The PA loan program for business owners.

Greetings, clients and friends —

We hope that you are staying safe and not taking unnecessary risks, following the rules laid down by Gov. Wolf and the suggestions of the CDC and other medical organizations.

We received word from State Senator Bob Mensch’s office that a new COVID-19 relief program is available for business owners. Please look to see if you might benefit from this new effort on the part of the Commonwealth.

The Pennsylvania Industrial Development Authority sponsors the COVID-19 Working Capital Access (CWCA) program, now available through a Certified Economic Development Organization (CEDO) serving in each county. The program offers three-year loans to businesses in Pennsylvania that are adversely impacted by the COVID-19 outbreak.

Loans will be for three years on a 12-year amortization schedule, with no payments due during the first 12 months. Principal and interest, if applicable, will be due according to the amortization schedule in years two and three with a balloon payment at the end of the three-year term. Agricultural producers will have a 2% interest rate, and other businesses will have a rate of 0%. The maximum loan will be $100,000.

Visit the Department of Community & Economic Development webpage to learn the CEDOs in your county – https://dced.pa.gov/cedo/. Businesses in Lehigh County should contact Stephanie Wean, 610.266.2218, email is also an option on the website.

We constantly monitor developments in the world of coronavirus individual and business support. Our intent is to help you stay up-to date about the efforts of the various governments to help our community through this time of trouble and anxiety.

Please be careful and call or email us if you have any questions.

As part of our effort to keep everyone informed, we want to share some of the details of the Coronavirus payroll tax credit process so you can apply them in your business or share them with your employers.

As always, please heed the advice of the CDC and other health professionals as you go through each day. We look forward to all of us serving all of you for a long time!

On 18 March, the President signed the Families First Coronavirus Response Act (the Act). The Act provides for expanded paid sick and family leave. Small and midsized employers, those with fewer than 500 employees, will recover the cost of Coronavirus leave through a direct payroll tax credit.

On 20 March the US Treasury Department, IRS and the Department of Labor explained the process for claiming the payroll tax credit. Simply identify the applicable wages and health insurance costs paid to or for the affected employees and do not send those funds to IRS in payroll tax deposits. Instead, use the cash to pay the employees. The taxes that fall under tis credit program are withheld federal income tax, Social Security, and Medicare taxes. Social Security and Medicare taxes include both employee-paid and employer-paid taxes.

The Paid Sick Leave Credit

The amount of the credit is up to $511 per day for 100% of wages paid to employees on Corona virus-related leave or $200 per day (2/3 of normal wage) for employees caring for someone with Coronavirus or for children whose schools or care facilities closed due to the virus. The upper limit is 10 days or 80 hours of wages, $5,110 in the case of employees themselves or $2.000 for care-giving employees.

The credit for paid sick leave applies to an employee who is unable to work because of Coronavirus quarantine or self-quarantine or who has symptoms and is seeking a medical diagnosis, or in the case of child care, due to the closures already mentioned.

The Child Care Leave Credit

If an employee provides care for a child as described above, the $200per day credit will apply to an additional 10 weeks, or $10,000 in total,

Small Business Exception

Businesses with fewer than 50 employees will be exempt from the requirement that leave be granted to care-giving employees if the employer would jeopardize the business by granting leave. The news release stated that simple and clear criteria will be forthcoming to help with this particular decision.

Non-Enforcement Period

For 30 days, the Department of Labor will focus on helping employers comply with the Act and will not pursue enforcement action as long as employers act reasonably and in good faith.

Example

This example shows how straightforward the process is for claiming the credits, If an employer would normally pay a quarterly total of $10,500 in federal payroll taxes and in that quarter paid Corona-affected employees $3,500, the required payroll tax deposit total would be $7.000.

What a week and what a time in US history!

To Clients and Friends —

I will cut to the point – Governor Wolf ordered that “all non-life sustaining businesses in Pennsylvania close or face enforcement action.” That enforcement will go into effect 12:01am Saturday March 21, 2020. For this reason, we are not staffing our Allentown office after Friday March 20, 2020. Our staff is working remotely and it’s important that you know we will be serving our clients as earnestly as ever. If you were scheduled to meet in-person with a member of our team, we will be in touch shortly to reschedule that meeting to a phone call.  

Parallel to Governor Wolf’s order, Treasury Secretary Mnuchin announced “We are moving Tax Day from April 15 to July 15, all taxpayers and businesses will have this additional time to file and make payments without interest or penalties.”

What this means to our clients – in the middle of the tension and uncertainty, the tax world is back to normal but pushed back 90 days. If we completed your return and you have a balance due to the IRS, that payment is now due 7/15/2020. You do not need a new voucher or any additional forms, simply make payment on 7/15.  

If your return is not complete as of this email, there is no further action required on your part. Tax Day is now 7/15/2020 and we will continue working on your returns.  As usual, a member of our team will contact you with any questions/information requests.  

