The Rawls Group recently hosted a webinar featuring experts from Bennett Thrasher, Burr & Forman, People 1 and NLP Center of Atlanta who weighed in on effective strategies companies should implement to navigate the current uncertainty related to the coronavirus. Tim Oberst, a Tax Partner at Bennett Thrasher who has been instrumental in navigating the Paycheck Protection Program (PPP) loans and Coronavirus Aid, Relief and Economic Security (CARES) Act, shared his insight and advice for small businesses to consider in the current environment.
During the discussion, Oberst shared answers to tax questions many individuals and businesses need guidance on. Some of the questions and his responses included:
- I understand that the CARES Act has a provision allowing employers to defer payment of their payroll taxes. Does this apply only to certain businesses? Are there specific requirements? This provision was designed to give immediate cash flow relief to all businesses. All employers can benefit from this provision and it applies to the wages paid to employees from the date of enactment through the end of this year. Employers will be able to defer the 6.2 percent employer share of social security. Fifty percent of the deferred amount will be due at the end of 2021, and the remaining half will be due at the end of 2022. It’s important to note that payroll companies will not be automatically deferring these payments; employers must opt in. The one caveat is that if a business applies for and receives a PPP loan from the Small Business Administration and the loan is forgiven, the business cannot continue to defer payroll taxes as well.
- Regarding the rebates being sent to individuals, will any taxpayers be required to pay back any portion of these funds when they file their 2020 tax returns? This advanced rebate is a credit on an individual’s 2020 tax return. While the rebate will have to be reconciled on the 2020 tax return, it cannot be reduced below zero from what the individual received. The individual will therefore not have to pay back any portion of the rebate.
Additional questions addressed during the webinar include:
- Is it necessary for a business to have furloughed employees to qualify for the new SBA loan program in the CARES Act, or is there any other bright-line test for being impacted by the pandemic?
- What are some of the best ways to use stimulus money?
- What steps should businesses be taking now to prepare for the changes made by the CARES Act?
Other panelists on the webinar included Dan Schneider, Partner at The Rawls Group; George Taylor, III, Partner at Burr & Forman; Matthew Scully, Partner at Burr Forman; Renay Winston, President of People 1; and Brigitta Hoeferle, CEO of NLP Center of Atlanta. To hear more of Oberst’s responses to the tax-related questions as well as more insight on the pandemic from attorneys, consultants and human resources experts, click here.
If you have further questions regarding the tax provisions of the CARES Act or PPP loans, including the calculation of loan forgiveness, please contact your Bennett Thrasher tax advisor or call 770.396.2200.