Club Capital Webinar: COVID-19 Legislation Impacts & Opportunities for Insurance Agents
The goal of the Club Capital COVID-19 Webinars is to help agents better understand the recent legislation passed by our federal government and how it will affect their business.
The Families First Coronavirus Response Act (FFCRA) requires certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. The Department of Labor’s Wage and Hour Division administers and enforces the new law’s paid leave requirements. These provisions will apply from the effective date through December 31, 2020.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the largest financial assistance bill ever, includes provisions to help small businesses.
The team at Club Capital was happy to be able to connect with over 200 agents around the country to provide insight and guidance on how to take advantage of these two stimulus packages. Watch the video below to hear from Micah Cannon (Partner), John Sutton (Accounting/Tax Manager) and Chris Ferretti (Customer Success Manager).
April 2nd Webinar on Payroll Protection Loan
March 31st Webinar on Families First Coronavirus Response Act and CARES Act:
Frequently Asked Questions:
Payment Protection Program:
- What time period do we need to provide documentation from?
Last 12 Months of Payroll Journals from time of application.
- What about employees making $100K or more?
Only $100K can be counted for each employee from wages, benefits, state and local taxes associated with that employee.
- What if you don't have a full calendar year of payroll for 2019?
There is a calculation to figure out your average payroll
- Does that count for owner draws?
This still needs clarification from the banks and the government. As of right now Club Capital is preparing as if it does count, limited to the $100K of total compensation (owner draws, plus W2 Earnings).
- What do you do with the completed application?
If you would like to engage Club Capital, you can send it in to us and we will assist compile your supporting documentation and get it to our lending partners.
- I incorporated my agency on 03/01/20 and was a sole proprietor since 2004, would that be a problem?
Should not be an issue, may have to provide documentation of the incorporation.
- Are subcontractors on commission eligible?
As it stands now, only employees expenses should be included.
- Can I get the PPP loan if I already have a SBA loan?
As long as you have not defaulted on a SBA loan you may be eligible for the program.
- Should I ask for loan forgiveness if I did not need the loan to make payroll?
You are eligible for loan forgiveness if you use 75% of the loan amount for payroll costs. With that being said it is up to you to apply for forgiveness.
- What documents do we need to provide to apply?
Generally, 12 Month Payroll Journal or Quarter 2 of 2019 Payroll Journal. There may be additional documents required to verify self employment income or owner draws.
- The loans are backed by the government, correct? No collateral required?
Correct, there is no personal guarantee or collateral required and the Small Business Administration guarantees the loan at 100%
- Are there credit requirements for the loan?
We do not believe there are credit requirements at this time.
- Would employer paid taxes on payroll be included?
State and Local taxes are to be included. FICA and Federal Taxes are to be specifically excluded.
- Club capital gonna put this together for us ?
Yes! As your accountant we can serve as an agent on your behalf. Due to volume we are working through our lending partners which will be the same loan terms and conditions as if you work with any bank. There will be no additional cost through engaging with Club Capital for this service.
- When it comes to forgiveness, is it EIGHT WEEKS of expenses from loan origination, or your expenses between loan origination and June 30th?
From our stance it is expenses eight weeks after loan origination date. The June 30th date is the deadline for new applications.
- I applied for the COVID-19 Economic Injury Disaster Loan so does this mean I cannot apply for the PPP?
You can still apply for the PPP, the amount actually gets added to your PPP Loan.
- Is the application the same for each bank?
Yes the application, loan term and conditions will be the same for each bank.
- If I have already filed my tax with Club Capital, would John/someone on CC team help us with providing the necessary documents to apply with our local bank?
Of will assist you in pulling the documents. IF you want our team to engage as an Agent on behalf and manage your application (no additional cost to you) we will apply through our lending partners.
- If the loan is forgiven is this now considered taxable income?
The loan proceeds are not considered taxable income.
- If you pay rent to your personal LLC would that qualify as rent due?
We believe this to be the case, would be the same as if you paid any other institution.
- How soon do you anticipate funds being available?
Technically, the program starts April 3rd, 2020. We are still working on turnaround time with the banks and the government. The intent of the program is to have funds released quickly.
- I don't need it now, but have no idea what the future holds. Thoughts?
