1. Extension of Time to File Income Tax Returns

The US federal and California income tax filing deadline is now July 15. However, if you are eligible for the federal earned income tax credit (“EITC”), California EITC, and/or California’s child tax credit, filing your taxes before July 15 may provide an immediate benefit.

2. Changes to the FMLA

Beginning April 2, the Families First Coronavirus Response Act (“FFCRA”)  requires that employers with fewer than 500 employees, with some exceptions, to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19.

Generally, the FFCRA provides that employees of covered employers are eligible for:

• Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or

• Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State, or local government order or advice of a health care provider), or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor; and

• Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.

All employees of covered employers are eligible for two weeks of paid sick time for specified reasons related to COVID-19. Employees employed for at least 30 days are eligible for up to an additional 10 weeks of paid family leave to care for a child under certain circumstances related to COVID-19.

Under the FFCRA, an employee qualifies for paid sick time if the employee is unable to work (or unable to telework) due to a need for leave because the employee:

1. is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;

2. has been advised by a health care provider to self-quarantine related to COVID-19;

3. is experiencing COVID-19 symptoms and is seeking a medical diagnosis;

4.    is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);

5.    is caring for a child whose school or place of care is closed (or childcare provider is unavailable) for reasons related to COVID-19; or

6.    is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

Under the FFCRA, an employee qualifies for expanded family leave if the employee is caring for a child whose school or place of care is closed (or childcare provider is unavailable) for reasons related to COVID-19.

Duration of Leave:

• For reasons (1)-(4) and (6): A full-time employee is eligible for 80 hours of leave, and a part-time employee is eligible for the number of hours of leave that the employee works on average over a two-week period.

• For reason (5): A full-time employee is eligible for up to 12 weeks of leave (two weeks of paid sick leave followed by up to 10 weeks of paid expanded family & medical leave) at 40 hours a week, and a part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period.

Calculation of Pay:

• For leave reasons (1), (2), or (3): employees taking leave are entitled to pay at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a 2-week period).

• For leave reasons (4) or (6): employees taking leave are entitled to pay at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 in the aggregate (over a 2-week period).

• For leave reason (5): employees taking leave are entitled to pay at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 in the aggregate (over a 12-week period).

The provisions will apply from April 1, 2020 through December 31, 2020.

3. Work Sharing Program

If a company is experiencing a slowdown in businesses or services as a result of COVID-19, the employer can apply for the Unemployment Insurance (UI) Work Sharing Program under California's Employment Development Department Work Sharing Unemployment Insurance Program. This program allows employers to seek an alternative to layoffs, which includes retaining their trained employees by reducing their hours and wages that can be partially offset with UI benefits. Workers of employers who are approved to participate in the Work Sharing Program receive the percentage of their weekly UI benefit amount based on the percentage of hours and wages reduced, not to exceed 60 percent.

4. SBA Economic Injury Disaster Loan

The U.S. Small Business Administration is offering low-interest federal disaster loans for working capital to California small businesses suffering substantial economic injury as a result of COVID-19.  Small businesses, private non-profit organizations of any size, small agricultural cooperatives, and small aquaculture enterprises that have been financially impacted as a direct result of COVID-19 since Jan 31, 2020, may qualify for Economic Injury Disaster Loans of up to $2 million to help meet financial obligations and operating expenses which could have been met, had the disaster not occurred.

Eligibility for Economic Injury Disaster Loans is based on the financial impact of COVID-19. The interest rate is 3.75 percent for small businesses. The interest rate for private non-profit organizations is 2.75 percent. SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years and are available to entities without the financial ability to offset the adverse impact without hardship.

These loans may be used to pay fixed debts, payroll, accounts payable, and other outstanding bills resulting from the disaster’s impact. However, loan proceeds may not be used to:

• Refinance indebtedness which you incurred prior to the disaster event;

• Make payments on loans owned by another federal agency (including SBA) or a Small Business Investment Company licensed under the Small Business Investment Act

• Pay, directly or indirectly, any obligations resulting from a federal, state or local tax penalty as a result of negligence or fraud, or any non-tax criminal fine, civil fine, or penalty for non-compliance with a law, regulation, or order of a federal, state, regional, or local agency or similar matter;

• Repair physical damage; or

• Pay dividends or other disbursements to owners, partners, officers or stockholders, except for reasonable remuneration directly related to their performance of services for the business.

5. Paycheck Protection Program

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. The maximum loan size is equivalent to 250 percent of the employer’s average monthly payroll costs or $10 million, whichever is less. The SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. Up to 100 percent of the loan is forgivable. Small businesses, including eligible non-profits, Veterans organizations, Tribal concerns, sole proprietorships, self-employed individuals, and independent contractors described in the Small Business Act – with 500 or fewer employees may apply.

You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. The Paycheck Protection Program will be available through June 30, 2020.

6. Payroll Taxes

Small businesses can defer the payment of the employer portion of social security taxes that otherwise would be due between March 27, 2020 and December 31, 2021.  Employers are allowed, instead, to deposit half of the deferred payments by the end of 2021. The remaining tax liability will be due by Dec. 31, 2022.

7. Individual Rebate Checks

Most individuals earning less than $75,000 can expect a one-time cash payment of $1,200. For married couples, each spouse will receive a check, with families receiving an additional $500 per child. That means a family of four earning less than $150,000 can expect $3,400. The checks start to phase down after that and disappear completely for people making more than $99,000 and couples making more than $198,000.

Any aid checks will be mailed to the address at which someone last filed their taxes, so we recommend you fill out the forms below if you have changed your address in the last 12 months:

• The IRS change of address Form 8822 can be found here - https://www.irs.gov/pub/irs-pdf/f8822.pdf

• The CA FTB change of address Form 3533 can be found here - https://www.ftb.ca.gov/forms/2019/2019-3533.pdf

8. Unemployment Insurance

If you've lost your job or had your hours cut as a result of the crisis, apply online for unemployment insurance at EDD.ca.gov. Check here for eligibility.

The federal bill provides an extra $600 per week for up to four months for those receiving unemployment benefits. Under California law, many individuals, like Uber and Lyft drivers, who were classified as a 1099 or contract worker, are eligible for unemployment insurance. This includes the additional $600 federal payment because California law has reclassified many of these workers, even if the company that pays the worker has not yet done so.

Legal Aid at Work provides details on this and more.