COVID-19 Summary and Resources – March 30, 2020

Stacy Shaw

March 30, 2020

COVID-19 Summary and Resources

Written by: Stacy Shaw, CPA, MBA, Partner of the Business Advisory and Client Accounting Services at Boyum Barencheer PLLP

Assisted by the Boyum Barenscheer COVID-19 Resource Team: Chris Wittich, CPA, MBT, Randy Feld, CPA, ABV, Barb Sawdy, CPA, CGMA and Nick Swedberg, CPA


As I put together this document of the timeline, summaries and resources for you, I wanted to share what message I printed out and shared with my daughters as they start their first day at home of flex learning:

Don’t Stress, Do Your Best, Forget the Rest

I do believe this is a great statement for all of us to live by.  We have a great team together here at Boyum Barenscheer reading, researching, interpreting, summarizing, guiding, training and finding ways to help.  It seems to be a great theme to put into action during this difficult time.  Everyone can use our help in so many ways.  It is my hope that this email helps you know what questions to ask and guidance to seek as you navigate through these trying times.  As you have seen in the news, there are resources out there.  It is just hard to know what applies and what does not.

The first U.S. response was the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 (P.L. 116-123). It was signed into law March 6, 2020.  This provided emergency funding for federal agencies to provide to the coronavirus outbreak both domestically and internationally.

  • The majority of the domestic funds for this bill was for the Department of Health and Human Services.
  • Provide the Small Business Administration (SBA) Economic Injury Disaster Loan program.
    • Any small business is eligible due to COVID-19.
    • Working capital loans used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. They are not meant for business expansion.
    • Up to $2 million
      • Unsecured up to $25,000
      • Need either collateral or a pledge where available
    • Affiliation rules have not been waived
    • 75% Interest rate
    • Loan amount is based on economic injury
    • Pay back is up to 30 years with terms determined on a case by case basis based on the borrower’s ability to repay
    • 12-month deferment of paybacks
    • The following are ineligible: religious organizations, charitable organizations, gambling concerns.
    • Approval Criteria:
      • Credit history
      • Ability to repay
      • In a disaster area and suffered working capital losses due to COVID-19.
    • Just added $10,000 loan advance to be provided within 3 days of application.  This loan advance will not have to be repaid.It is also referred to as a grant.
      • This is a separate request and took me about 15 minutes to answer and prepare. Please contact us with questions. If you already submitted a loan application you will need to go back in and apply for this grant which is now active.  Here is the website to apply
    • Provided a waiver removing restrictions on Medicare providers allowing them to offer telehealth services.
    • The international funds for this bill were for the United States Agency for International Development (USAID), State Department and CDC.

The second U.S. response was The Families First Coronavirus Response Act (P.L. 116-127).  It was signed into law March 18, 2020.  This response addressed the domestic outbreak, including paid sick leave, insurance coverage of coronavirus testing, nutrition assistance and unemployment benefits.

  • Assist the Department of Agriculture for their specific programs: WIC, TEFAP, SNAP and for the Secretary of Agriculture.
  • Assist the Department of Defense and Department of Veterans Affairs for diagnosis and testing.
  • Assist the Department of Health and Human Services for the Aging and Disability Services programs, the Public Health and Social Services Emergency Fund and to detect and test for COVID-19.
  • Create the Emergency Unemployment Insurance Stabilization and Access Act of 2020
  • Create the Emergency Paid Sick Leave Act to qualify reasons for emergency paid sick time leave where an employee is unable to work or telework due to a need for leave
    • Subject to quarantine or isolation order
    • Been advised by a health care provider to self-quarantine due to coronavirus concerns
    • Experiencing symptoms of coronavirus and seeking medical diagnosis
    • Pay: Employee’s regular pay, up to $511/day and $5,110 over the benefit period
    • Other qualified reasons include:
      • Caring for an individual who is subject to quarantine or isolation order or has been advised by a health care provider to self-quarantine due to coronavirus concerns
      • Caring for their child if their school or day care has been closed, or the child care provider is unavailable
      • Pay for these other qualified reasons: Two-thirds of the employee’s regular pay, up to $200/day and $2,000 over the benefit period
    • Duration and use summary: paid sick time of 80 hours for full time employees and an average over a two week period for part time employees. Available for immediate use.  Benefits are not retroactive.
    • Applies to private businesses with under 500 employees and all public employers. Employers need to post and keep this notice posted.
    • Excludes certain health care providers or emergency responders and to exempt businesses with fewer than 50 employees to provide for employees caring for their child if the school or daycare is closed if compliance would jeopardize their business.
    • Here is a link to an article by the Journal of Accountancy:
  • Provided testing for everyone
  • Created tax credits for Paid Sick and Paid Family and Medical Leave
    • Payroll tax credits for sick leave wages and family leave paid shall be allowed in the amount of benefits paid (not to exceed the limits above for pay) over the permitted duration.
    • Individual tax credit for the self employed of $200 per day (or $511 for emergency paid sick leave for own quarantine or seeking medical advice) or 67% (or 100% for emergency paid sick leave for own quarantine or seeking medical advice) of average daily pay for self employed individuals over the permitted duration, whichever is less.
    • Any wages paid for the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act shall not be considered wages for certain purposes.

The third U.S. response was the Coronavirus Aid, Relief and Economic Securities Act (the CARES Act).  It was signed March 27, 2020.  This act will provide $2 trillion in economic aid to individuals, businesses, the health care system, state and local governments and essential industries severely impacted by the current economic downturn.

