Benefits Counselor – August 2021 - Employment and HR mondaq.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from mondaq.com Daily Mail and Mail on Sunday newspapers.
If you own a business that’s been affected by the COVID-19 pandemic, you may have received some type of aid from the government – or maybe not. But in either case, some new opportunities for assistance may interest you.
President Biden signed legislation extending the Paycheck Protection Program application deadline from March 31 to May 31, 2021. So, if you haven’t received a PPP loan yet or even if you have, and you’re eligible for a “second draw” loan you’ve got another chance.
As you may know, a PPP loan may be fully forgiven, including interest, if the loan proceeds are used for eligible expenses such as payroll costs (including benefits), mortgage interest, rent, utilities, operations expenditures, property damage costs, supplier costs and work protection expenditures.
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President Biden signed the American Rescue Plan Act of 2021 (“ARPA”) into law on March 11, 2021. Provided here is an overview of the key features that affect employers.
COBRA Subsidy
In general, upon the loss of employer-sponsored health insurance benefits, the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) allows eligible employees to continue such benefits for up to 18 months at their own expense, meaning employees are typically responsible for the entirety of the premium amount plus an additional 2 percent administrative fee.
ARPA seeks to assist employees who are involuntarily terminated or suffer a reduction in work hours resulting in a loss of coverage (“assistance eligible individuals”). Between April 1, 2021 and September 30, 2021, employers must subsidize 100 percent of the COBRA continuation coverage of any assistance eligible individuals who complete COBRA enrollment. Employers will late
Financial Focus: How will the American Rescue Plan affect you? vaildaily.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from vaildaily.com Daily Mail and Mail on Sunday newspapers.
Applies retroactively to effective date of CARES Act
Credit increased to 70% of qualified wages; cap on credit increased to $28,000. The CARES Act provided for a refundable payroll tax credit of 50% of certain “qualified wages”, capped at $5,000/employee (50% of up to $10,000 of qualified wages for all calendar quarters). The Act increases the credit cap from $5,000 for the year to $7,000 (70% of $10,000) for any calendar quarter.[3] Accordingly, the Act will increase the maximum amount of credit available in 2021 for each employee from $5,000 to $28,000.
PPP borrowers may receive the tax credit. The CARES Act denied the employee retention tax credit to any employer that receives a loan under PPP, and defined the term “employer” expansively, potentially causing acquiring corporations with employee retention tax credits to lose or recapture those tax credits if they acquired a target company that had received a PPP loan.[4] The Act permits an employer that receives a