On Saturday, we let you know that a provision in the Family First Coronavirus Response Act requires you to provide paid leave to employees. This new mandate starts on Wednesday, April 1. We know many small business owners are worried, and we want to let you know about ways for you to get assistance in running your business while you make these payments.
You will get your money back – 100% – from the government – Leave payments will be refunded to you 100% through payroll tax refunds or tax credits. ADP or Payality will handle this for you so you can use these credits to pay wages. They will answer your questions if you need help. Also, we have arranged for Ryan Tax Advisors to provide support at no cost to you. (See below.)
There is a lot of government assistance available to you now.
1. Delay the payment of employer payroll taxes – this provision allows employers to delay the payment of federal payroll taxes for the next 9 months. Your payment is 50% in 2021 and 50% in 2022. Contact your payroll provider today for help.
2. Get $10,000 fast through a disaster relief loan (“Economic Injury Disaster Loans”) – Franchisees can borrow directly from the SBA and receive a $10,000 cash advance within approximately 3 days of applying. You can apply for more money depending on your needs. The $10,000 advance CAN BE FORGIVEN by the SBA so long as you use the money for certain business purposes. We hired a consulting firm to help you apply for these loans.
3. Get more money for the long run – Paycheck Protection Program – This program is still developing, but here is what we know. Under this plan, businesses will be able to get loans equal to 2.5 times their payroll. Most major banks are SBA qualified and are racing to make on-line resources available to loan applicants. There will be an expedited approval process and easier eligibility requirements. The loan balances are reduced by the amount that the borrower/small businesses pay in payroll until December 31, 2020. Interest on the loans will be capped at 4% and they will carry a ten-year term. We are waiting for the Department of Treasury to release eligibility guidelines for these loans, which should happen any day now.
Help is available to you for all of these issues. Your payroll provider—ADP or Payality can help you with payroll and payroll tax issues. Ryan Tax Advisors is also available to you for assistance with tax issues plus questions about the loans we have described. All at no cost to you.