Small Business Resources during the COVID-19 Situation

Edited 4/1/20

Your Employees

·         If your employees cannot work due to illness or other issues related to the Coronavirus:

New Families First Coronavirus Response Act (FFCRA) requires certain employers to provide their employees with sick leave or expanded family/medical leave for specified reasons related to COVID-19.  This applies to all employers with fewer than 500 employees, however, employers with fewer than 50 employees may qualify for exemption from parts of this requirement.

o   You can find details here https://www.dol.gov/coronavirus

O And an FAQ here https://www.dol.gov/agencies/whd/pandemic/ffcra-questions

o   Note that if you are required to make payments to employees under this Act you are allowed to take credits against your Federal employment tax payments.

·         If you have to lay off your employees:

o   They can file for unemployment.  See Fact Sheet here for further information that you can give to them https://files.nc.gov/des/documents/Downloads/filing-for-unemployment-due-to-covid-19-tip-sheet_mar26.pdf.  Note that the state of NC is currently waiving the requirement that in order to receive unemployment benefits an unemployed person looks for work each week.

o   Per the NC DES website an employer’s account won’t be allocated charges related to employees who were paid benefits for reasons related to COVID-19.  This is to avoid an increase in your unemployment tax rate due to employee unemployment claims.  Be sure to tell laid off employees to indicate that the layoff was due to Coronavirus when they complete their unemployment application.

o   If you were providing health insurance to your employees there may be options for them to continue their coverage during the layoff period and later if you rehire them.  You should discuss these issues with your health insurance provider or agent.

o   Be sure to look at your employment agreement to see if you are required to make any payments at the time of layoff such as accrued paid-time-off.

o   In the case of business owners who have been receiving a W2 and are now not working, it is possible that they can also apply for unemployment.  If you are in this situation, call the DES at 888-737-0259 to discuss your situation.

·         We recommend that you discuss the impact of any changes in your employee hours or benefits with your attorney to ensure that you are properly complying with wage and hour rules.

Cash Flow

·         Do what you can to preserve your cash – look ahead and project cash flow needs as much as possible, accelerate client billing, accept credit card/online payments if you don’t already do so, hold off or reduce inventory and capital purchases, cut or postpone nonessential expenses, restructure or reduce payroll, etc.

·         You should not defer making payroll tax payments or sales tax payments.  There can be significant penalties related to paying these late.

·         If you need additional funds:

o   Consider if personal funds are available from personal investments or family and friends.

o   Consider a home equity loan, personal loan, or traditional business loan/line of credit.  Contact your banker to discuss your options here.

o   The SBA is offering some resources including an economic injury disaster loan program.  Information is available here https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources.  ***Please see additional updated information here

o   Credit cards can be an option but be careful of high interest rates that can add it to significant dollar amounts quickly.

o   If you are considering taking money from your retirement plan please contact our office to discuss before you do this.

Tax

·         Both the IRS and the NC Dept. of Revenue have extended the due date for filing returns and paying the related tax from 4/15 until 7/15 without penalty.

o   If you anticipate getting a tax refund, go ahead and file now and get these funds as soon as possible.  There’s no benefit to delaying in this case.

o   This is an automatic extension – you don’t have to file a form to take advantage.

o   This extension also applies to the first quarter 2020 estimated tax payment.  Note that this means that if you take advantage of this deferral you will make quarterly estimated tax payments in both June & July this year.

o   The extension does not apply to business-related tax payments for sales tax and payroll or the due date of the quarterly payroll tax reports due 4/30/20.

o   The extension does apply to IRA contributions and HSA contributions normally due 4/15.

o   The extension will also impact payments on Federal installment payment agreements.

o   NC currently cannot waive interest on deferred payments of 2019 taxes or 2020 estimates.  Unless they change this rule, you may pay a small amount of interest if you pay your NC payments after 4/15.

o   For state taxes, each state separately determines filing and payment deadlines – if you file in a state other than NC, please contact our office so we can help with determining these for you.

Resources

·         Federal Dept of Labor Coronavirus Resources https://www.dol.gov/coronavirus and here https://www.dol.gov/agencies/whd/pandemic

·         NC Dept of Employment Security COVID-19 Information https://des.nc.gov/need-help/covid-19-information