The Coronavirus Aid, Relief and Economic Security (CARES) Act has provided a wide range of programs that affect employee benefit plans, employers and employees. One benefit that has flown under the radar is a new, temporary tax-qualified student loan repayment plan. Section 2206 of the CARES Act allows employers to claim a tax deduction for repayments of employee student loans, and allows employees to exclude these payments from taxable income, in amounts up to $5,250 a year. In essence, the CARES Act treats student loan payments as an education assistance fringe benefit. Normally, such benefits may be paid only for …
Archives: CARES Act
Subscribe to CARES Act RSS FeedStop and review COVID-19 distribution and loan forms carefully
The Coronavirus Aid, Relief and Economic Security (CARES) Act, authorizes employers to make changes to their qualified retirement plans to increase loan limits, delay loan repayments, and make distributions to plan participants experiencing certain COVID-19 related circumstances. Due to a lack of guidance from the IRS, there’s confusion among third-party administrators (TPAs) about how to administer these changes, resulting in potential issues with forms used by TPAs to approve these CARES Act loan and distribution changes.
We have reviewed several third-party administrator forms and client communications, and wanted to provide some clarity with regard to the following CARES Act changes:…
Important update on the Payroll Protection Program
Since the passage of the Coronavirus Aid, Relief and Economic Security Act (CARES Act), the Small Business Administration (SBA) and the U.S. Treasury Department have released a series of interim final rules and updated Frequently Asked Questions (FAQs) (as of April 8, 2020) regarding Paycheck Protection Program (PPP). These updates provide critical guidance and information to borrowers and lenders alike in the implementation of the highly sought after program. This blog describes some of the key clarifications to the program since its enactment.…
UPDATE: SBA loan eligibility FAQs
Certain government programs, including SBA loan programs, are reserved for “small businesses.” In order to qualify for those programs, a business must satisfy both the SBA’s definition of a “small business concern” as well as the size standards for a small business.…
The Employee Retention Tax Credit
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) was signed into law. The CARES Act introduced the Employee Retention Tax Credit (ERTC), a new tax credit to incentivize employers, who are economically distressed due to COVID-19, to retain employees.…
How to claim COVID-19 tax credits under the FFCRA and the CARES Act
There are three COVID-19 related tax credits that were introduced under the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which are subject to various limitations:
- Emergency Paid Sick Leave Act tax credits – a dollar-for-dollar tax credit for qualifying wage payments of emergency paid sick leave;
- Emergency Family and Medical Leave Expansion Act tax credits – a dollar-for-dollar tax credit for qualifying wage payments of family leave; and
- The Employee Retention Tax Credit – a tax credit equal to 50% of qualifying wages payments made to employees.
