State and Federal Government COVID-19 Relief for Businesses
by Martin Pringle attorney Karlee Canaday
Coronavirus and COVID-19 have changed almost every aspect of our daily routines and behavior. Unfortunately, the changes that are crucial to flatten the curve and mitigate the immediate public health crisis, like social distancing, reducing travel, avoiding crowded areas, working remotely, and homeschooling, are also causing economic damage to businesses, big and small.
Federal, state, and local governments are rapidly coming out with advice, assistance programs, and proposals to combat the negative economic effects of this pandemic. The Small Business Administration (SBA) and Federal Emergency Management Agency (FEMA) offer some helpful resources for capital access and emergency planning exercises on their websites (click the links for more). The Treasury Department and IRS issued guidance allowing Federal tax filing and payment deferrals. Congress passed and President Trump signed the Families First Coronavirus Response Act. Governor Laura Kelly announced several new assistance programs for Kansas businesses. And, most recently, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), an economic relief package that may include direct payments to Americans under a certain income threshold, $200 billion in loans to airlines and distressed industry sectors, and $300 billion in forgivable bridge loans for small businesses.
Below is an overview of the new information and assistance available to businesses (as of March 27, 2020):
Notice 2020-18, Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic (extending Federal tax filing and payment deadline)
- On March 21, 2020, the Treasury Department and IRS restated and expanded the relief previously provided through Notice 2020-18. It provides that all Federal income tax filings and Federal income tax payments due for “affected persons” on April 15, 2020 are automatically postponed to July 15, 2020, with no limitation on the amount of the payment that may be postponed. “Affected persons” includes any person with a Federal income tax payment or a Federal income tax return due April 15, 2020. “Person” includes an individual, a trust, estate, partnership, association, company or corporation, as provided in Section 7701(a)(1) of the Code.
Kansas Executive Order #20-13, Allowing certain deferred tax deadlines and payments during the COVID-19 pandemic
- On March 23, 2020, Kansas Governor Laura Kelly signed Executive Order #20-13, extending the deadline for filing 2019 calendar year income tax returns to July 15, 2020. The deadline for filing 2019 fiscal year income tax returns with original due dates between April 15, 2020 and July 15, 2020 are extended to July 15, 2020. Payment due dates are also extended to July 15, 2020. The Order does not change anything related to estimated tax payments due April 15, 2020.
Missouri Department of Revenue 90-Day Extension to File and Pay Individual and Corporate Income Tax
- On March 21, 2020, Missouri Department of Revenue announced that it had extended the deadline for filing of income tax returns and payment of income tax to July 15, 2020. This relief will be automatically provided, without application or request. The relief also includes estimated tax payments for tax year 2020 that are due on April 15, 2020.
Families First Coronavirus Response Act (H.R. 6201)
- The Families First Coronavirus Response Act goes into effect on April 1, 2020 and applies to businesses with 500 or fewer employees. There are possible exemptions for businesses with fewer than 50 employees but no guidance yet has been issued as to how those will be requested or determined. The Act provides for 12 weeks of job-protected paid family leave for employees unable to work or telework because the employee is caring for their child due to closed schools and daycares. It also provides 80 hours of paid sick leave to full-time employees when they cannot work due to a COVID-19-related illness, symptom, or self-quarantine.
- To soften the blow on capital, however, the Act also provides a 100% refundable payroll tax credit to private-sector employers that are required to provide paid sick leave and paid family leave benefits. More detail on the FFCRA provisions for employers: https://www.martinpringle.com/news/view/what-employers-need-to-know-about-the-families-first-coronavirus-response-act
Governor Kelly’s Response to Economic Impact of Coronavirus in Kansas
- Governor Kelly said she expects Kansas to qualify for up to $2 million in low interest, disaster assistance loans from the SBA, which are available for businesses, private nonprofits, homeowners, and renters. The website for businesses to apply is: https://disasterloan.sba.gov/ela/.
- Additionally, rapid loan funds through the Kansas Department of Commerce through the Community Development Block program are available to provide assistance to businesses. David Toland, the Kansas Department of Commerce Secretary, has advised there are already $6.3 million in Community Development Block Grant funds available in 37 Kansas communities. Kansas has dramatically streamlined the process for local businesses to obtain these community funds and changed the wait time from 30 days to 24 hours.
- The State of Kansas also offered assistance through the Hospitality Industry Relief Emergency (HIRE) fund. Eligible hospitality businesses in Kansas were able to apply for a one-time loan of up to $20,000 at 0% interest for a period of 36 months. Examples of hospitality businesses include: restaurants, bars, lodging, conference centers, and event centers. Due to overwhelming response, the initial HIRE funds have been allocated. The State is continuing to collection information on hospitality industry losses via the same initial application form.
- Gov. Kelly also announced a new extended limit for Kansans to receive unemployment from 16 weeks to 26 weeks. This limit will be extended again by the federal CARES Act, adding another 13 weeks to the available time period for a maximum of 39 possible weeks. (This additional time will be provided only through December 31, 2020.) The application for Kansas unemployment benefits can be found at: www.getkansasbenefits.gov
- Finally, Gov. Kelly signed Senate Bill 66, the state’s budget bill for Fiscal Years 2020 and 2021. The budget includes $65 million for COVID-19 response efforts in Kansas.
Coronavirus Aid, Relief and Economic Security Act (CARES Act)
- On March 27, 2020, Congress passed, and President Trump signed, a $2 trillion economic stimulus package intended to deliver critical aid to U.S. businesses and the public. The Act provides assistance to individuals and families, small and big businesses and industry, hospitals and other health care providers, and state and local governments.
- Under the Act, individual taxpayers who earned $75,000 or less in adjusted gross income in 2018 or 2019 would receive $1,200 each, with married couples earning up to $150,000 receiving $2,400, and an additional $500 per child. The payments reduce by increasing income level, phasing out entirely for individuals earning $99,000 or more and for married couples earning $198,000 or more.
- The bill will substantially expand unemployment benefits for the jobless, providing an additional 13 weeks of benefits and enhancement of state payments by $600 per week for a four-month period. For the first time, unemployment benefits will extend to self-employed individuals, freelancers and gig workers. Other individual benefits of the Act relate to suspended student loan repayment, suspended rental evictions, and broadened loan and withdrawal capacity from retirement accounts for those affected by COVID-19.
- The Act also provides $377 billion in federally guaranteed loans and grants to small businesses and establishes a $500 billion government lending program for larger distressed companies reeling from the crisis, including airlines and hospitals.
- We are awaiting further guidance from all agencies involving with the stimuli included in the CARES Act and will relay that information here as soon as it is available.