Today begins my fourth week of advising business clients about legal issues related to the Covid-19 pandemic from my home office while trying to homeschool my three daughters. The silver lining in all of this has been spending more time with my daughters. I have been particularly enjoying our evening walks. It has been heartbreaking though to hear the struggles of my businesses clients trying to survive the pandemic. I also have been thinking about my RWN friends and how this must be affecting all of you and your clients. I want to make sure that you are all aware of the new legislation that may benefit you or your clients.
Pandemic Unemployment Assistance
The Coronavirus Aid, Relief, and Economic Security Act that was signed into law on March 27, 2020 (the “Cares Act”) provides enhanced unemployment benefits to workers that are impacted by Covid-19 (“Pandemic Unemployment Assistance”). Click here for more information about the enhanced unemployment benefits provided under the Cares Act. As you are probably aware, prior to the Covid-19 pandemic, most self-employed individuals working in New York State were not entitled to unemployment insurance benefits. However, the Cares Act provides Pandemic Unemployment Assistance for self-employed individuals who would normally not be eligible for regular unemployment benefits but are unable to work because of Covid-19 until December 31, 2020. Click here for information on how to apply.
Care Act Loans
The Cares Act also created the Paycheck Protection Program (“PPP”) that provides loans to employers to cover payroll and other specified expenses. PPP loans will be fully forgiven for borrowers who maintain their payroll through the Covid-19 emergency. The Cares Act also created the Economic Injury Disaster Loan Emergency Grant (“EIDL”) of up to $10,000. Click here for more information about the PPP and EIDL programs. Sole proprietors, independent contractors and self-employed individuals are all eligible to apply for PPP and EIDL loans although guidance issued recently by the IRS indicates that independent contractors and self-employed individuals must wait until April 10, 2020 to apply for the PPP loan.
Tax Credits for Paid Leave
President Trump signed the Families First Coronavirus Response Act (“FFCRA”) into law on March 18, 2020. The FFCRA, which went into effect on April 1, 2020, requires certain employers with fewer than 500 employees to provide up to two weeks of paid sick leave and up to ten weeks of paid expanded family and medical leave to employees for specified reasons related to COVID-19. The FFCRA covers the cost of paid leave by providing fully refundable tax credits to employers. Click here for more information about the FFCRA.
Eligible self-employed individuals who would be entitled to receive qualified sick leave wages or qualified family leave wages under the FFCRA if he or she were an employee of an employer that is subject to the requirements of the FFCRA are entitled to receive an income tax credit to offset their federal self-employment tax. The self-employed individual may reduce payments of estimated income taxes that he or she would otherwise be required to make to fund the sick leave and family leave. Click here for more information related to the tax credits available to self-employed individuals for COVID-19 leave.
Note: This publication is intended as an information source for clients, prospective clients, and colleagues and constitutes attorney advertising. The content should not be considered legal advice and readers should not act upon information in this publication without individualized professional counsel.
Amy L. Varel, Esq. is a partner in the law firm of McConville, Considine, Cooman & Morin, P.C., where her practice is concentrated in the areas of general business counseling, contract preparation, review and negotiation, business purchases and sales and planning for and the formation of corporations, limited liability companies, partnerships and not-for-profit organizations. Amy can be reached at email@example.com.