The federal government has created some programs to help businesses and their employees during the COVID-19 crisis.
There’s now a central place in Justworks you can look to for information on COVID-19 government relief opportunities.
COVID-19 relief is a new section of Justworks where you can:
- Learn more about the various government relief programs your business may be eligible for
- Navigate to all of the CARES Act and FFCRA relief programs your business can set up directly in Justworks
- Read our latest help articles and blog posts on COVID-19 government relief programs
You can access COVID-19 relief on the top of your left navigation panel.
New information is coming day by day. Be sure to check back frequently for updates as we build out new features and receive new guidance from the Department of Treasury, IRS, and Small Business Administration.
Navigating the CARES ACT
The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides eligible small businesses with various loan and tax relief opportunities. There are a few ways these programs can be applied to your business, subject to the varying eligibility requirements of each program. Importantly, eligible employers cannot take advantage of all of these programs, however, based on changes under the PPP Flexibility Act of 2020, employers can now take advantage of the Social Security tax deferral provision under section 2302 of the CARES Act through the end of 2020, regardless of whether they obtain a PPP loan or if they obtain forgiveness under a PPP loan.
Read on for more information on each option.
Loan and Loan Forgiveness
Paycheck Protection Program (PPP)
As part of the CARES Act, the Paycheck Protection Program (PPP) aims to help you keep your people employed and on payroll.
Eligible small businesses (fewer than 500 employees, per the Small Business Administration) can borrow up to 250% of their average monthly payroll, up to an aggregate total of $10 million, in order to sustain their business.
Learn more about the Paycheck Protection Program Report available in Justworks.
Once you calculate that amount, fill out this application form and follow your bank’s instructions on how to apply.
Social Security Tax Deferral
Another program under the CARES Act allows eligible small businesses to temporarily defer payment of the employer share of Social Security taxes.
This means thatCompanies can defer their portion of Social Security taxes from March 27, 2020 through December 31, 2020. Your business would be required to pay back the deferred taxes in two installments, 50% due by December 31, 2021, and the remaining amount by December 31, 2022.
Once you opt into the deferral, you will start seeing credits for the employer-paid Social Security taxes on your subsequent invoices.
Learn more about how this tool works in Justworks.
Employee Retention Tax Credit
This program is designed to encourage businesses facing economic hardship related to COVID-19 to keep employees on their payroll by providing tax credits up to $5,000 per eligible employee. To opt in, companies must be facing a complete or partial closure or a significant decline (at least 50%) in gross receipts. The scope of employee eligibility varies depending on company size: companies with 100 or fewer employees can claim credits based on the wages for their entire workforce; companies with more than 100 employees may only claim credits for wages paid to employees who are not providing services due to the foregoing economic reasons
Businesses cannot opt into this program if they participate in the PPP.
Learn more about how to claim credits in Justworks.
Navigating the FFCRA
Signed into law on March 18, 2020, the Families First Coronavirus Response Act temporarily mandates covered employers to provide eligible employees with paid sick leave and paid family and medical leave for certain qualifying reasons related to COVID-19. The FFCRA allows employers to claim payroll tax credits to cover the cost of this required leave. The FFCRA is effective April 1 and expires December 31, 2020.
Learn more about scheduling FFCRA leave in Justworks and claiming related tax credits.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.