One of the major business-tax relief provisions of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is the paycheck protection program (“PPP”) loan forgiveness and the accompanying exclusion of the forgiven amounts from taxable income. Over the past month since the CARES Act’s enactment, the IRS has released guidance clarifying the interaction between PPP loan forgiveness and other provisions of the Act. However, a lingering, big-picture question regarding the deductibility of certain business expenses paid for with later forgiven PPP loan funds remained. Such expenses include mortgage interest, rent obligations, utility payments, and payroll costs—all covered uses of a PPP loan. Continue reading
As discussed in an earlier post, the CARES Act authorizes the Director of the United States Patent and Trademark Office (“USPTO”) and the Register of Copyrights to “toll, waive, adjust, or modify” certain timing deadlines and provisions under trademark and copyright law in response to the coronavirus outbreak. The USPTO and the Copyright Office have now issued notices exercising these powers.
The notice issued by the USPTO extends by 30 days the deadline for certain trademark filings that were due March 27 through April 30, 2020, including certain of the following:
- Responses to Office Actions, including notices of appeal from a Final Refusal;
- Statements/Affidavits of Use, Requests for Extension of Time to file Statements of Use, and Affidavits of Excusable Nonuse;
- Notices of Opposition and Requests for Extension of Time to File Notices of Opposition;
- Priority Filings based on foreign applications and Requests to Transform an Application based on foreign applications; and
- Renewal Applications.
The filing must be accompanied by a statement that the delay in filing or payment was due to the fact that the practitioner, applicant, registrant, or other person associated with the filing or fee was personally affected by the COVID-19 outbreak, such that the outbreak materially interfered with the timely filing or payment. This could be due to office closures, cash flow interruptions, inaccessibility of files or other materials, travel delays, personal or family illness, or similar circumstances.
The USPTO also reaffirmed its offer to waive fees for petitions to revive and reinstate applications and registrations that are abandoned or canceled or which expire due to the inability to timely respond to a USPTO communication as a result of the COVID-19 outbreak as we described in this prior post.
For all other situations not addressed by the USPTO notice, a request or motion for an extension of time may be made as appropriate.
- Copyright Office
The notices issued by the Copyright Office relating to the COVID-19 outbreak are available here. They provide the following:
- Timing for Registration – Generally, a copyright owner is eligible to be awarded statutory damages in an infringement action only if the work has been registered prior to the infringement or within three months of the work’s publication. To mitigate the effect of any disruption in registration timing due to the coronavirus outbreak, the Copyright Office has provided the following:
- For copyright applications that can be submitted entirely in electronic form, the timing provisions are unchanged.
- If the applicant can submit an application electronically but is unable to submit a required physical deposit, the applicant should upload, together with the application, a declaration or similar statement certifying, under penalty of perjury, that the applicant is unable to submit the physical deposit and would have done so but for the national emergency. The declaration must also include supporting evidence, such as statements that the applicant is subject to a stay-at-home order or that the applicant is unable to access the physical materials due to closure of their business. In this case, if the three-month window for registration after the date of first publication was open as of March 13, 2020, the window will be extended, provided that the applicant submits the required deposit within 30 days after the date the disruption ended as determined by the Register.
- If the applicant is unable to submit an application electronically or physically, the applicant may submit an application after the Register has announced the end of the disruption. The applicant must include a declaration or similar statement certifying, under penalty of perjury, that the applicant was unable to submit the application and would have done so but for the national emergency. The declaration must include supporting evidence, such as statements that the applicant did not have access to a computer or the internet or that the applicant was prevented from accessing or sending the required physical materials for reasons similar to those set out in the preceding bullet. In this case, the three-month window will be tolled between March 13, 2020, and the date that the disruption ended.
