We want to alert clients to the provision in the American Rescue Plan Act of 2021 which creates a 100% COBRA premium subsidy available from April 1 until September 30 for group health plan participants who have lost their coverage due to an involuntary termination of their employment or a reduction in hours. The COBRA subsidy applies to any group health plan subject to the federal COBRA laws as well as to group health plans subject to state “mini-COBRA” laws. Thus it can apply to large as well as small employers.
After being the focus of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (EAA) of the Consolidated Appropriation Act of 2021 (CAA), the Paycheck Protection Program (PPP) is only a small part of the American Rescue Plan (ARP) that the president signed on March 11. The ARP adds $7.25 billion in additional funding to PPP but does not extend the PPP's current application period or deadline of March 31, 2021.
On October 6, 2020, Judge Thomas W. Thrash, Jr., Chief Judge for the Northern District Court of Georgia, held that an insurer was not obligated to cover losses two Georgia eateries sustained when they shuttered their dining rooms during the COVID-19 pandemic. Judge Thrash’s opinion is the first of its kind from any court in Georgia.
The Small Business Administration (SBA) recently released an Interim Rule that primarily affects sole proprietors.
There are approximately 3.57 million outstanding PPP loans of $50,000 or less, totaling approximately $62 billion of the $525 billion in PPP loans. Approximately 1.71 million PPP loans of $50,000 or less were made to businesses that reported having zero employees (presumably not counting the owner as an employee) or one employee.
On August 8, 2020, President Trump issued a Presidential Memorandum and Executive Order whereby the President directed the Secretary of the Treasury to allow for the deferral of the employee-portion of payroll taxes withheld under IRC Section 3101(a) (6.2% for Old-Age, Survivors and Disability Insurance) on wages earned during the period of September 1, 2020 through December 31, 2020 (“Deferral Order”).
Business Waits for No One, Certainly Not Negative Tests: New CDC Guideline Obviate the Need for Retesting
Based on previous guidelines and advice, many business owners are telling employees who have tested positive for COVID-19, to not return to work until they test negative. Sometimes, this means waiting weeks and even months. There are numerous reasons contributing to the problem. First, some patients test positive for weeks after full recovery and no longer being contagious. Second, scheduling a test is getting harder and results are taking longer and longer. Third, the tests being used are still unreliable, with the "quick" ones having the highest rates of false positives and false negatives. In the meantime, businesses are seeing an uptick in business, but cannot fulfill orders or client needs because they have no workers. Some have even had to shut down. It is very surprising, then, that the CDC's new guideline saying a negative test is not necessary has flown under the radar.
On June 26, 2020, the Georgia General Assembly passed the Georgia COVID-19 Pandemic Business Safety Act as one of the final bills to pass out of the legislature on the last day of the 2020 Legislative Session. The Act was written and considered in response to concerns of small businesses throughout Georgia concerning potential legal liability for COVID-19 claims against owners as the economy re-opens in Georgia. While this law has not yet been signed by the Governor, it is expected to be signed. The following is a summary of the highlights of the Act.
On June 3, 2020, the U.S. Senate passed the Paycheck Protection Program Flexibility Act which was previously approved by the House of Representatives on May 28, 2020. The Flexibility Act was written and considered in response to concerns raised by Payroll Protection Program (PPP) loan borrowers. While this law has not yet been approved by the President, it is expected to be signed without change. Once signed by the President, we anticipate the Small Business Administration (SBA) and Department of Treasury will issue guidance pertaining to the Flexibility Act, including a new form forgiveness application. The following is a summary of the highlights of the Flexibility Act and resulting changes to the PPP provisions of the CARES Act.
The COVID-19 disaster has caused significant financial losses for many businesses and their owners. Whether a business is owned by a sole proprietor, or by a Limited Liability Company, Partnership, or S Corporation treated as pass-through entity for income tax purposes, or by an entity taxable as a C Corporation, there are opportunities for the business and/or its owner(s) to use current year business and investment losses to obtain refunds of taxes paid in prior years.
On May 22, 2020, the U.S. Small Business Administration (SBA), in consultation with the Department of Treasury, issued an interim final rule on review procedures and related borrower and lender responsibilities with respect to Payroll Protection Program (PPP) loans. This interim final rule provides information to borrowers who have received a PPP loan as to what to expect in the SBA’s review of an individual PPP loan and/or audit of a PPP loan. Additionally, the interim rule expressly states the SBA may review any size PPP loan issued under the PPP loan program at any time (and noting that borrowers must retain PPP documentation for six (6) years after the date the loan is forgiven or repaid in full) and provides information as to what the SBA may review.
- Teresa E. Adams
- Deborah A. Ausburn
- James Balli
- Brandie M. Barrows
- Scott G. Blews
- Jonathan D. Crumly Sr.
- Julian A. Fortuna
- Randy C. Gepp
- Katie Heron
- Mitzi L. Hill
- Bryan F. Jacoutot
- Donald S. Kohla
- Lauren Parsons Langham
- Catrina Markwalter
- Lauren Marlow
- Jan G. Marsh
- LaTise Miller
- Christina L. Moore
- Jeffrey J. Nix
- Reginald L. Snyder
- Michele L. Stumpe