6 things Contractors should be Considering
A large part of Executive Order 202.19 was regarding the PPP (Paycheck Protection Program): "to the extent necessary to allow a business that receives federal Paycheck Protection Program funding and subsequently rehires employees, to provide the notice required under this section as soon as practicable but not necessarily within ninety days, provided that a business that receives federal Paycheck Protection Program funding provided the notice required under this section when it initially laid-off employees." So I reached out to our friends at Marcum to see if they could help untangle the increasingly complex recommendations and avenues for contractors to take advantage of.
Mike Maksymiw, Partner at Marcum, responded with a rundown of what Contractors should be considering heading into May:
1. PPP Loan Program – prepare your application and supporting documents. Call your bank to find out if they will put your application “in queue” or when you submit it. Self-employed individuals are eligible for this program 2. Employee Retention Tax Credit – reducing payroll tax deposits for 50% of wages up to $10k per person if operations fully or partially suspended and you keep paying employees 3. Family Medical / Sick Leave Credit – reducing payroll tax deposits for the amount of sick leave paid, subject to caps on per-day pay ($200 / $511) and individual employee maximums ($10k) 4. Payroll tax deferrals – employers can defer the employer portion of Social Security Taxes for the rest of 2020, then pay half of the deferral in December 2021 and the other half in December of 2022 5. Net operating losses can be carried back 5 years
6. Borrow more from 401(k) / retirement plans and/or take penalty-free withdrawals – still have to pay income tax on withdrawals.
Keep in mind that these are generic recommendations. If you would like to speak to someone about what YOU should be doing, specifically, connect with Cary Kimmel for more information.