- Timing for Termination – Under certain circumstances, the Copyright Act allows authors to reclaim copyright interests that have been transferred to others. In general, an author may terminate a transfer within a five-year window, provided that the author serves a notice on the transferee between two and ten years before the chosen termination date. After service, the notice must be recorded with the Copyright Office. To ensure that authors are not deprived of their ability to effect this termination, the Copyright Office has provided the following:
- If the termination window is expiring, the window for service of a notice of termination will be extended if:
- the termination window expires on or after March 13, 2022, and less than two years after the date the disruption by coronavirus ends;
- the author serves a notice of termination within 30 days after the date the Register announces as the date that the disruption ended; and
- the notice of termination is accompanied by a declaration or similar statement certifying, under penalty of perjury, that, but for the national emergency, the author would have been able to serve the notice at least two years before the close of the window, setting forth an explanatory statement supporting the declaration.
- If the window to record is expiring, the requirement that the notice be recorded before the date of termination will be waived if:
- the author has already served the notice on the transferee;
- the termination date listed on the notice is on or after March 14, 2020, and on or before the date the Register announces as the date the disruption ended;
- the author records the notice within 30 days after the date the disruption ended; and
- the recordation submission includes a declaration or similar statement certifying, under penalty of perjury, that, but for the national emergency, the author would have served the notice in a timely manner. The declaration must also set forth an explanatory statement supporting the certification, such as a statement that the author was prevented from accessing or mailing the required materials.
- If the termination window is expiring, the window for service of a notice of termination will be extended if:
The Copyright Office says it will also consider additional appropriate modifications as it becomes aware of sufficient disruption to the copyright system caused by the outbreak. The above modifications will be in effect for 60 days, unless the Register issues an announcement stating that the period of disruption ended before that time or that a further extension is necessary.
In its notices, the Copyright Office has also set out some alternate procedures for electronic applications accompanied by physical deposits to mitigate the effect of the temporary closure of the Copyright Office.
It would be best if all applicants and registrants could timely file their documents with the USPTO and the Copyright Office if they are able. However, for those who are unable to timely file because of the effects of the Coronavirus outbreak, we recommend you confer with an intellectual property attorney to confirm if and how your deadline may be extended under the guidance issued by the USPTO and the Copyright Office.
Given widespread financial hardship due to COVID-19, commercial landlords are receiving requests for relief from tenants unable to pay the next month’s rent. Legally, landlords are probably justified in refusing to abate or defer rent, though this issue is far from settled and ripe for future litigation.
A tenant in this situation has two likely arguments for seeking rent deferral:
- A force majeure clause in the lease (one that provides both parties relief from obligations upon events such as natural disasters, war, and acts of God); and
- Frustration of Purpose (a legal doctrine excusing a party from performing its obligations under a contract if it is prevented from acting due to an unforeseen event).
As lease disputes arise, it is possible that these arguments convince courts—potentially sympathetic to tenants who have not been able to pay rent during the COVID-19 emergency—to grant an abatement or deferral of rent. To add more uncertainty for landlords, Sarasota County’s Clerk of Court, relying on an order last week from the Supreme Court of Florida, has temporarily stopped issuing writs of possession (the final orders in an eviction lawsuit necessary for removing an evicted tenant).
As long as the Clerk of Court takes this position, landlords will be prevented from promptly evicting delinquent tenants. Given these obstacles, and considering landlords have a vested interest in ensuring the long-term success of many of their tenants, landlords should consider creative solutions when responding to a tenant’s request for relief. Below are options a landlord can consider in this situation:
- Refuse any abatement or deferral. This approach may only be viable for financially strong tenants, or those with whom the landlord has little long-term incentive to cooperate (e.g., tenants with a poor payment history, or who will be moving locations soon, or permanently closing their business). Also, a landlord may have more leverage to take this position for leases that do not contain a force majeure.
