David Michel

The message below is from David Lehman, Commissioner of the Connecticut Department of Economic and Community Development (DECD) regarding assistance for small businesses and nonprofits during the COVID-19 pandemic:

We know and appreciate that businesses and nonprofits want to not only preserve their bottom line, but to stand by the employees they have depended on in the past and will need again as Connecticut recovers from this emergency. There are a variety of federal and state programs that may allow you to continue making payroll and providing health benefits with substantial outside funding. We encourage you to consider these programs as alternatives to immediate layoffs, and as a source of subsidies that will allow you to rehire your staff.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act that was signed by the President on Friday includes several important benefits for small businesses and nonprofits in Connecticut:​

Paycheck Protection Program (PPP) Loans: Provide cash-flow assistance through federally-guaranteed loans to employers who maintain their payroll during this emergency. If employers maintain their payroll, the loans will be forgiven.

Economic Injury Disaster Loans & Emergency Injury Grants: An emergency advance of up to $10,000 to small businesses and private nonprofits harmed by COVID-19 within three days of applying for an SBA Economic Injury Disaster Loan (EIDL). Grants and loans may be used to keep employees on payroll, pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments.

Small Business Debt Relief Program: Provides immediate relief to small businesses with non-disaster SBA loans, in particular 7(a), 504, and microloans. Under this program, the SBA will cover all loan payments on previously secured SBA loans, including principal, interest, and fees, for six months.

Employee Retention Credit for Employers Subject to Closure or Experiencing Economic Hardship: A refundable payroll tax credit for 50% of wages paid by eligible employers to certain employees during the COVID-19 crisis.

Delay of Payment of Employer Payroll Taxes: Allows taxpayers to defer paying the employer portion of certain payroll taxes through the end of 2020, with all 2020 deferred amounts due in two equal installments, one at the end of 2021, the other at the end of 2022.

Counseling and Training: Local resource partners can be found here.

For more details on the CARES Act visit Connecticut's COVID-19 Business Resource Portal.

In addition to the above initiatives, employers should also be aware of the following programs:

Federal Emergency Paid Leave Program: Through the end of 2020, employers with fewer than 500 employees must provide 80 hours of paid sick leave and 10 weeks of paid family leave. Note that employers will be reimbursed by the IRS for 100% of the paid leave in 2 weeks or less. They will also be reimbursed for employees’ health care premiums during leave. The current IRS guidance can be found here.

CT DOL’s Shared Work Program: Allows employers to reduce employees’ hours by up to 60% and DOL will step in to provide unemployment insurance (UI) benefits that help offset the lost wages, as well as the new federal UI supplement. More information about the program can be found here.

Many of these programs are also open to self-employed individuals. I encourage Connecticut businesses to act quickly to take advantage of the many resources being provided by the state and federal government during this crisis. Businesses should review these resources and reach out to lenders, landlords, and others as you consider making difficult decisions at this time.

Last week, Congress passed the Coronavirus Aid, Relief, and Economic Security Act, and it was signed into law by President Trump on Friday.

To help Connecticut residents understand the details of the bill and how it can potentially provide assistance during the COVID-19 crisis, Senator Chris Murphy's office has compiled a list of frequently asked questions. Addressed below are questions relating to direct payments and unemployment insurance.

For further information on the state's response to the coronavirus, visit ct.gov/coronavirus

Direct Payments
How will I know if I am getting a check or not? Do I have to sign up?

• Individuals with adjusted gross income under $75,000 ($112,500 for head of household and $150,000 for joint filers) who are not dependents of another taxpayer are eligible for the full rebate.
• The rebates will be paid out as advance refunds (in the form of checks or direct deposit) based on your 2019 tax returns (or 2018, if a 2019 return has not yet been filed).
• Non-filers will have to file a tax return to qualify, but we are waiting on the IRS to provide more guidance.
• These payments are available to anyone with a Social Security Number (but not an ITIN number), including those who have no income, as well as those whose income comes entirely from non-taxable, means-tested benefit programs, such as Social Security or Social Security Disability Insurance.
• The rebate is treated like other refundable tax credits and not considered income, so it will not be taxed.

How much will I get and when?

• Each eligible adult in a household will receive $1,200 with an additional $500 for each dependent child in the household under 17.
• These payments begin phasing out at a 5% rate for single filers above $75,000, head of household filers above $122,500, and joint filers about $150,000. For example, an individual earning $87,000 per year would receive a payment of $600, and an individual earning $99,000 per year and above would not receive a payment.
• The IRS hopes to begin issuing the rebate checks within three weeks.

Unemployment Insurance (UI) and Emergency Leave
Am I eligible for UI?

• You are eligible if you’ve been laid off, are working part-time, if you are self-employed, an independent contractor, and if you’re working in the “gig economy” because of COVID-19.

What is the benefit?

• The exact amount you can receive through unemployment depends on your previous earnings and what you receive from the state, but between now and July 31, an additional $600 will be added to every unemployment compensation check, so no one will receive less than $600 per week. You can apply for unemployment insurance here.
• If you exhaust the weeks of unemployment compensation available to you through CT DOL, you will be eligible for an additional 13 weeks of benefits. These benefits will be federally-funded, but you will still receive them through Connecticut.
• The Families First Coronavirus Response Act provided $500 million for states to increase capacity to deal with unemployment insurance claims, which have been surging in Connecticut since early March.

Which employers must provide paid sick leave and family leave?

• In general, a private employer with fewer than 500 employees is a “covered employer” for both the paid sick leave and paid family leave requirements.
• The Secretary of Labor has additional authority to exempt employers with fewer than 50 employees from the requirement to provide leave for caring for children due to closures of schools or child care, both in the paid sick leave and paid family leave context.

How much paid sick leave are employees eligible to take?

• For paid sick leave, employees are eligible to take up to 80 hours (two weeks) of paid time, depending on the employee’s regular schedule, at 100% of the employee’s regular rate of pay (up to $511 per day) due to quarantine/isolation order, health-care provider guidance to self-quarantine, or seeking diagnosis for symptoms of COVID-19.
• Sick leave pay is limited to 2/3 of the employee’s regular rate of pay (up to $200 per day) for caring for someone who is isolated/quarantined and for taking care of a child due to a closure of school or child care.

How much paid family leave are employees eligible to take?

For paid family leave, employees are eligible to take up to 10 additional weeks of paid time at 2/3 of the employee’s regular rate of pay (up to $200 per day) solely to take care of a child due to a closure of school or child care or the unavailability of a child care provider.