What is the Employee Social Security Deferral Memorandum?

Please Note: This information is subject to change, please refer to IRS information located here https://www.irs.gov/pub/irs-drop/n-20-65.pdf to stay up to date on changes.

Here is information about the program from Quickbooks:

“What is the deferral memorandum?

On August 8, 2020, a Presidential Memorandum was issued to provide employers the option to temporarily defer their qualified employee’s Social Security tax.

As an employer, you can choose to offer certain employees a deferral of their 6.2% Social Security tax. This is normally taken out of each paycheck, but you can opt to keep it in your employee’s pay from September 1, 2020, to December 31, 2020. It’s the employer’s choice to offer their employees the deferral or not.

This means that certain employee’s net pay could increase by 6.2% through December 31, 2020. However, those same employees’ wages could decrease by around 6.2% from January 1, 2021 through April 30, 2021. This is because you’ll need to withhold and repay the taxes deferred (not including other taxes and deductions that may apply).

UPDATE:  The Consolidated Appropriations Act, 2021 was passed and extended the period for collecting deferred 2020 Social Security taxes.  The period for collection is now January 1, 2021 through December 31, 2021 (instead of January 1, 2021 to April 30, 2021). 

Which employees are eligible for the deferral?

Only employees whose compensation payable during any bi-weekly pay period is less than $4,000, calculated on a pre-tax basis, are eligible.

Per the IRS, eligible wage amounts are determined per pay period based on the employee’s pay frequency:

Pay frequency	Wage limits to qualify (before tax)
Weekly	Less than $2000.00
Bi-weekly	Less than $4000.00
Semi-Monthly	Less than $4333.33
Monthly	Less than $8667.67

What do I have to do?

Employers may choose to offer the deferral to their employees or not. This is a deferral only, so any amounts not withheld from September 1, 2020 through December 31, 2020 need to be repaid by April 30, 2021. Employers are obligated to remit the total applicable taxes deferred regardless of whether they are able to withhold those amounts from their employees’ paychecks from January 1, 2021 through December 31, 2021. Otherwise, interest, penalties, and additions to tax will start accruing on Janurary 1, 2022.

How can I set this up in my payroll product?

See How to set up Employee Social Security Deferral in QuickBooks for detailed instructions for your payroll product.

More Questions

Am I required to offer this to my employees?

No, this is voluntary and you are not required to offer this to your employees.

If I elect to opt-in and offer the deferment to my employees, are they required to defer?

No, this is voluntary and they are not required to defer, if you offer it. Employees can opt-in or out any time during the deferral period. We suggest that you obtain some acknowledgement of agreement from your employee prior to beginning the deferral.

Is base salary the only consideration for deferral of social security?

No. Earnings include, but are not limited to, base salary, bonus and generally any other taxable earnings/income paid to the employee.

Are other employee taxes also part of the deferral?

No, only the employee portion of Social Security can be deferred.

If I opt-in and offer deferral for my employees, how does the money get paid back by December 31, 2021?

As the employer you are ultimately responsible for the repayment, not the employee. You will need to obtain the amount deferred from your employees and remit directly to the IRS on or before December 31, 2021.

How will I be able to obtain these funds from the employee after the deferral period ends?

See the “How can I set this up in my payroll product?” section above and refer to the information provided for your Intuit payroll product.

How are taxes affected?

The amounts that have been deferred will be included in Box 13b as well as reported on Line 24 of the 941 for Quarter 3 and 4.”

Reference: https://quickbooks.intuit.com/learn-support/en-us/help-articles/what-is-the-employee-social-security-deferral-memorandum/00/669618

What is the Louisiana Main Street Recovery Grant Program?

On June 12, 2020, Governor John Bel Edwards signed Senate Bill 189, Act 311 enacting several COVID-19 relief funds including the Louisiana Main Street Recovery Fund that awards grants to many Louisiana small businesses to assist in their recovery for the economic impacts of COVID-19. The program will be administered by the Louisiana Department of Treasury, John M. Schroder, State Treasurer.

Applications will be available online starting July 28, 2020. Please click here to sign up to receive Program updates. You may also click here to take the Business Eligibility Quiz.