- Require tenants apply for assistance under the CARES Act or other emergency assistance programs. The recently enacted CARES Act allows small businesses to apply for assistance from the Small Business Administration. Certain tenants may also be eligible for the Florida Small Business Emergency Bridge Loan Program. Landlords can request eligible tenants apply for this assistance, and pass it on to the landlord in the form of continued rent payments. Alternatively, landlords might want to require this assistance as a condition to deferral of rent payments under Options #3 and #4, below, to ensure that the tenant will have sufficient cash to continue to pay rent once the COVID-19 emergency ceases.
- Temporarily defer rent payments and make up missed payments over a period of time. The deferral could be for the entire amount of the rent, or just a portion, and can be allocated in whatever manner the parties may agree is workable (i.e., for a period of several months after the COVID-19 emergency ceases). However, landlords may wish to take a “wait and see” approach and only agree to the deferral on a month-to-month basis.
- Defer rent payments and agree to extend the lease for the duration of the deferral. Generally, this approach is less beneficial for landlords than Option #3, but tenants who might be slow to recover after the emergency, or who were barely able to pay rent before the emergency, might only agree to an extension of the lease, rather than making increased payments once normal business operations resume.
Each tenant’s ability to pay rent will vary, and landlords with multiple tenants face a myriad of challenges as they attempt to develop solutions that maintain continuity of their own cashflow without alienating their best and most reliable tenants. At Williams Parker, our team of experienced business and real estate attorneys are uniquely equipped to provide landlords with the depth of counsel they need to respond to these quickly evolving challenges.
Writs of possession are also required to take possession of property after a foreclosure.
The Clerk’s position applies to both residential and commercial evictions. For recent developments surrounding a federal moratorium on certain residential evictions, see our article Mortgage Relief in the CARES Act.
As businesses in Florida make decisions on how to move forward during the COVID-19 public health emergency, many businesses are weighing the effects of a layoff or furlough on their employees’ ability to secure unemployment benefits. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act—which was signed into law the afternoon of March 27, 2020—includes provisions that address these issues. These provisions are referred to as the Relief for Workers Affected by Coronavirus Act.
Before addressing how the CARES Act may temporarily affect unemployment, it is important to understand what steps the State of Florida has already taken. At this stage, Florida has temporary made individuals who have a COVID-19-related unemployment situation eligible for reemployment assistance (the name Florida gives to unemployment benefits). Specifically, under current Florida guidance, the following persons are currently eligible for COVID-19 unemployment benefits:
- People ordered to quarantine by a medical professional
- Those laid off or sent home without pay for an extended period by their employer due to COVID-19
- Those caring for an immediate family member with the virus.
The CARES Act will expand these benefits—presuming, of course, that Florida enters into an agreement with the federal government. Such an agreement is required for each provision in the CARES Act related to unemployment.
If Florida agrees and participates in the expended benefits, below is general summary of what will be available to those whose work has been negatively impacted by the coronavirus:
Federal Pandemic Unemployment Compensation: provides an additional $600 per week in unemployment benefits on top of the maximum benefits an individual may receive (state provided benefits + Pandemic Unemployment Compensation = Total Benefits). These benefits are available to those whose lack of work is tied to COVID-19 up through July 31, 2020.
Pandemic Unemployment Assistance: provides for financial assistance for gig workers, the self employed and contract workers typically not eligible for benefits.
- Applies to those not eligible for regular benefits, including those that have already exhausted rights to regular or extended benefits, provided that they meet certain criteria – i.e. a need related to COVID-19.
- It appears that furloughed workers will be eligible for benefits, even while staying on company benefit plans.
- Does not include those that have the ability to telework with pay or are receiving paid leave benefits.
- Available for loss of pay/income between January 27, 2020 and December 31, 2020.
- No “waiting period” for benefits.
- Benefits shall not exceed 39 weeks total benefits under this or any other unemployment provision, unless extended benefits are provided.
Pandemic Emergency Unemployment Compensation: provides an additional 13 weeks on top of states’ standard limits for employees meeting specific criteria (lack of work due to COVID-19).
