There are numerous relief programs available to lessen the burden of employee expenses and help businesses survive, including pre-existing benefits as well as benefits released as part of the Families First Coronavirus Response Act (the FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act. However, each business is faced with determining which relief programs will have the most positive impact on their business, while also ensuring the benefits they choose can work together.
Baker Tilly’s coronavirus benefit coordination matrix not only explains who can use each benefit but also how each benefit coordinates with others.
A preview of the matrix is shown below, highlighting the Paycheck Protection Program:
Paycheck Protection Program (PPP)
A PPP loan is a small business loan issued by private lenders and fully guaranteed by the federal government. The principal purpose of this loan is to help employers retain their employees. The loans are intended to cover eight weeks of payroll expenses, applied for at any date between Feb. 15, 2020, and June 30, 2020.
A key component of the loan is that it may be fully or partially forgiven eight weeks after the loan is taken, if borrowers verify the loan proceeds were properly used for payroll and other related costs. The extent of forgiveness depends on factors relating to employee retention.
A small business (as defined by the Small Business Act (SBA) with 500 or fewer employees or a small business that otherwise meets the SBA’s size standards (if employing more than 500 employees)
Section 501(c)(3) not-for-profits with 500 or fewer employees; sole proprietors; independent contractors; gig economy workers; self-employed individuals
Restaurants, hotels and other “accommodation and food services” coded businesses are eligible if each location has 500 or fewer employees
Independently owned franchises with under 500 employees are also eligible when approved by the SBA
Employers taking out a small business loan under the PPP will not be permitted to take the employee retention credit
Loans forgiven under the PPP will prohibit an employer from utilizing the payroll tax deferral
Borrowers may apply for a PPP loan in addition to:
Download the matrix to learn more about which benefits may help your business during this challenging time, such as: