Recap of State and Federal Coronavirus Stimulus Laws

Recap of State and Federal Coronavirus Stimulus Laws

The following is a recap of summaries of the various federal and Mississippi provisions for relief from the financial effects of the COVID-19 virus pandemic.

FEDERAL RELIEF

Families First Law Provides for Paid Leave

The Families First Coronavirus Response Act (FFCRA) (H.R. 6201) was signed into law on March 18, 2020.  Here are the highlights:

Who does it impact?

It applies to all employers with 500 or fewer employees.  However, for businesses with fewer than 50 employees, the Labor Department can exclude that business if it is deemed that providing the leave could put the company out of business.  Unfortunately, there is still little information on how to claim the exemption.  The Q&A states: To elect this small business exemption, you should document why your business with fewer than 50 employees meets the criteria set forth by the Department, which will be addressed in more detail in forthcoming regulations.”

Which employees does this act apply to?

There are two distinct categories: (1) leave under the paid sick leave act (“sick leave”); and (2) leave under and an amendment to the Family and Medical Leave Act (“family leave”).

Sick Leave

  1. The employee is subject to a federal, state or local quarantine or isolation order related to COVID-19.
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
  3. The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis.
  4. The employee is caring for an individual who is subject to a quarantine or isolation order related to COVID-19 or who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
  5. The employee is caring for a son or daughter of the employee if the school or place of care of the son or daughter has been closed, or their child care provider is unavailable due to COVID-19 precautions.
  6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and Secretary of Labor.

Sick leave applies to all employers even if they just started working.

Family Leave

  • The employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency.

Family leave applies to employees who have been employed for 30 or more days who are unable to work.  It applies to both full-time and part-time employees. 

How does the paid sick leave and FMLA provisions coordinate with each other when an employee claims childcare leave? 

An employee can take a total of 12 weeks utilizing both acts, but the pay will be slightly different.   The U.S. Department of Labor’s Wage and Hour Division Q&A document states: “[t]he Emergency Paid Sick Leave Act provides for an initial two weeks of paid leave.  This period thus covers the first ten workdays of expanded family and medical leave, which are otherwise unpaid under the Emergency and Family Medical Leave Expansion Act unless you elect to use existing vacation, personal, or medical or sick leave under your employer’s policy.  After the first ten workdays have elapsed, you will receive 2/3 of your regular rate of pay for the hours you would have been scheduled to work in the subsequent ten weeks under the Emergency and Family Medical Leave Expansion Act.”  Therefore, an employee will be able to claim both sick leave and FMLA for childcare.

What is the practical difference between the childcare qualification under “sick leave” vs. “family leave?”

Good question.  The ability to “telework” looks like a technical distinction, and the FMLA does not have the 2020 expiration. It seems like employees will otherwise evaluate what is more generous for their situation.  Can you take both?  Don’t know.

My employee fits one of these categories, what does that mean?

The effective date of the law is April 1, 2020.  It is not retroactive.  The U.S. Department of Labor’s Wage and Hour Division Q&A document also states that any leave given before the effective date does not count toward FFCRA.  To determine your obligation, first determine if it is sick leave or family leave:

Sick Leave

Full-time employees are eligible for up to 80 hours of paid sick leave.  Part-time employees are entitled to the average number of hours they work over a two-week period.  If this varies, this can be calculated using the average worked over the last six-month period.

The amount of the entitlement depends on the reason.  Employees are entitled to regular compensation.  Employees must receive full pay up to $511 per day and $5,111 in total for reasons 1 through 3 above (basically, the individual is sick).  Employees must receive $200 per day up to $2,000 in aggregate for reasons 4 through 6 above. 

Paid Sick Leave is in addition to any other paid leave the employee is entitled to receive.

An employer cannot discriminate against an employee who takes sick leave.  Sick leave expires on 12/31/2020.

Family Leave

Unlike sick leave, the first ten days are unpaid.  An employee can take vacation, PTO, or other paid leave instead.

After ten days, the employer shall pay for 2/3rd of the employee’s regular rate of pay multiplied by the number of hours the employee would otherwise be scheduled to work capped at $200/per day and $10,000 in total.  Employees are eligible for this benefit for up to 12 weeks in a one-year period.

Part-time employees would be calculated by the hours normally scheduled to work.  If that varies, it is calculated as “a number equal to the average number of hours that the employee was scheduled per day over the 6-month period ending on the date on which the employee takes such leave, including hours for which the employee took leave of any type.”

Employees are entitled to return to their position after their leave.  There are some limited exceptions for employers with 25 or less employees.

How does the law apply when employees are able to telework?

The language of both the sick leave and FMLA acts make it clear that it only applies if an employee is unable to telework.  So if employees are able to work normal hours by teleworking, then they are not entitled to the leave.  However, the employer and an employee seem to have a lot of flexibility to define what “unable to telework” means.  The Q&A also encourages employers and employees to collaborate on the FMLA rules if they can agree on intermittent leave.  For example, if an employee could work Monday and Thursday, they could then use FMLA for the other days of the week.  Applying the leave provisions with telework probably needs to be done on case by case basis.  For more on this issue, review the Q&A, which discusses this extensively: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions.

Can an employer still furlough or lay off employees?

Yes, if you are making decisions because you don’t have enough work.  In this instance, an employee should seek unemployment benefits.   An example from the Q&A: “If your employer reduces your work hours because it does not have work for you to perform, you may not use paid sick leave or expanded family and medical leave for the hours that you are no longer scheduled to work.  This is because you are not prevented from working those hours due to a COVID-19 qualifying reason, even if your reduction in hours was somehow related to COVID-19.”

 Okay, so how does the employer pay for this?

Supposedly, the employer will get 100% back (including health insurance premiums paid).  First, through tax credits on payroll taxes.  If you paid out more than your tax credits, you are supposedly going to receive a refund.  This is supposed to happen within three months. 

Are you 100% sure with the above?

No.  This is our best shot within 24 hours.  We’ll keep updating.

[Thanks to the Public Policy Committee of the Special Needs Alliance and Brian Lindberg, Washington Public Policy Consultant, for this summary.]

Paycheck Protection Program

The federal stimulus includes nearly $350 billion in funding for a provision to create a Paycheck Protection Program (PPP) that will provide small businesses and other entities with zero-fee loans of up to $10 million.  Up to 8 weeks of average payroll and other costs will be forgiven if the business retains its employees and their salary levels.  Principal and interest is deferred for up to a year and all borrower fees are waived. This temporary emergency assistance through the U.S. Small Business Administration (SBA) and the Department of Treasury can be used in coordination with other COVID-financing assistance established in the bill or any other existing SBA loan program.

The bill requires the SBA Administrator to set a cap on how much a bank can earn to process loan applications and prioritize underserved borrowers, including those in rural communities, minorities, women and veterans.

Filing for Checks by SSI and SSDI Recipients

According to a March 27 article by Hayley Fowler and Brian Murphy in NewsObserver.com:

Millions of Americans are about to receive stimulus checks from the government — including recipients of Social Security.  Adults who learn less than $75,000 a year will receive $1,200 under the $2 trillion coronavirus relief package Congress has crafted to help ease an economic downturn caused by the spread of COVID-19.  An additional $500 will be paid out for dependents.

Retirees who get Social Security payments will also get the money.  So will recipients of Supplemental Security Income (SSI), a federal program for disabled or blind residents and those who have little or no income, according to the Senate Finance Committee.

In 2019, 64 million Americans received Social Security payments, according to the Center on Budget and Policy Priorities.  About 8 million received SSI benefits.

Social Security recipients typically don’t file tax returns.  But “as long as they received an SSA-1099 form (the Social Security benefit statement), the federal government will be able to send them a payment via the usual way they get their Social Security payment,” according to the Washington Post.

Sen. Richard Burr’s office in North Carolina confirmed that, WLOS reported.  Without a tax return, “those on Social Security and SSI Disability can use their Social Security Administration data to make their claim,” according to WLOS.

Sen. Ben Cardin of Maryland clarified that anyone receiving SSI who files taxes will be eligible for a stimulus check, KREM reported. If someone else claims them on their taxes, that person will get an additional $500 allotted for dependents under the bill.  There are also currently no sign-ups needed for stimulus payment checks, according to the IRS.

Federal Tax Filing Deadlines Extended

The IRS in Notice 2020-18 postponed the time for filing income tax returns and paying income taxes from April 15, 2020 to July 15, 2020.  Shortly thereafter, Notice 2020-20 was issued postponing the time for filing and paying gift tax returns and payment to July 15 as well.

STATE OF MISSISSIPPI

The State of Mississippi Secretary of State’s office has provided information about relief to small businesses and employers:

Economic Relief for Small Businesses

Small businesses severely impacted by the COVID-19 pandemic are eligible to apply for U.S. Small Business Administration Disaster Loan Assistance of up to $2 million per applicant. The loan can be used to pay fixed debts, payroll, accounts payable and more. Click here to apply.

The stimulus includes $10 billion in funding for a provision to provide an advance of $10,000 to small businesses and nonprofits that apply for an SBA economic injury disaster loan (EIDL) within three days of applying for the loan. EIDLs are loans of up to $2 million that carry interest rates up to 3.75 percent for companies and up to 2.75 percent for nonprofits, as well as principal and interest deferment for up to 4 years.

The loans may be used to pay for expenses that could have been met had the disaster not occurred, including payroll and other operating expenses.  The EIDL grant does not need to be repaid, even if the grantee is subsequently denied an EIDL, and may be used to provide paid sick leave to employees, maintaining payroll, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments. Eligible grant recipients must have been in operation on January 31, 2020. The grant is available to small businesses, private nonprofits, sole proprietors and independent contractors, tribal businesses, as well as cooperatives and employee-owned businesses.