- Florida’s current standard limit for benefits is 12 weeks.
- Thus, it appears that a total of 25 weeks of eligibility—unless extended benefits apply in which case this benefit should be used before the extended benefit.
Temporary Funding of State One Week Waiting Period: provides that if States waive the requirement of a one week waiting period for benefits, the States will be reimbursement for unemployment compensation payments made for that week.
Temporary Financing of Short-Term Compensation (“STC”) Payments: provides that from the date of enactment until December 21, 2020, States such as Florida will be reimbursed for payments made pursuant to an STC program, if the need for such payments arises from a reduction in hours due to COVID-19 and the works is not employed on a seasonal, temporary, or intermittent basis.
- STC allows employers to reduce hours of work for employees rather than laying-off some employees while others continue to work full time.
- Those employees experiencing a reduction in hours are allowed to collect a percentage of their unemployment compensation benefits to replace a portion of their lost wages.
- Additional information can be found at this website the State of Florida has established:
Williams Parker has launched a multidisciplinary task force of lawyers across the firm to advise on issues arising from COVID-19 and to provide guidance for affected clients. This team is closely monitoring legal developments and guidance from federal, state, and local government and public health officials. For the latest updates, please visit our website.
This post was originally published on Williams Parker’s Labor & Employment Blog.
Signed into law on March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act (H.R. 748) is designed to get much-needed liquidity to business by, among other means:
- Origination of new Small Business Administration (SBA) loans through the “Paycheck Protection Act”;
- Economic Injury Disaster Loans and Emergency Grants; and
- Loan Payment Subsidies for Existing SBA Loans.
The SBA must provide additional guidance and regulations with 15 days of the execution of the CARES Act, but below is a broad outline of some of the resources designed to infuse liquidity into small business in the coming weeks.
The Paycheck Protection Act
Building on the existing platform of the SBA’s 7(a) loans available to small business from banks and other lending institutions, the Paycheck Protection Program (PPP) in the CARES Act allocates $349 billon to guarantee nonrecourse loans to “small business” and certain non-profits that have been economically affected by Coronavirus. Broadly speaking, the goal of the PPP is to get funds quickly into the economy that can be used to retain workers and maintain payroll or make mortgage payments, lease payments, and utility payments. To expedite getting PPP loans to small business, the PPP (i) expands the scope of what businesses qualify for an SBA loan; (ii) eliminates the typical requirements needed to obtain a SBA loan; and (iii) provides a loan forgiveness provision tied to certain expenses incurred and paid by a borrower.
Here is a breakdown of the relevant terms of the PPP:
|Loan Duration & Interest Rate||
|Allowable Uses of Loan||
|Other Notable Provisions||
Economic Injury Disaster Loans and Emergency Grants
In addition to providing liquidity to borrowers through the PPP, the CARES Act expands the scope and availability of Economic Injury Disaster Loans (EIDL) to extend not only to small business concerns, private nonprofit organizations, and small agricultural cooperatives, but also to small business with not more than 500 employees, individuals operating as sole proprietorships, cooperatives with not more than 500 employees, ESOPs with not more than 500 employees, and tribal small business concerns. In broadening the availability of EIDLs to borrowers, the CARES Act also waives typical EIDL requirements that (i) borrowers provide personal guarantees; (ii) borrowers must have been in business for one year before the disaster; and (iii) borrowers show that they are unable to get credit elsewhere. In administering EIDLs, the SBA may approve a borrower solely based on the borrower’s credit score or use “alternative appropriate methods to determine an applicant’s ability to repay” an EIDL.
