The IRS has issued new guidance around the usage of the deferral provision of the CARES Act and how it relates to scenarios where you are also using the Employee Retention Credit portion of the CARES Act.
Alternatively, their is clarification around an employer deferring their Social Security portion of FICA and applying and receiving the PPP loan and then applying for forgiveness. Take note!
This is much needed clarification around two major parts of the CARES Act that will be used in the months ahead.
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"Employment Tax Return Filed by a Third-Party Payer If you’re the common-law employer of the individuals that are paid qualified sick or family leave, or wages qualifying for the employee retention credit, you’re entitled to the credit for the sick and family leave wages or the employee retention credit, regardless of whether you use a third-party payer (such as a payroll service provider, professional employer organization (#PEO), certified professional employer organization (#CPEO), or Section 3504 Agent) to report and pay your federal employment taxes.
Be sure to talk with your PEO about processes they are putting in place to help you with the Payroll Tax Deferral portion of the CARES Act.
The legislation stipulates, as the customer, you will be solely responsible to make payments to the IRS by the applicable dates.
Important provision in the CARES Act allows for penalty-free withdraws from #qualifiedretirementaccounts and provisions for paying income taxes on those monies over three years.
In addition, you will be given three years to put those monies back!
This will end up getting huge usage if the economy stays shut down!
Our auditors dug deeply into McConnell’s Senate bill and compared it to Pelosi’s House bill. While half the nation was “sheltered in place,” here’s what lawmakers — in both parties — considered “essential spending” for coronavirus recovery:
Guidance coming from the National Association of PEOs should alleviate concerns from small businesses using a PEO or considering reducing their overall labor spend by engaging with a PEO.
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