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Recap of Employer Covid Relief Provisions

The following provisions are designed to  provide more cash for businesses impacted by the Covid-19 health crisis. 

1. Income Tax Payment Deferral (IRS and California FTB) 

Both tax authorities have delayed payment due dates for 2019 income and estimated tax payments.  (Deferred to July 15, 2020.) 

2. Hardship Delay for State Payroll Tax of up to 60 days (California Employment Development Department )

"If you are experiencing a hardship as a result of COVID-19, you may request up to a 60-day extension of time from the EDD to file your state payroll reports and/or deposit state payroll taxes without penalty or interest. A written request for extension must be received within 60 days from the original delinquent date of the payment or return." 

3. SBA loans are available for up to $2 million

Small businesses can qualify for SBA loans (EIDL) to cover up to $2 million dollars of economic injury. Loan terms can be up to 30 years and repayments are deferred for a year.  Read more about how to apply directly with the SBA and requirements here. 

4. Bridge Loans 

The SBA has made bridge loans through traditional lenders available to cover cash needs while EIDL loans are being processed. 

5. Pending Federal Legislation - not enacted yet

The CARES Act has been approved by the Senate as of 3/25, but  must be approved by the House and then signed by the President before it becomes law. 

If enacted : 

  • Loans - Forgivable loans will be made to employers to funding payroll and other key expenses. The loans will be forgiven to the extent certain expenses (including payroll) are maintained at pre-Covid levels. 
  • Payroll Tax Credits - Employers are eligible for a 50 percent refundable payroll tax credit on wages paid up to $10,000. It would be available to employers whose businesses were disrupted due to virus-related shutdowns and firms experiencing a decrease in gross receipts of 50 percent or more when compared to the same quarter last year.
  • Payroll Tax Deferred Payments - This proposed provision would allow employers and self-employed individuals to defer payment of the
    employer's share of their 2020 Social Security tax . The provision requires that the deferred employment tax be paid over the following two years, with half of the amount required to be paid by December 31, 2021 and the other half by December 31, 2022.