The CARES Act provides for an advance on an EIDL in the form of an emergency grant of up to $10,000. If an eligible borrower requests the advance, the SBA is required to distribute the emergency grant within 3 days of the request. Uses for the advance must relate to the economic effects caused by COVID-19 and include, (i) providing paid sick leave to employees; (ii) maintaining payroll to retain employees; (iii) meeting increased costs to obtain materials; (iv) making rent or mortgage payments; and (v) repaying obligations that cannot be met due to revenue loses. Eligible borrowers who receive an emergency grant but are later denied an EIDL are not required to repay the advance. In the event that a borrower transfers into a Paycheck Protection Program loan, any advance received by the borrower shall reduce the amount of any loan forgiveness under the Paycheck Protection Program.
Loan Payment Subsidies for Existing SBA Loans
As part of the CARES Act, Congress provides assistance to existing SBA loans and related loans by allocating $100 billion to the SBA to pay principal, interest, and any associated fees owed on preexisting covered loans. Unless the loan is already being deferred, payments on the covered loan will begin following the next payment due. For covered loans that are currently in deferral, the six-month period shall begin following the existing deferment period. The subsidies and payments under this portion of the CARES Act apply to existing SBA loans only and not SBA loans made under the Paycheck Protection Program.
SBA Guidance and Loan Resources
While we wait for the SBA to establish regulations implementing the provisions of the CARES Act over the coming days, it is worth noting that the SBA has already established a “Coronavirus (COVID-19): Small Business Guidance & Loan Resources” page on its website that addresses:
- Economic Injury Disaster Loans and Loan Advances;
- SBA Debt Relief;
- SBA Express Bridge Loans;
- Guidance for Businesses and Employers;
- SBA Products and Resources;
- Government Contracting, and
- Local Assistance.
Though many of these topics and the SBA’s current guidance will need to be updated to address the various aspect of the CARES Act—including, the Paycheck Protection Program, Economic Injury Disaster Loans and Emergency Grants, and Loan Payment Subsidies for Existing SBA Loans—since those provisions of the CARES Act are designed to overlay on the existing structure of SBA Loans, if you don’t already have experience working with the SBA or obtaining an SBA Loan, I recommend you take a look at the SBA’s current guidance.
Florida Small Business Emergency Bridge Loan Program
Eligible Florida small businesses may apply to the Florida Small Business Emergency Bridge Loan Program to bridge liquidity gaps while waiting for sufficient profits from a revived business, receipt of payments on insurance claims, or until federal disaster relief becomes available. Eligibility is linked to the availability of other financial resources. Any amounts distributed under the loan program are short-term, interest-free loans that must be repaid within one year.
Eligible businesses must have between 2 and 100 employees, be privately owned and operating in the state of Florida, and have been in existence prior to the date of the declared disaster (March 9, 2020). If a business is able to demonstrate that it has suffered significant economic injury due to the declared disaster, a loan of $50,000 may be made available. Loans of up to $100,000 may be made available in special cases should a business demonstrate exceptional need.
Eligible businesses have until May 8, 2020, to apply. The application can be found online at the Florida Department of Economic Opportunity website.
For additional updates related to COVID-19, please visit our resources page.
An update to this post was published April 7.
The newly-passed CARES Act now authorizes the Director of the United States Patent and Trademark Office (“USPTO”) and the Register of Copyrights to “toll, waive, adjust, or modify” certain timing deadlines and provisions under trademark, patent, and copyright law in response to the Coronavirus outbreak. This addresses the issue previously raised by the USPTO, discussed in our original post below, that it was unable to grant waivers or extensions of certain trademark deadlines and fees because they are set by statute rather than regulation.
The USPTO Director and the Register of Copyrights may exercise the powers granted under the CARES Act by publicly publishing a notice to that effect. We will continue to monitor the situation and update this Blog with the latest news.
This post is an update to a previous post.
The Florida Department of Revenue has granted relief to certain adversely affected taxpayers suffering from business interruptions caused by COVID-19. This relief extends the deadlines for reporting and remitting property tax and sales and use tax for affected taxpayers.