UPDATE: All available funds have been awarded and the program closed on January 23, 2021.

Documentation

The below list includes documents that you may start compiling in anticipation of the application opening date.

• Federal Taxpayer Identification Number
• State Taxpayer Identification Number
• Louisiana Department of Revenue account number
• Business date of formation/creation
• Documentation to support eligible expenses (invoices, proof of payment, payroll records, vendor contracts, bank/credit card statements, rental agreements or mortgage statements, utility bills, etc.)
• Number of full-time equivalent employees (as of March 1, 2020)
• Information for all “Controlling Owners” of the business (defined as individuals or entities who exercise the power to make policy decisions). Information includes Name, Job Title, SSN or EIN, Residential Address, and Driver’s license Number.
• Information regarding other sources of COVID-19 funding received from United Stated SBA programs (PPP, EIDL, EIDL Emergency Advance), other federal program, or insurance proceeds
• Copies of filed tax returns for 2018 and 2019

Eligibility

Businesses must meet the following eligibility requirements to receive grant awards:

1. Were domiciled in Louisiana as of March 1, 2020
2. Suffered an interruption of business
3. At least 50% owned by one or more Louisiana residents
4. Filed Louisiana taxes in 2018 or 2019 or will file taxes in 2020
5. Had no more than 50 full-time employees as of March 1, 2020
6. Have customers or employees visit a physical location
7. Are not part of a bigger business with more than 50 full-time workers
8. Does not exist for the purpose of advancing partisan political activity and does not directly lobby federal or state officials
9. Does not derive income from passive investments without active participation in business operations

Priority application will be given to those who have not received federal assistance.

The Legislature has also mandated the Treasurer to award at least $40 million in grants to businesses owned by women, minorities and veterans within the first 60 days of the program.

Key Program Dates

Jul 28

The first day that Louisiana Main Street Recovery Program grant applications will be accepted.

Aug 17

The last day for priority given to applications that received no Federal Assistance (deadline 11:59 PM CST).

Sep 25

The target date for the Louisiana Main Street Recovery Program to have awarded $40 MM to minority, women, or veteran-owned applicants (deadline 11:59 PM CST).

Nov 4

Louisiana Main Street Recovery Program Application Deadline (deadline 11:59 PM CST).

Contact

Additional questions on program dates can be sent via email to info@louisianamainstreet.com. 

Call centers have also been set up to be an informative resource and to answer questions related to the Louisiana Main Street Recovery Program. Call centers will operate starting July 10, 2020. Extended call center hours will begin on July 28, 2020 when the online portal is launched, and applications can be submitted.   

Call Center: 1-888-795-4947

Monday-Friday 8AM-5PM 

What do I have to do to have my Safe Open Loan forgiven?

Loans will be forgiven after 90 days if the recipients meet basic requirements, which include:

– Operating safely, following governor’s guidelines.
– Maintaining monthly Profit / Loss Statements (FREE QuickBooks training is available). 
– Maintaining or open a separate business bank account.
– Consulting at least once with Shreve.biz consultants.
– Submitting data on revenue and number of employees retained via online survey.

What is the Safe Reopen Loan Fund?

The City of Shreveport, in partnership with SUSLA Community Development Corporation, has established the “Safe Reopening Fund” to support the city’s smallest businesses as they transition into a phased reopening and continue to grapple with the economic burdens imposed by COVID-19.

The City of Shreveport’s Department of Community Development will make an initial $100,000 available for distribution in the form of forgivable micro-loans to small businesses. These funds are Community Development Block Grants that are earmarked for economic development.Businesses will receive checks for $500, which can be used to cover the cost of personal protective equipment (PPE) for employees or as working capital to assist with reopening.

Loans will be forgiven after 90 days if the recipients meet basic requirements, which include:

– Operating safely, following governor’s guidelines.
– Maintaining monthly Profit / Loss Statements (FREE QuickBooks training is available). 
– Maintaining or open a separate business bank account.
– Consulting at least once with Shreve.biz consultants.
– Submitting data on revenue and number of employees retained via online survey.

