Author: broekhuiscpa

COVID-19 – Small Business Resources

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Below are links to resources to help guide decisions regarding employment and compliance during COVID-19. We encourage you to speak with the following to review your particular circumstances:
  • attorney
  • health insurance provider
  • lending institutions

The below is intended for informational purposes only, and shall not be construed as legal advice or the legal opinion of Jerry L. Broekhuis CPA, LLC.

Unemployment Insurance
**IMPORTANT** Prior to laying off employees, contact your health insurance provider to understand the provisions of your policy and the impact temporary layoffs will have on covered employees. 

Apply for Unemployment Insurance
1) Online (Preferred.The best time to apply is during non-peak hours 8:00 PM – 8:00 AM)
2) Call 1-866-500-0017
Employees are not eligible for unemployment benefits if they are currently receiving vacation or sick pay at their normal rate of pay. If you provided a severance/bonus as part of the layoff, these also may disqualify the employee. It is encouraged to classify layoffs as a temporary leave and not a termination. Employers unemployment insurance accounts will not be charged for layoffs pertaining to COVID-19 per Executive Order 2020-24.
NOTE: Obtain up to date contact information
Work Share
Program that allows workers to have reduced hours (essential businesses) and also receive partial unemployment benefits. Hours must be reduced between 15% and 45%. All employees in a unit (two or more employees) or specified department must participate.
Questions? Call 1-844-967-5747
Information on Work Share
Fact Sheet 

Michigan Unemployment Insurance Tax — currently, still due April 25th

If you cannot file, you may request a waiver through your MiWAM account. Or, you may be eligible for Apportionment (25 employees or less). Apportionment allows you to spread your 1st Quarter payment over all 4 quarters.

Families First Corona Virus Response Act
Applies to businesses with fewer than 500 employees. There is an exemption for employers with less than 50 employees that can prove compliance to the FFCRA would jeopardize the viability of the business. NOTE: This is not an automatic exemption. The burden of proof is on you as the employer. You will need to document and
Applies to leave taken between April 1, 2020 and December 31, 2020. Any layoff prior to April 1 due to lack of work or government ordered closure is not covered by FFRCA. Instead, encourage laid off employees to file for unemployment insurance.
 Generally, the Act provides that employees of covered employers are eligible for:
  • Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or
  • Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State, or local government order or advice of a health care provider), or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor; and
  • Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.
Tax credits: “Covered employers qualify for dollar-for-dollar reimbursement through tax credits for qualifying wages under the FFCRA” Health insurance costs included. Please review wage caps, etc.
Questions & Answers **Important**
 
CARES Act

The CARES Act passed the Senate and House of Representatives. The Act has some of the following highlights (taken from The Tax Adviser)

  • Payroll Tax Credit Refunds – advanced refunding from FFCRA.
  • Employee Retention Credit for employers that close to due COVID-19
  • Payroll Tax Delay: Delays payment of 50% of 2020 employer payroll taxes until 12/31/21 and 50% due 12/31/22
In addition, the Act provides loan relief for Small Businesses and expanded unemployment insurance benefits $600 in addition to states previous benefits (for four months).

 

 

 

COVID-19 – Individual Tax Implications

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Below are a few COVID-19 related tax return implications. We are monitoring the ever-changing tax landscape and will update you as appropriate.
 
 
 
1) Michigan Governor Gretchen Whitmer extended the Michigan income tax filing and payment deadline to July 15th (Executive Order 2020-26). Also extended are Michigan Cities income tax returns to July (now due on the 15th or 31st depending on their original filing dates). This parallels the Federal government extending the tax filing and payment deadlines to July 15th. The extensions are automatic – nothing needs to be filed to qualify.
 
2) 1st Quarter estimate payments are now due on July 15th for both Federal and Michigan. However, the 2nd Quarter payments are currently still due on June 15th.
 
3) The IRS extended 2019 contributions to Traditional IRA and Health Savings Accounts to July 15th.
 
4) If you receive unemployment compensation due to COVID-19, the compensation is taxable. You may elect to have Federal and Michigan withholding on any compensation that you receive.
 
5) With the passage of the CARES Act, there is a suspension of Required Minimum Distribution (RMD) for retirement plan withdrawals for 2020. Taxpayers, regardless of age, may also withdraw up to $100,000 from retirement accounts without the 10% early withdrawal penalty for 2020 for coronavirus-related reasons (medical or adverse financial impacts due to quarantine, layoffs, work hour reduction, etc.). Taxes on these withdrawals can be avoided if the money is returned to the account within three years. If you are unable to fully repay the withdrawal, taxes may also be spread across three years. Please consult with your financial advisor if you are considering a retirement account withdrawal.
 
6) The CARES Act also provides stimulus checks of $1,200 for individuals ($2,400 per couple) and $500 for each qualifying child. The payments begin to phase out for those with adjusted gross incomes above $75,000 ($112,500 head of household and $150,000 for married filing jointly).
 
7) Another provision is a charitable contribution deduction (not to exceed $300). This is an “above the line” reduction in income over and above the standard deduction for qualified charitable contributions.