COVID-19 Dai­ly Com­mu­ni­ca­tions

Infor­ma­tion accu­rate as of 05/1/20

PPP & EIDL Updates:

 

  • It was con­firmed Thurs­day by the Trea­sury and Small Busi­ness Admin­is­tra­tion that on Wednes­day agen­cies tem­porar­i­ly shut out big banks from the elec­tron­ic loan por­tal used to sub­mit PPP appli­ca­tions for the government’s small busi­ness relief pro­gram. The move applied to any lender with more than $1 bil­lion in assets for an eight-hour time peri­od that began at 4 p.m. Wednes­day.  The move was to ensure access to the PPP loan pro­gram for the small­est lenders, accord­ing to the Trea­sury Sec­re­tary.  “The SBA and Trea­sury will eval­u­ate whether to cre­ate a sim­i­lar reserved time again in the future,” the agen­cies said Thurs­day.

 

  • The IRS on Thurs­day released guid­ance stat­ing that expens­es relat­ed to for­giv­able loans through the Pay­check Pro­tec­tion Pro­gram (PPP) won’t be tax-deductible. Under the PPP, small busi­ness­es would­n’t have to repay the low-inter­est loan they received as long as the loan went to essen­tial expens­es such as main­tain­ing pay­roll.  Usu­al­ly, wages are deductible expens­es and for­giv­en debt counts as tax­able income.  But under the coro­n­avirus relief law, the PPP loan for­give­ness is not count­ed as tax­able income. The IRS said in its guid­ance Thurs­day that expens­es that result in for­give­ness of a PPP loan are not tax deductible in order to pre­vent a “dou­ble tax ben­e­fit.”   The agency cit­ed Sec­tion 256 of the tax code, which states that deduc­tions can’t be tak­en if they are tied to a cer­tain class of tax-exempt income.  If desired, Con­gress could over­ride the IRS’s stance by pass­ing a law that explic­it­ly allows the deduc­tions.

 

  • Trea­sury Sec­re­tary Steven Mnuchin told The Wall Street Jour­nal this week that busi­ness­es that bor­row mon­ey through the fed­er­al Pay­check Pro­tec­tion Pro­gram (PPP) can expect to be audit­ed before the loans are for­giv­en, “One of the things that will be required is you will have to show a pay­roll report that you actu­al­ly spent the mon­ey on pay­roll and oth­er items that qual­i­fy for for­give­ness,” he said.  Mnuchin reit­er­at­ed that the gov­ern­ment will per­form a full audit on any com­pa­ny that bor­rowed more than $2 mil­lion from PPP.  The SBA has issued $660 bil­lion in loans that can be for­giv­en if bor­row­ers use them to retain or rehire employ­ees.  Bor­row­ers must cer­ti­fy 75 per­cent of the mon­ey was spent on pay­roll.

 

  • The SBA web­site is still unable to accept new appli­ca­tions at this time for the Eco­nom­ic Injury Dis­as­ter Loan (EIDL)-COVID-19 relat­ed assis­tance pro­gram (includ­ing EIDL Advances) based on avail­able appro­pri­a­tions fund­ing. Appli­cants who have already sub­mit­ted their appli­ca­tions will con­tin­ue to be processed on a first-come, first-served basis.

 

  • As State economies are being test reopen­ing, there is a grow­ing fear by some indi­vid­u­als of becom­ing inel­i­gi­ble for unem­ploy­ment. The U.S. Depart­ment of Labor out­lines spe­cif­ic con­di­tions a per­son has to meet to refuse to return to work. The list includes a COVID-19 diag­no­sis, restric­tions due to child­care avail­abil­i­ty, car­ing for an ill fam­i­ly mem­ber or health “com­pli­ca­tions that ren­der the indi­vid­ual objec­tive­ly unable to per­form his or her essen­tial job func­tions, with or with­out a rea­son­able accom­mo­da­tion” as a result of hav­ing recov­ered from COVID-19.  Vol­un­tar­i­ly decid­ing to quit your job out of a gen­er­al con­cern about expo­sure to COVID-19 does not make you eli­gi­ble for [Pan­dem­ic Unem­ploy­ment Assis­tance], accord­ing to the DOL rule.

State and Local:

  • Near­ly 93,000 Ohioans filed ini­tial unem­ploy­ment claims dur­ing the week end­ed April 25.

The num­ber of new claims filed for the week was less than 100,000 for the first time in more than a month, accord­ing to the Ohio Depart­ment of Job and Fam­i­ly Ser­vices. Total claims filed over six weeks are 1,057,486, which is 341,974 more than the com­bined total for the last two years.  In six weeks, the state has paid $1.45 bil­lion in unem­ploy­ment com­pen­sa­tion to more than 481,000 claimants.

 

  • Ken­tucky report­ed 90,824 ini­tial claims dur­ing the week end­ed April 25, down from the 103,548 claims filed last week, accord­ing to the U.S. Depart­ment of Labor. Ken­tucky has paid $991 mil­lion in unem­ploy­ment com­pen­sa­tion to more than 564,000 claimants since the virus began spread­ing.

 

Cities Offer­ing Emer­gency Busi­ness Relief Pro­grams

 

Busi­ness help­ing Busi­ness:

 

The U.S. Cham­ber has launched the Save Small Busi­ness Fund, a pil­lar of the Save Small Busi­ness Ini­tia­tive. The pro­gram pro­vides $5,000 sup­ple­men­tal grants to small employ­ers in eco­nom­i­cal­ly vul­ner­a­ble com­mu­ni­ties.

 

NKY Cham­ber Dai­ly: http://www.nkychamber.com/news/covid-19/

 

US Cham­ber of Com­merce:  https://www.uschamber.com/members/small-business