Please note: Business owners who own multiple businesses may only apply once for this program.

To apply or find out more, click here.

How do I apply for the Safe Reopen Fund?

The City of Shreveport has made $100,000 in CDBG funds available to small, local businesses in the form of $500 micro-loans, which will be forgiven if the business meets basic requirements, such as following state reopening guidelines. The funds can be used to cover the unexpected cost of PPE, disinfectant materials, or as working capital.

UPDATE: The Safe Reopen Fund is now closed. This FAQ will be updated should the fund be reopened.

What is the Main Street Lending Program

UPDATE: The Main Street Lending Program was terminated on January 8, 2021 as it had expended its allotment of funds. This FAQ will be updated should new funds become available.

The Main Street Lending Program of the Federal Reserve will provide $600 million in relief to both small and mid-sized businesses. The program is made up of 2 parts: the Main Street New Loan Facility (MSNLF) and the Main Street Expanded Loan Facility (MSELF). Borrowers can only use one of the 2 programs. The MSNLF is for new loans while the MSELF allows companies to expand existing loans.

Unlike the SBA’s Paycheck Protection Program (PPP) these loans are not eligible to be forgiven and are subject to facility, origination and service fees. Borrowers that have taken out loans through the Paycheck Protection Program may meet eligibility requirements to also participate in the Main Street Lending Program.
For details click here and here .

For an article about the Main Street Lending Program click here.

What is the Employee Retention Tax Credit?

The Coronavirus Aid, Relief, and Economic Security (CARES) Act created a new employee retention tax credit for employers who are closed, partially closed, or experiencing significant revenue losses as a result of COVID-19.

Who is ELIGIBLE?

Private employers, including non-profits, carrying on a trade or business in 2020 that:

• Have operations partially or fully suspended as a result of orders from a governmental authority due to COVID-19, or
• Experience a decline in gross receipts by more than 50% in a quarter compared to the same quarter in 2019 (eligibility ends when gross receipts in a quarter exceed 80% compared to the same 2019 quarter)

With respect to tax-exempt organizations under 501(c) of the tax code, the requirement to be partially or fully suspended applies to all operations of the organization.

Employers who receive a Paycheck Protection Program (PPP) loan are not eligible for a tax credit. 

To learn more, click here.

To download the Guide to the Employee Retention Tax Credit, click here.

To access IRS Form 7200, which is needed to claim the credit, click HERE. 

To find the IRS’ answers to FAQs about the credit, click HERE. 

UPDATE (JANUARY 2021):

Prior to 2021, the employee retention tax credit applied only to an employer who experienced a decline in gross receipts of more than 50% in a quarter compared to the same quarter in 2019. For 2021, eligibility is now expanded to include employers who experienced a decline of more than 20%.

Tell me about LED’s Loan Portfolio Guaranty Program

From ledbizloan.com

UPDATE: This program expired on December 31, 2020

The Louisiana Loan Portfolio Guaranty Program, or LPGP, is a partnership of Louisiana Economic Development (LED), which will provide a loan guaranty fund; the Louisiana Bankers Association (LBA), whose participating members will offer the loans; and the Louisiana Public Facilities Authority (LPFA), which will administer the program.

The purpose of the LPGP is to provide loans to Louisiana small businesses in response to COVID-19. At this time, LED recognizes small business needs are immediate, and if there isn’t a timely response, the State risks losing a foundational element of its economy. In collaboration with the LBA and LPFA, LED has worked with the banking community to provide access to capital to small companies that may experience (have experienced) a sudden drop in revenues due to lost business caused by the COVID-19 pandemic. The State through LED is guaranteeing a portion of each participating bank’s loan.

All small businesses employing under 100 workers are eligible, including day cares, farmers and fishermen. We especially encourage Main Street businesses such as restaurants to apply. Ineligible businesses are those solely engaged in gaming, non-profit organizations, real estate developers, pawn shops, pay-day loans, lending and investment concerns, or speculative activities.

