August 28, 2020
Inside look: Tax deferral deferred
A couple weeks ago, we talked about how an executive order from President Trump would defer employee payment of Social Security taxes (6.2% of their paychecks) between September 1 and December 31—adding a bit of padding to everyone’s wallet through the end of this year. But that’s definitely not going to happen on September 1.
With less than a week to go till the proposed rollout date, the Treasury Department has not yet issued any guidelines for employees and employers. This is in part due to the White House’s dissatisfaction with the Treasury and IRS’s drafted rules. Bloomberg reports:
The White House wants employers, not employees, to be responsible for paying back the Social Security levies when they come due next year, one of the people said. Under current law the IRS can seek to collect unpaid payroll taxes from both employers and employees.
The proposed deferral process is also complicated because it “raises the prospect that you have to get information to 100 million people,” ask them whether they want to opt in, and then apply the benefit only to those electors, Pete Isberg, president of the National Payroll Reporting Consortium, told the Washington Post. Some industry groups have described the logistics of the deferral as “unworkable,” which may lead businesses to choose not to offer the deferral and simply withhold taxes as usual.
Our payroll experts here at Gusto expect the Treasury and IRS to issue some guidance or next steps before September 1 when this deferral is supposed to take effect. Check back on our breakdown of the memo, where we’ll post more information as soon as we learn more.
Is your business prepared for hurricane season?
It’s vital for small businesses to be prepared for these situations in order to recover. Small business owner and Washington Post writer Steve Friess created this step-by-step guide to developing a disaster preparedness plan for your business after seeing his family’s wholesale bagel factory in South Florida through a natural disaster.
One of the most important steps? Having the right insurance coverage. Get tips for finding the right insurance after a disaster from real businesses who have been there in our guide, and also check out these best practices from National Law Review.
Webinars to watch
The Ultimate Forecasting Tool to Help Your Business Survive COVID-19
Gusto data shows that the clock is quickly running out for small businesses, with nearly half reporting that they have six months or less of cash reserves to continue staying in business. How do you ensure you have enough cash to keep your doors open and grow in the future? You get really good at cash flow forecasting.
Tune into our webinar next Tuesday, September 1, at 12pm PT | 3pm ET, to learn how to build your own forecast with our free template. You’ll hear our experts’ tips and suggestions on how to use the forecasting template, see the business model in action, and ask any questions of its creators, Jirav’s Blake Oliver and Andi Smiles. Register here.
EIDL Loans & PPP Forgiveness
Our partners at COVID Loan Tracker are co-hosting a webinar with the Small Business Administration (SBA) next Thursday, September 3, at 12:30pm PT | 3:30pm ET. SBA officials will be answering small business owners’ questions about Economic Injury Disaster Loans (EIDL)—including reconsideration—and sharing the latest updates about PPP forgiveness live. Register here and submit your questions!
COVID gag orders, and other headlines from the week
- Covid Gag Rules at US Companies Are Putting Everyone at Risk (Bloomberg Businessweek) — Some American businesses are banning their employees from discussing COVID-19 cases due to privacy concerns—but this can infringe upon employee rights to discuss workplace conditions that can affect their safety. Here’s our guidance on how to navigate both privacy and safety concerns.
- A Pair of Black-Led Banks Have Merged to Form an Institution Worth More Than $1 Billion (CNN Business) — City First Bank and Broadway Federal Bank merged this week, combining their assets for “more lending power.” They now have a combined $1 billion to better support Black small business owners.
- The Wait for the $300 Unemployment Benefit Can Depend on a State’s Computers. (New York Times) — Some states have been able to quickly pay out the new $300-a-week unemployment benefit, while others are stalled due to tech issues. A lack of investment in state unemployment systems has made it difficult to adjust for changes in the program, like a different funding source and new restrictions.
Top relief options for the week
- Ladies Who Launch is a year-long launch program that provides an immediate cash grant of $5,000 to $25,000, mentorship, advisory support, and amplification for women (female identifying and non-binary) entrepreneurs. Applications are due on September 1.
- Energize Colorado Gap Fund will provide more than $25 million in small business loans and grants to sole proprietors, businesses, and nonprofits with less than 25 full-time employees. Businesses can apply for up to $35,000 in financial assistance. Priority will be given to businesses in rural areas, as well as veteran-, women-, and minority-owned businesses. Applications open on Monday, August 31.
- Maine’s Economic Recovery Grant Program will support small nonprofits and businesses that demonstrate an expected 20% loss in revenue minus expenses for 2020. Applications will be accepted through September 9.
- See more relief options in our Small Business Relief Finder.
Want more small business news and resources? Check out past editions in our archive.