  • Keeping American Workers Employed and Paid Act
    • Paycheck Protection Program, through the SBA but financed through SBA lenders, will make or guarantee loans up to $10 million to eligible entities:
      • Businesses with less than 500 employees (including sole proprietors, independent contractors and other self-employed individuals), nonprofit organizations, veterans’ organizations or Tribal concerns
      • Streamlined process, simplifying eligibility standards, expediting approvals and eliminating collateral and credit requirements
      • Use of funds is for: “payroll costs”; continuation of group health care benefits during periods of paid sick, medical, or family leave, or insurance premiums; salaries or commissions or similar compensation; interest on mortgage obligations; rent; utilities; and interest on other outstanding debt.
      • Maximum loan amount is lesser of the average total monthly payments for payroll costs incurred during the one-year period before the date the loan is made multiplied by 2.5 and $10,000,000.
        • If a business was not in business from Feb 15, 2019 to June 30, 2019, the maximum loan amount is the lesser of the average total monthly payments for payroll costs incurred from January 1, 2020 to February 29, 2020 multiplied by 2.5 and $10,000,000
      • No collateral or personal guarantee is needed for this covered loan.
      • Loan forgiveness is available.
        • Amount is equal to the payroll costs, mortgage interest payments, rent, and utilities (the “forgivable costs”) incurred or paid by a recipient during the covered period. For purposes of determining the loan forgiveness amount, “covered period” means the 8-week period beginning on the date of the origination of a covered loan. The loan forgiveness amount is excluded from taxable income.
        • The amount of loan forgiveness will be reduced by multiplying the forgivable costs by the quotient obtained by dividing the average number of full-time equivalent employees per month during the covered period by, at the election of the borrower, the average number of full-time equivalent employees per month from February 15, 2019 to June 20, 2019 or the average number of full-time equivalent employees per month from January 1, 2020 to February 29, 2020. The amount of loan forgiveness will also be reduced by the amount of any reduction in total salary or wages of any employee during the covered period that is in excess of 25 percent of the total salary or wages during the most recent full quarter during which the employee was employed before the covered period. There are exceptions for these reductions if, during the period beginning on February 15, 2020 and ending 30 days after enactment of the Act, there is a reduction in the number of full-time equivalent employees or salary and the reduction is eliminated no later than June 30, 2020.
      • For any amount owing after the forgiveness, it will have a maximum maturity of 10 years and an interest rate that cannot exceed 4%.
      • Lenders must defer the payments for at least 6 months and up to one year.
      • The loan forgiveness must be done by submitting an application to the lender that originated the covered loan.
        • Documentation verifying the number of full-time equivalent employees on payroll and pay rates for the applicable periods, including payroll tax filings; and state income, payroll, and unemployment insurance filings; and
        • Documentation verifying payments on mortgage obligations, lease obligations and utilities, including cancelled checks, payment receipts, transcripts of accounts, or other documents.
        • Consider having a separate bank account to track the receipt of the loan and then the payment of the qualifying expenses.
      • Contact your banker today to find out when they can start accepting loan applications and what they will need you to provide.
    • Assistance for American Workers, Families and Businesses
      • Temporary Pandemic Unemployment Assistance Program through December 31, 2020 providing to those normally not eligible (self employed, independent contractors, etc.) who are unable to work due to COVID-19. It provides an additional $600 per week for up to 4 months.
      • $1,200 tax rebate to be paid per adult and $500 per child with adjusted gross income limits and calculated from your 2019 return, if already filed, or 2018 tax returns, if not. See /covid-19-resource-center/ for Chris Wittich’s videos on CARES Act – Stimulus Checks and Individual Tax Provisions for more information.
      • Waives early withdrawal penalties for certain distributions from qualified retirement accounts.
      • Waives required minimum distribution rules for defined plans and IRAs for 2020.
      • Makes modifications regarding charitable giving deduction.
      • Permits employers to pay portions of an employee’s student loans tax free.
      • Financial relief provisions for businesses include an employee retention credit up to 50% on up to $10,000 of wages paid by employers who have experienced a closure (whose employees are furloughed) or significate decline in gross receipts due to COVID-19 or deferment of Social Security payroll tax payments
      • Tax relief provisions for businesses include the expanded ability to use net operating losses and relaxing of interest limitations and write offs for qualified improvement property that businesses may claim on their 2018, 2019, and 2020 tax returns. See /covid-19-resource-center/ for Chris Wittich’s video on CARES Act – Business Tax Provisions.
    • Supporting America’s Health Care System in the Fight Against Coronavirus
      • Providing for shortage of supplies for the health care system.
      • Relief for college students and student loan borrowers impacted by COVID-19 deferring all student loan payments for six months for all federally owned loans and released restrictions on grants for use of funds to apply to COVID-19 relief efforts.
      • Expands telehealth services to add more providers, relax place of service limitations and increase reimbursement rates. It also increases Medicare coverage reimbursement for COVID-19 related treatment.
    • The other sections are more for the government to assist other distressed sectors of the economy, provide relief funds and emergency appropriations.

We expect the fourth U.S. Response to be coming soon.  As you can see, there is a lot going on and a lot  that continues to be worked on.  Even the responses above continue to change day by day, so please note this document is to the best of our knowledge as of March 30, 2020.

As you can see, there are a lot of options, and I would suggest that each depends on your business as of today and what you are planning for the next few weeks.  We suggest putting together a 13 week cash flow forecast by week to get an estimate of what you expect your cash needs to be. We have some cost savings and cash flow savings tips available.  Due to the length of this email, I will wrap up.  Please know, it was hard to even limit the information above.  There is so much more to this than what is in this email.

Please reach out with questions or to set up a call.  See /about-us/our-leadership/ for our contact information.

We are here for you.  Please do reach out with any questions or concerns you have.



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