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.
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 by March 31, 2021.
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 that companies could 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.
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 $7,000 per eligible employee per quarter. To opt in, companies must be facing a complete or partial closure or a significant decline (at least 20%) in gross receipts. The scope of employee eligibility varies depending on company size: companies with 500 or fewer employees can claim credits based on the wages for their entire workforce; companies with more than 500 employees may only claim credits for wages paid to employees who are not providing services due to the foregoing economic reasons
Under the American Rescue Plan (ARP) passed on March 10, 2021, expanded access to the following types of companies
- Small startups (defined as businesses formed after February 15, 2020) can qualify even if they do not meet the normal qualification rules regarding closure and/or decline in gross receipts, subject to certain caps and other restrictions.
- Severely distressed large employers (defined as having 500+ employees and a decline of over 90% in gross receipts) can qualify for the full scope of the tax credit, including credits for employees who continue to work, which are otherwise reserved for eligible companies with fewer than 500 employees.
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 was mandated effective April 1,2020 through December 31, 2020 at which point it became an optional credit. Under the American Rescue Plan of March 2021, the optional FFCRA has been extended through September 30, 2021.
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.