We are delighted to hear that several of our clients have received approval of PPP loans. While the program reached its funding limit on April 16, we hope that Congress authorizes additional funding. Many lenders are still accepting applications in anticipation that the program will continue. Check your bank's website for details.
We want to keep you up-to-date on the relief programs available to employers.
Two provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act intended to enable employers to keep employees on the payroll are the
Paycheck Protection Program
(an SBA-guaranteed loan) and the
Employee Retention Credit
(a payroll tax credit).
You cannot take advantage of both.
Here is a
chart
comparing the two programs.
To decide which program is right for you, consider the following:
- Your eligibility
- How many employees you have
- How much you are eligible for under both relief measures
- What you need funds for
How do these programs sync with the FFCRA for employee sick leave or PFML?
The Families First Coronavirus Response Act (FFCRA) lets employers who provide
coronavirus paid leave
receive a tax credit for the amount of the paid leave wages.
You can apply for the Paycheck Protection Program loan and claim the FFCRA paid leave credit. You can also claim both the Employee Retention Credit and the paid leave tax credit.
However, you cannot double-dip.
If you choose to take the Employee Retention Credit and the paid leave credits, you can’t claim those credits on the same wages. Because you can only claim the paid leave credits on paid leave wages, you cannot claim the Employee Retention Credit on FFCRA paid leave wages.
And if you receive a Paycheck Protection Program loan and claim paid leave credits, the paid leave wages do not count as eligible “payroll costs” under the PPP’s loan forgiveness. Because you claim the paid leave credit on FFCRA paid leave wages, do not count FFCRA paid leave wages as payroll costs when asking for PPP loan forgiveness.
Here is a
guide for small businesses about the loan program.
For past emails from us regarding Covid-19 programs, see our
blog.
If you need assistance, or additional payroll reports including a Payroll Expenses report by month, please reach out to your Payroll Specialist.
If you use Employer on the Go, you can generate the reports yourself from the Report Wizard.
We wish you and your families continued good health. We will get through this together.
Leslie, Greg, Judy, Melissa