The program is designed to help business owners maintain the continuation of operations as a result of COVID-19. Suggested uses for the loan are to maintain employee payroll for an 8-week period at minimum payroll levels at the time of application for the loan, as well as to maintain continuance of operations within COVID-19 executive orders, proclamations, and relevant state agency guidance. The need for the loan and use of proceeds must be directly related to the economic injury caused by the COVID-19 pandemic.

Eligible small business owners may apply to one of the local banks and credit unions that have agreed to participate in this program.

Click here to find a participating bank.

For more information, you may contact the LED hotline at 833.457.0531. For general questions, please email LEDSmallbizloans@la.gov.

I am a sole proprietor or 1099 contract employee and I have questions about unemployment.

Please visit this FAQ from the Louisiana Workforce Commission for more informationThe Louisiana Workforce Commission has put together a collection of information that you might find helpful. You can access it at 

http://www.laworks.net/FAQs/FAQ_COVID-19_QandA.asp.

Are there any other helpful resources for understanding or navigating federal funding?

Yes! This information was provided by the Greater Shreveport Chamber about the PPP.

• US Chamber of Commerce step-by-step guide to PPP HERE. 
• Overview of the program, click HERE. 
• US Treasury Department information for borrowers seeking a loan, click HERE.  
• US Treasury Department final rules with specific examples and FAQ, click HERE.
• To find a list of approved lenders, click HERE. 
• To access the loan application itself, click HERE . 
• For US Treasury Department interim final guidance for banks, click HERE. 
• To access the SBA Application to become an approved lender, click HERE. 
• To access the US Treasury Department’s affiliation rules, click HERE. 

Tell me about the Paycheck Protection Act (PPP).

Please note, at this time, according to the SBA, “The SBA is currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding.”

However, there is a possibility of future funding of the program, so it is beneficial for business owners to be familiar with the program.

Paycheck Protection Program applications opened on April 3rd. PPP applications must be filed with an eligible bank, so the best first step is to contact the bank you use for your commercial banking.

The Paycheck Protection Program (“PPP”) authorized up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. 

All loan terms are the same for everyone.

Please see this fact sheet to read about what you need to know.

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program-ppp

With information changing rapidly, this site is the best way to make sure you are getting up to date information on the PPP.

Will workers paid as independent contractors/freelancers, not traditional employees, be eligible for unemployment benefits?

The Louisiana Workforce Commission has received funding from the federal CARES Act.

Anyone who is qualified for at least $1 of State Unemployment Insurance Benefits or the federal Pandemic Unemployment Assistance benefits will be eligible to receive the additional $600 benefit from the federal CARES Act. This includes self-employed and 1099 workers, who are normally excluded from receiving state benefits.

The federal unemployment ($600) is retroactive for weeks filed back to the week-ending 4/4/2020.

If you are ineligible for state unemployment benefits but you qualify for federal Pandemic Unemployment Assistance (PUA), you will receive the $600.

To learn more about PUA, visit https://www.louisianaworks.net/hire/admin/gsipub/htmlarea/uploads/UIPUABenefitsRightsInformation2020.pdf.

UPDATE (3/16/2021):

• PUA benefits have been extended through the week ending Sept. 6, 2021.
• The maximum duration of PUA benefits has increased from 50 to 79 weeks.

My business revenue has been impacted by the current crisis, is there any financial assistance available?

LOCAL ASSISTANCE

The City of Shreveport has made $100,000 in CDBG funds available to small, local businesses in the form of $500 micro-loans, which will be forgiven if the business meets basic requirements, such as following state reopening guidelines. The funds can be used to cover the unexpected cost of PPE, disinfectant materials, or as working capital.

Learn more by clicking here.

FEDERAL ASSISTANCE

Paycheck Protection Program

SBA is currently offering PPPloans until March 31, 2021. President Biden  announced program changes to make access to PPP loans more equitable.

Click here to learn more about the PPP.

Economic Injury Disaster Loans and Loan Advance

PRIVATE LENDING

Small business owners are also advised to call your existing lenders. Your current bank may be able to offer immediate bridge loan assistance or defer existing loan payments for a temporary period of time. Other local lenders may be able to assist as well; we will continue to update the site with new information as soon as it becomes available.