the Secretary to issue a report on redemption rate and unexpended balances.
- Takes steps towards ending surprise medical bills
- Allows for independent arbitration and dispute resolution between the insurer and provider, leaving the patient out of the process
- Billed charges and government payer rates cannot be considered during arbitration.
- No threshold for arbitration.
- No government rate-setting.
- Includes good-government guardrails to encourage in-network agreements and prevent abuse and overuse of the arbitration process.
- Many of our physicians expected to see payment reductions in 2021. We prevent at least 2/3 of these cuts from going through by establishing:
- A three-year delay of a new add-on code that reduces reimbursement to specialty providers.
- A $3 billion across the board increase in physician payments in 2021.
- Three additional months of Medicare sequester relief.
- Ways to allow more providers to access Alternative Payment Model bonuses, giving physicians added incentives to provide high-quality and cost-efficient care.
- An additional $20 billion distribution from the Provider Relief Fund to help doctors who have had to reduce services.
- Three-year extensions of Medicare, Medicaid, and Public Health programs.
- Community Health Centers;
- Teaching Health Centers;
- Diabetes Programs;
- Eliminating DSH reductions through 2023.
- Helping save rural hospitals by letting them become a new Rural Emergency Hospital, which gives them the Medicare funding and flexibility to offer health care services their community needs.
- More specifically, the policy creates a new, voluntary Medicare payment designation that allows struggling Critical Access Hospitals (CAH) or small, rural hospitals with less than 50 beds to convert to a Rural Emergency Hospital (REH).
- This would preserve beneficiary access to emergency medical care in rural areas that would otherwise be left with nothing if their CAH or rural hospital closed.
- Reforming in a comprehensive way how Rural Health Clinics (RHCs) are paid.
- Allowing RHCs and Federally Qualified Health Centers (FQHCs) to furnish and bill for hospice attending physician services when RHC and FQHC patients become terminally ill and elect the hospice benefit.
- Expanding access to mental health service through utilizing telehealth which improves beneficiary access, particularly in areas low on mental health professionals.
- Allowing for Physician Assistants to directly bill Medicare, expanding beneficiaries access to care providers in areas lacking health providers.
- Fixing payment for oxygen and oxygen equipment that allows for increased affordability and access to those supplies in rural areas.
Vaccine Development and Deployment
- Nearly $20 billion for the production of vaccines and therapeutics, covering the cost for everyone who needs it.
- $8.75 billion for distribution of vaccines. This includes cold chain, advance freezers, and supporting state efforts.
- $3 billion for the national stockpile.
Transportation and Infrastructure
- $45 billion in transportation assistance.
- $15 billion for passenger air carriers to retain employees;
- $2 billion for airports;
- $2 billion for grants, loans, and loan guarantees to transportation services providers, including the motor coach, over-the-road bus industry, and private school bus operators;
- $10 billion for state departments of transportation.
- Includes the bipartisan, bicameral Water Resources Development Act (WRDA) of 2020.
State and Local Government Assistance
- This bill ensures that failed Cities and States do not receive direct taxpayer funding.
- Extends the time period, from December 30, 2020 to December 31, 2021, in which State and local recipients of the existing U.S. Treasury distributed CARES Act Sec. 5001 Coronavirus Relief Funds (CRF) can make eligible pandemic expenses. This allows more of the already distributed $150 billion in CARES Act funds to be utilized.
- Under the CARES Act, Congress funded the Exchange Stabilization Fund (ESF) to stabilize our financial markets and provide a backstop that allowed the Fed to create targeted, temporary lending facilities for creditworthy borrowers. These temporary lending facilities did their job and are set to expire at the end of the year.
- $1.9 billion for the rip-and-replace program for communications providers with 10,000,000 subscribers or less to replace equipment in their communications networks that poses a national security threat.
- $300 million for broadband deployment program to support broadband infrastructure deployment to unserved areas, prioritizing unserved areas and rural areas.
- $250 million to the FCC to carry out the temporary telehealth pilot program authorized under the CARES Act.
- Establishes a $1 billion program at NTIA to support broadband infrastructure deployment, telehealth, and broadband adoption activities for federally recognized tribal nations.
NEW CAL/OSHA COVID-19 REQUIREMENTS FOR EMPLOYERS - EFFECTIVE IMMEDIATELY
On November 20, 2020, the California Department of Industrial Relations (DIR) Office of Administrative Law approved new Cal/OSHA emergency temporary standards (ETS) for COVID-19, effective November 30, 2020. Many of the ETS are already required by existing employer workplace injury and illness prevention programs (IIPP-see Injury and Illness Prevention Program), or will be required under AB 685 (the new COVID-19 employee safety and reporting law effective January 1, 2021), but some requirements are new and must be complied with immediately.
All California employers, regardless of size, must comply with the new ETS, with the following exceptions:
- Workplaces where there is only one employee who does not have contact with other people;
- Employees who are working from home; and
Employees who are covered by the Aerosol Transmissible Diseases regulation.
Under the ETS, employers must develop a written COVID-19 Prevention Program or ensure its elements are included in an existing IIPP, and implement the following in their written program:
- Communication to employees about the employer’s COVID-19 prevention procedures
- Identify, evaluate, and correct COVID-19 hazards
- Physical distancing of at least six feet unless it is not possible
- Use of face coverings
- Use engineering controls, administrative controls and personal protective equipment as required to reduce transmission risk
- Procedures to investigate and respond to COVID-19 cases in the workplace
- Provide COVID-19 training to employees
- Provide testing to employees who are exposed to a COVID-19 case, and in the case of multiple infections or a major outbreak, implement regular workplace testing for employees in the exposed work areas
- Exclusion of COVID-19 cases and exposed employees from the workplace until they are no longer an infection risk
- Maintain records of COVID-19 cases and report serious illnesses and multiple cases to Cal/OSHA and the local health department, as required
Employers are also required continue providing pay and benefits to employees excluded from work due to COVID-19 under some circumstances.
Cal/OSHA has a Model COVID-19 Prevention Program for employers to use.
For more information, see the DIR’s FAQ on the new ETS and the DIR’s COVID-19 Prevention Emergency Temporary Standards webpage HERE.
California Employers’ 9-Step Compliance Blueprint For New Cal/OSHA COVID-19 Safety Standard
EDC Partners Nicole Kamm and Hannah Sweiss, attorneys from Fisher Phillips LLP, recently conducted a two part webinar regarding these immediate changes. To access the video recordings, follow the links below. Part 1 will require the password listed below.
Fisher Phillips Webinar PART 1: CLICK HERE
- Password: mzdK&5s$
COVID-19 Testing Sites
For an updated list of countywide COVID-19 testing locations and hours, please visit:
The best way to keep our businesses open continues to be to:
- Wash your hands frequently, avoid touching your eyes, nose, and mouth with unwashed hands
- Self-isolate if you are sick
- Practice physical distancing
- Wear a clean face covering when in contact with others from outside your household
Avoid participating in group/private gatherings with others from outside your household (group gatherings continue to be a high-risk activity)
- Make a plan to get tested regularly
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