Florida property tax assessments for the 2019 tax year are generally due on March 31, 2020. The Florida Department of Revenue has applied an extension to all 67 counties in Florida, pushing the due date on property taxes back to April 15, 2020 for all taxpayers, regardless of whether the extent a taxpayer’s ability to pay has been affected by COVID-19.
The Florida Department of Revenue has also provided an extension for businesses to remit sales and use taxes to the state and file related tax returns, but this extension only applies to certain Adversely Affected Taxpayers rather than any taxpayer collecting sales and use tax. To be treated as an Adversely Affected Taxpayer and qualify for the sales and use tax deadline extensions, a taxpayer’s business must experience one of the following:
- The business closed in compliance with a state or local government order and had no taxable sales transactions as a result; or
- The business experienced sales tax collections in March 2020 that are less than 75% of March 2019 sales tax collections; or
- The business was established after March 2019; or
- The business is registered with the Department to file quarterly.
Florida’s sales and use tax is the state’s largest source of revenue, producing over $26 billion annually for the state. Sales and use tax, along with other related tax returns and payments, are generally due on the first day of the month following the month of collection and are considered late if filed after the 20th day of the month. The Florida Department of Revenue has extended this due date to April 30, 2020, for sales tax collected in March for Adversely Affected Taxpayers. Taxpayers who do not fall within the definition of Adversely Affected Taxpayer must still follow the normal due date of April 20, 2020.
For businesses unable to meet their March 20 deadline for collections of February sales and use tax, the Florida Department of Revenue has waived penalty and interest on late payments if the taxes are reported and paid by March 31, 2020.
The Florida Department of Revenue’s emergency order extending the property tax filing and payment deadline is available on the Department’s website.
The Florida Department of Revenue’s emergency order extending the sales and use tax filing and remittance deadline is also available on the Department’s website.
An update to this post was published April 7.
Even though the United States Patent and Trademark Office (“USPTO”) acknowledged in a recent notice that the Coronavirus outbreak is an “extraordinary situation,” it explained that is nonetheless unable to grant waivers of extensions of certain trademark deadlines. These include the deadlines to file and pay the fees for the following:
- Statements of Use;
- Affidavits of Continued Use or Excusable Nonuse;
- Renewals; and
- Filing an Opposition or Cancellation Proceeding.
The USPTO has explained that it is unable to extend these deadlines or waive the associated fees because they are set by statute. In contrast, the USPTO does have flexibility when applying fees for petitions to revive an abandoned application or to reinstate a canceled or expired registration, which are set by regulation.
It would be best if all applicants and registrants could file these documents timely if they are able. However, for those who are unable to timely respond because of the effect of the Coronavirus outbreak, the notice states that the USPTO will waive the petition fees to review applications and registrations that are abandoned, canceled, or expired. The petition must include a statement explaining how the failure to respond was due to the effects of the outbreak and must be filed within two months of the issue date of the notice of abandonment or cancellation or, if the applicant or registrant did not receive a notice of abandonment or cancellation, within six months after the date the USPTO’s electronic records system indicates that the application is abandoned or the registration is canceled or expired.
You can read the full notice issued by the USPTO here.
Coronavirus and COVID-19 have changed almost every aspect of our daily routines and behavior. Unfortunately, the changes that are crucial to flatten the curve and mitigate the immediate public health crisis – social distancing, reducing travel, avoiding crowded areas, working remotely, homeschooling – are also causing widespread devastation to small businesses.
The Florida Small Business Emergency Bridge Loan Program is intended to mitigate the impact of COVID-19 on small businesses. According to Governor DeSantis, $50 million will be earmarked to the loan program in the short-term to assist businesses with between two and 100 employees in the industries most affected by COVID-19. The short-term, interest-free (for the first year) working capital loans are intended to “bridge the gap” between the time a major catastrophe hits and when a business has secured longer term recovery resources, such as insurance payments or federal disaster assistance. Eligible small businesses may borrow up to $50,000, and loans of up to $100,000 may be available in special cases. Additional information about the program and online application forms are available at floridadisasterloan.org. The program will accept applications through May 8, 2020, contingent on availability of funds.
