OFF THE RECORD
SPECIAL COVID-19 ALERT
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Dear Clients and Friends!
There have been a number of important COVID-19 related developments in recent weeks that might impact you as a business owner or an individual.
As you probably know, Governor Hogan lifted the stay-at-home order, effective 5:00 PM on Friday, May 15th. Even though we know we are all "Safer-at-Home", many businesses are busy preparing for employees to return to the workplace. To this end, we have included a link to a manual that we created ---
COVID-19: The Employer's Guide to Returning to the Workplace ---
which we hope will help facilitate this unprecedented process
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Please see below to download a copy.
And, remember, you can always reference our dedicated COVID-19 section on our website for important updates and links to prior alerts and newsletters. This page can also be easily accessed from our homepage at
www.darslaw.com
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Please continue to stay safe and healthy.
Very truly yours,
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Paul G. Skalny
Managing Director
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For Businesses, Entrepreneurs & Organizations
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MARYLAND'S ROADMAP TO RECOVERY AND
WHAT IT MEANS FOR EACH COUNTY
On May 13, 2020, Governor Hogan announced that Maryland has entered Stage One of Governor Hogan’s Roadmap to Recovery. Stage One lifts the Governor’s stay at home order and moves to a gradual reopening of low risk activities such as retail, manufacturing, houses of worship and personal services. Retail and houses of worship may reopen up to 50% capacity. Stage One continues to emphasize social distancing, good hygiene and limits gatherings to 10 or less persons. Restaurants and bars remain open to carry out and delivery only. Senior centers, fitness centers, malls and theaters remain closed.
In addition, Governor Hogan’s Order provides a local community-based approach allowing each county to decide independently as to whether to reopen their local jurisdictions. Most counties did move to Stage One in accordance with Governor Hogan’s Executive Order, with some counties choosing to remain closed.
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CLARIFICATION REGARDING
LOAN CERTIFICATIONS FROM THE SBA
On May 13, 2020, the Small Business Administration (SBA) issued new guidance to address the confusion created by its previous guidance which suggested that the recipients of Paycheck Protection Program (PPP) loans would need to revisit their applications to determine whether they would still be able to certify in good faith that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Borrowers who deemed themselves unable to make the certification in good faith had until May 14
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to return the funds without consequence. That date has now been extended to Monday, May 18
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The new guidance should provide comfort to the recipients of PPP loans of all sizes. According to the new guidance, any recipient of a loan less than $2 million will be deemed to have made the required certification regarding the necessity of the loan in good faith. Recipients of loans over $2 million are still likely to face increased scrutiny, but if the SBA determines that the borrower lacked an adequate basis for the required certification, it will notify the borrower. As long as the borrower repays the loan after receiving notice, the SBA will not pursue any further enforcement activities.
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GUIDANCE ON PPP LOAN FORGIVENESS
As many Paycheck Protection Program (PPP) loan borrowers approach the end of their eight-week “Covered Period” which began when they received their PPP loan proceeds, the Small Business Administration (SBA) has finally released its initial long-awaited guidance on loan forgiveness. On Friday, May 15
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, the SBA issued a Loan Forgiveness Application which borrowers must submit to their lenders to apply for forgiveness of the loan. The Application includes a Loan Forgiveness Calculation Form, a schedule and worksheet to calculate eligible payroll costs, and an optional borrower demographic information form.
The instructions accompanying the Loan Forgiveness Application contain answers to some of the most pressing questions that borrowers and their advisors have had about the program. The following are some of the key issues addressed by the Application and instructions:
- While the eight-week “Covered Period” technically began ticking on the day the loan proceeds were disbursed, borrowers can choose to calculate eligible payroll costs using an “Alternative Payroll Covered Period” - the eight-week period beginning on the first day of their first pay period following the disbursal of the loan proceeds. The example given in the instructions is that if a borrower received its PPP loan proceeds on Monday, April 20, and the first day of its first pay period following the loan disbursement is Sunday, April 26, the first day of the Alternative Payroll Covered Period is April 26 and the last day of the “Alternative Payroll Covered Period” is Saturday, June 20.
- Payroll costs eligible for forgiveness include the costs incurred during either the “Covered Period” or the “Alternative Payroll Covered Period.” Payroll costs are considered paid on the day that paychecks are distributed or an ACH credit transaction is originated, and are considered incurred on the day that the employee’s pay is earned. Costs incurred but not paid during the borrower’s last pay period of the Covered Period or Alternative Payroll Covered Period are eligible for forgiveness if paid on or before the next regular payroll date. Otherwise, payroll costs must be paid during either the Covered Period or the Alternative Payroll Covered Period. This means that loan forgiveness will not apply to payroll costs incurred prior to the Covered Period or Alternative Payroll Covered Period, and will not apply to the extent that payroll costs are prepaid for periods after the Covered Period or Alternative Payroll Covered Period.
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COVID-19: THE EMPLOYER'S GUIDE TO RETURNING TO THE WORKPLACE
As employers begin to consider what a return to the workplace might look like, there are a myriad of issues to ponder. To assist you with this process, we are pleased to provide you with
COVID-19: The Employer's Guide to Returning to the Workplace
. In this publication, we provide some best practices for you to consider as you face these unprecedented times and as you begin to resume normal business activities.
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For Individuals & Families
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WHAT TO DO WHEN YOU RECEIVE A
STIMULUS CHECK FOR THE DECEASED
Millions of Americans have received stimulus checks in the past few weeks based on their 2018 or 2019 income tax returns. However, the IRS clarified last week that if an individual died before receiving his or her payment, the payment must be returned. For married taxpayers who received a joint stimulus check, if one taxpayer is deceased, half of the stimulus check must be returned.
So how do you return the stimulus payment for someone who died before receiving it? If a paper check was mailed to you, there is a box on the envelope you can check to indicate that the taxpayer is deceased. If you threw out the envelope, you can simply write “void” on the back of the check and send it to the appropriate address. Addresses are based on the state of residence of the decedent and can be found
under question Q52.
If the decedent received a direct deposit to a bank account or you already cashed the paper check, you should submit a personal check or money order made payable to “U.S. Treasury” to the appropriate address and write “2020EIP” and the social security number of the taxpayer in the memo section. You should also enclose a letter stating that the taxpayer died before receiving the check and that is why you are returning it to the Treasury.
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