We will work as diligently as we can under these new circumstances and your patience is appreciated. It is our responsibility to file your return on time and we will do so. This environment is changing by minute – there are new tax credits, stimulus payments, loan forgiveness among a host of other items in discussion and we update our Emergency Tax Updates webpage as information becomes available.

We at Werner & Company CPAs stand with our community to keep everyone safe and end the spread of COVID-19. Stay safe, everyone – and thank you for the trust you have placed in us. We are confident by working together we will overcome this.

Sincerely,
Kristofer DePaolo, CEO

The Senate Passes COVID-19 economic relief package to combat pandemic.

On Wednesday 18 March 2020, the US Senate passed an economic stimulus plan designed to help employers cushion the impact of the COVID-19 outbreak on themselves and their employees. The act expands the Family and Medical Leave Act and introduces specially designed paid sick leave, covering employees who are sick with the virus as well as those serving as caregivers for others with the virus. This act provides two payroll tax credits for businesses with fewer than 500 employees effective April 2, 2020. In addition to the credits described below, the act includes free virus testing, expands unemployment insurance and provides food assistance to those affected by the virus.

Sick Leave Credit – this credit is for eligible employees that are taking sick leave because the employee is:

• Subject to a federal, state or local quarantine order related to COVID-19:
• Advised by a health care provider to self-quarantine due to COVID-19;
• Experiencing COVID-19 symptoms and seeking medical diagnosis;
• Providing care for an individual subject to a federal, state or local quarantine order or advised by a health care provider to self-quarantine due to COVID-19 concerns;
• Caring for the employee’s child if the child’s school or place of care is closed or the child’s care provider is unavailable due to public health emergency; or
• Experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

The credit cannot exceed $511 per employee per day and is limited to 10 days or 80 hours of sick pay leave. It remains in effect for wages paid through December 2020. The employer cannot use this credit in connection with wages for which the employer is currently receiving the employer credit for paid family and medical leave enacted by the Tax Cuts and Jobs Act.

Self employed individuals also qualify for credit up to the lesser of the self-employment tax on their average daily self-employment income or $511 per day if caring for themselves and $200 if caring for a family member. This credit limit is also 10 days.

On a quarterly basis, the credit is limited to the total tax liability on the employer portion of the social security payroll tax. In certain circumstances the credit can be refundable.

Emergency Family & Medical Leave Expansion Act – The Act amends and expands the family and medical leave act (FMLA) temporarily. Currently only employers with 50 or more employees were covered under FMLA. This change now covers employers with less than 500 employees. Any individual employed by the employer for at least 30 days (before the first day of leave) may take up to 12 weeks of job-protected leave. Employees who meet any of the following circumstances qualify:

• Quarantine because of exposure or symptoms related to COVID-19;
• Provide care to a quarantined family member;
• Provide care for child younger than 18 whose school or day care has closed due to COVID-19

We are making every effort to stay on top of this very fluid situation. Please call or email with questions you may have, info@wernercpa.net or 610.770.9236.

We would first like to extend our heartfelt wishes that you and your families are as well as can be expected in these times.

To our clients and friends —

Our hearts especially go out to anyone directly impacted by the virus and all healthcare professionals who are battling on the front lines.

At Werner & Co CPAs we are doing our part to help “flatten the curve” and are looking out for our employees and the general well-being of our nation. We are assessing the situation daily, remaining vigilant, and following all recommendations from the World Health Organization (WHO), U.S. Centers for Disease Control and Prevention (CDC), and local authorities.

On Tuesday March 17, 2020, Treasury Secretary Steven Mnuchin announced taxpayers and businesses will have until July 15, 2020 to pay any unpaid 2019 taxes. All estimated taxes for first quarter 2020 are also delayed until July 15, 2020. All individual U.S taxpayers and businesses qualify for this extension to pay.

What does this mean for you and your tax return – Tax Day remains at April 15^th, 2020. To serve you and make sure we continue to deliver the quality, excellence and timeliness you expect from us. If you have a balance due, we will file for an extension by April 15, 2020. You will then have until 7/15/2020 to make your tax payment. If you are due a refund, we are working vigorously on completing your tax return by the 4/15 deadline. This extension to pay does not impact refunds, refunds are still being paid.

If you are receiving this message and your return has been completed with a balance due, you need not send the payment until 7/15/2020. Nothing needs to be changed on the return or the voucher you have in hand. Simply write the check and mail it by July 15.

If you have specific questions, please feel free to call or email our office. This environment is changing quickly. Next up will be the stimulus package being discussed in the Senate. That will look to provide employers and taxpayers with aid in the form of SBA financing, payroll tax reductions, and direct stimulus payments among other things.

We thank you for your patience and continued trust while we adapt to this everchanging landscape. This pandemic will challenge us all but working together I know we will be successful in navigating this crisis.

We will keep you apprised as things change, in the interim please stay safe.

— Kris DePaolo, CEO