The United States Small Business Administration (the “SBA”) Economic Injury Disaster Loan Program provides small businesses with working capital loans of up to $2 million to help overcome temporary losses of revenue. Information about the program is available at disasterloan.sba.gov. Businesses may be eligible to receive loan assistance from both the Florida and SBA programs.
The Internal Revenue Service (the “IRS”) has issued guidance allowing corporate taxpayers to defer up to $10 million of federal income tax payments otherwise due on April 15, 2020 until July 15, 2020, without penalties or interest. The IRS will also be permitting high-deductible health plans to pay for Coronavirus testing and treatment without waiving their status. Additional information and details about tax deferment and treatment of insurance benefits is available through the IRS website, www.irs.gov.
While it will not provide immediate economic assistance, Florida business owners should complete the Business Damage Assessment Survey, available online at floridadisaster.biz. The Florida Department of Economic Opportunity will use the information obtained from the survey to determine appropriate actions to implement and apply for various relief programs in the longer term.
Relief for American taxpayers amid the COVID-19 outbreak came in two forms on Wednesday, March 18, 2020. First, IRS action to postpone the April 15 income tax payment deadline. Second, Congress enacted the Families First Coronavirus Response Act (H.R. 6201), which provides for a refundable payroll tax credit for small businesses. This is the second COVID-19 funding bill. President Trump signed the bill into law shortly after its passage by the Senate. Both the Notice and the Families First Coronavirus Response Act are summarized below.
Notice 2020-17, Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic
- Individuals can defer tax payments up to $1 million for 90 days (until July 15, 2020). This $1 million limit is also applicable to married individuals.
- The Treasury Department indicated that the $1 million limit is also meant to cover small business and pass-through entities.
- Corporations can defer tax payments up to $10 million for the same period (until July 15, 2020).
- Estimated income tax payments for a taxpayer’s 2020 taxable year are included within these deferrable amounts.
- Does not extend the payment or deposit of any other type of Federal tax
- Does not extend the deadline for filing any tax return or information return
- Interest, penalties, or additions to tax with respect to these postponed income tax payments will be waived during the 90-day period, starting on April 15, 2020.
Families First Coronavirus Response Act (H.R. 6201)
- Provides 100% refundable tax credit to private-sector employers with fewer than 500 employees that are required to provide paid sick leave and paid family leave benefits
- For sick leave, covered employers will pay employees their full wages up to $511 per day and $5,100 in the aggregate when an employee cannot work due to Federal, state, or local ordered quarantine or isolation, an employee has been told by a healthcare provider to self-quarantine, or the employee is experiencing symptoms of COVID-19. Employers are required to pay employees two-thirds of their full wages, up to $200 per day and $2,000 in the aggregate when employees are unable to work due to providing care to an individual subject to Federal, state, or local ordered quarantine or isolation, care for a child whose school or place of care has been closed due to COVID-19, or due to another similar condition specified by federal officials.
- For family leave, the amount of mandated paid leave may not exceed $200 per day and $10,000 in the aggregate. The first 10 days of public health emergency leave may consist of unpaid leave, after which paid leave is required.
- Other detailed rules apply.
“Stage-Three” Economic Stimulus Package
The Treasury Department also released a two-page summary of key elements of the Trump Administration’s “Stage-Three” proposals for a broad stimulus package to further address the economic impact of COVID-19, including:
- $200 billion for an exchange stabilization fund for specified uses, such as the airline industry and loan guarantees for other severely distressed sectors;
- $500 billion for “economic impact” payments in the form of two rounds of direct payments to individuals based on income and family size to be issued on approximately April 6 and May 18; and
- $300 billion for small business interruption loans.
Various senators have proposed other stimulus packages that focus on childcare costs incurred due to school and daycare closures and providing further relief to businesses.