If you think you may be affected or are uncertain about your economic future this program is designed to provide certainty.
- If I want to hire someone new would that count?
As we understand the government is looking at total full time employee headcount as of June 30th, 2020.
- Are there penalties for having money left over or is it just the interest for 2 years?
Just interest and money is not forgiven at that point.
DOES THE FFCRA APPLY TO FULL-TIME AND PART-TIME STAFF?Yes, both are qualified.
DOES THE EMPLOYEE HAVE TO BE SICK TO RECEIVE THESE BENEFITS?No, they can be taking care of a family member who is under a federal/state/local order or recommendation by a healthcare provider to quarantine/isolate; caring for a child whose school/place of care has been closed due to COVID-19; are experiencing any other substantially similar conditions specified by the Secretary of Health and Human Services.
ARE THE FFCRA BENEFITS IN ADDITION TO THE EMPLOYEES NORMAL PTO AND SICK TIME POLICY? Yes.
IF MY EMPLOYEE CAN'T WORK A FULL DAY BECAUSE THEY ALSO HAVE TO TEND TO THIER KIDS AT HOME DO THEY QUALIFY?Yes, for the hours they are not working they can receive 2/3 pay. For EPSL your employee is entitled to two thirds of their regular wages up to $200/day, for up to 80 hours ($2,000 total per employee) for full-time employees or the average number of hours worked over a two week period for part-time employees. New employees qualify for emergency FMLA coverage after 30 days of employment where the first 10 working days taken off are unpaid. They may be covered with accrued paid time off, sick leave, or emergency paid sick leave (as listed previously). After the first 10 days, employers must pay employees two thirds of their normal rate of pay up to a maximum of $200 per day or the aggregate of $10,000. For employees with varying work hours, take the average number of hours they were scheduled to work in the six months prior to the start of their leave (or if a recent hire, then the reasonable average hours expected at the time of hire).
HOW DOES THE TAX CREDIT WORK?For EPSL, if employees take emergency paid sick leave, employers can receive a tax credit up to the capped amounts listed above to cover the wages they paid them. This credit covers 80 hours of paid sick leave for full-time employees, or the average number of hours worked over a two week period for part-time employees.
The credit will be applied to an employer’s Social Security taxes (this reduces the federal tax payments Gusto makes on their behalf).
-For time taken for a federal/state/local isolation or quarantine order or recommendation by a healthcare provider to self-quarantine or to seek medical care related to COVID-19 the credit is capped at $511 per day and $5,110 total per employee.
-For time taken to care for a family member who is under a federal/state/local order or recommendation by a healthcare provider to quarantine or to care for a child whose school/place of care has been closed, the credit is capped at $200 per day and $2,000 total per employee.
The IRS will refund credit amounts that exceed Social Security liabilities after the quarter ends.
For FMLA, businesses can receive tax credit for wages paid towards this benefit up to $200 per day and $10,000 total per employee over the course of the COVID-19 pandemic. In a given quarter, the maximum credit is $2,000 per employee. Credit is applied to an employer’s Social Security taxes (this reduces the federal tax payments Gusto makes on your behalf).
- I AM OPENING MY BUSINESS ON 4/1/2020, DO I QUALIFY FOR THE CARES CARE? No, your business would need to have opened before March 1, 2020.
- WILL THIS LOAN BE FORGIVEN? YES - with limitations and provisions. Small businesses that take out these loans can get some or all of their loans forgiven. Generally speaking, as long as employers maintain paying employees at normal levels during the eight weeks following the origination of the loan, then the amount they spent on payroll costs will be forgiven. Exclusion: this excludes costs for any employee compensation above $100,000 annual salary.
- WHAT IS THE MAXIMUM LOAN AMOUNT THAT I CAN APPLY FOR? The Payroll Protection Program provide small business loans up to $10 Million to cover payroll and certain other expenses, or 2.5 times your total payroll expenses for the loan period.
- WHAT COSTS DOES THIS NEW LOAN COVER? The new loans will cover payroll costs and employee benefits, mortgage interest incurred before 2/15/2020, rent and utilities under lease agreements in force before 2/15/2020 and utilities for which the service began before February 2020.
- CAN CLUB CAPITAL HELP ME APPLY FOR THESE LOANS? Yes, please reach out to email@example.com to get the process started!