Unemployment Benefits

Mississippi workers unable to work due to COVID-19 are now eligible to file for unemployment benefits. The Mississippi Department of Employment Security (MDES) announced existing unemployment compensation requirements have been adjusted, allowing more people to file for benefits. Governor Reeves signed Executive Order No. 1462 to implement the following:

  • Individuals receiving unemployment benefits will not be required to serve a waiting period week for initial claims filed from March 8, 2020, through June 27, 2020.
  • Work search requirements that normally must be met to be considered eligible for Unemployment Insurance benefits shall be suspended beginning March 21, 2020, until June 27, 2020.
  • All collection activities including, but not limited to, interception of state tax refunds, payment agreements, enrollment of liens, tax garnishments, and claimant overpayment garnishments shall be suspended until June 27, 2020.

Click here to file an unemployment claim, or call the MDES Contact Center at 888-844-3577. Online claims can be made 24 hours a day, seven days a week.

Mississippi State Tax Filing Deadlines Extended

On March 26, the Mississippi Department of Revenue issued the following provisions designed to provide “relief and certainty to our taxpayers”:

Extensions of Filing Deadlines

While the federal government and many other states have postponed their income tax filing and payment deadlines to July 15, Mississippi has currently elected to move its filing deadline to May 15 in order to meet our statutory requirements of a balanced budget as of the fiscal year end, which is June 30. The Department issued this extension with legislative input and input from our governor’s office. We cannot move this deadline out past the fiscal year end without express direction from the legislature and the governor because this will create a $500,000,000 deficit for the current fiscal year.

The Commissioner has the authority, by statute, to extend all sales/use and local tax levies by only one month without requiring the imposition of interest. As of this time, we have not extended the time to file returns; however, we are agreeing to delay the imposition of interest and penalty on any unpaid tax balance for the period covered by the presidentially declared national emergency.

Property taxes are assessed and collected at the local government levels in Mississippi. The Department of Revenue does not have the authority to extend any of these deadlines.

In addition, the Commissioner was granted approval to extend the following deadlines:

•  Homestead Application Deadline –the homestead application deadline has been extended until May 1, 2020.

•  First Monday of April Tax Sale – the tax sale deadline has been extended to May 4, 2020, which is the first Monday of May for the following counties: Amite, Quitman, and Sunflower.

•  Personal Property Renditions – the due date for Personal Property Renditions furnished by taxpayers to the County Tax Assessor has been extended for thirty (30) days. They will be due on May 1, 2020. Since the due date is now May 1, 2020, the 10% increase in assessment penalty for failure to provide to Assessor will also be extended to May 1, 2020.

•  Real and Personal Property Land Rolls Deadline –the due date for Real and Personal Land Rolls furnished from County Tax Assessors to Boards of Supervisors has been extended for thirty (30) days. At the discretion of each county’s board of supervisors, the extension is available, if needed. The land rolls could be due on the first Monday in August which will be on August 3, 2020.

•  Affordable Rental Housing Deadline –the due date for the owner of affordable rental housing to provide an accurate statement of the actual net operating income to the county tax assessor has been extended for fifteen (15) days. The statements will be due April 15, 2020.

Penalty and Interest Waiver

Mississippi has taken the steps to suspend the accrual of interest and penalty on all new assessments and all prior liabilities.  Penalty and interest accrual has been suspended effective March 15, 2020 and will continue until the end of the national emergency.

Audits and Filing Requirements

Our audit staff is continuing to work on open audits. We will take what steps we can to resolve issues to minimize any audit controversies.  We will agree to abate penalty and interest on any audits closed during this period of national emergency and where the taxpayer agrees to settle the audit without appeal and pay the tax due.  We will work with taxpayers to extend deadlines for production of records and will commit to executing extensions where needed.

During the period of national emergency, Mississippi will not change withholding requirements for businesses based on the employee’s temporary telework location.  Mississippi residents are taxable on their total income, regardless of where they work.  However, we will not impose any new withholding requirements on the employer.  Mississippi will not use any changes in the employees temporary work locations due to the pandemic to impose nexus or alter apportionment of income for any business while temporary telework requirements are in place.

Electronic Mail and Electronic Payments

Mississippi will accept electronic document delivery, digital signatures, and electronic forms of payment.  We are not aware of any requirements that a taxpayer must use certified mail in any response to this agency.  Certainly, if this situation presents itself, we will accept anything received via regular mail.  The Department will still be using certified mail where it is required to by statute.  There are statutory deadlines for response times to appeal actions of this agency.  We accept these appeals via electronic means now and believe that because we accept appeals through this manner there is no additional burden placed on a taxpayer to timely appeal.  Additionally, there is no statutory provision to allow us to extend this deadline, which is   currently 60 days for most actions of the agency.

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