Q&A on COVID-19 stimulus bills
For information about how recent legislation will impact your small business or nonprofit, click here to visit my Small Business webpage.

Information & resources on coronavirus

Resources for Delaware small businesses and non-profits

The Delaware district office of the Small Business Administration (SBA) can connect you with resource partner organizations that provide advice and guidance to small businesses, including SCORE Delaware, SBDC Delaware, and the Women's Business Center at True Access Capital.

The Association of Women’s Business Centers and America's SBDC have consolidated information on COVID-19 resources from federal agencies. Visit this page to inform your small business or nonprofit operation: https://covid-sb.org/

Paycheck Protection Program

The CARES Act established the Paycheck Protection Program (PPP). The PPP has provided much-needed relief to millions of small businesses so they can sustain their businesses and keep their workers employed. Small businesses and eligible nonprofit organizations, Veterans organizations, and Tribal businesses, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards. The program closed to new applicants, temporarily, in August.

In the most recent round of relief legislation, Congress reopened the PPP to eligible first-time borrowers. It also provided $284 billion so that hard-hit businesses and nonprofits may apply for a second forgivable loan under the program. Generally, applicants who have fewer than 300 workers and experienced a revenue decline of 25% or greater in any single calendar quarter in 2020, relative to the same quarter in 2019, are eligible for a second PPP loan. For further details, see this summary of newly enacted small business relief.

The maximum loan amount for most borrowers is 2.5 times payroll costs in a typical (pre-pandemic) month. One exception is that restaurants and hotels qualifying for a second PPP loan may receive 3.5 times payroll costs. The loan is all or partially forgivable. Forgiveness is based on the extent to which the borrower retains or rehires workers. Loans require no collateral or personal guarantees, carry a 1% interest rate, and come with an automatic 6-month deferment.

For more information and the application form, please see the Treasury's small business webpage.

The best way to apply for a first- or second-round PPP loan is to consult your existing bank. If it is not offering PPP loans, ask which banks in your community are, or you may want to consider online lenders, which include some popular tax and accounting websites.

Other Small Business Loans and Grants

The first coronavirus supplemental bill funded Economic Injury Disaster Loans (EIDLs), which remain available. These loans provide small businesses with long-term working capital loans, at a rate of 3.75% for businesses and 2.75% for nonprofits. Business must be deemed creditworthy and may have to provide collateral. To apply, visit the SBA Disaster Assistance website

The CARES Act also provided that EIDL applicants would be eligible for an up-front grant of up to $10,000, which does not need to be repaid. General availability of these grants has expired. However, newly enacted legislation will allow eligible borrowers in low-income communities to receive the full $10,000 grant, whether they did not apply previously or received an amount less than $10,000.

Applicants must separately request the EIDL grant, but are no longer required. You may also contact the Delaware SBA office at: https://www.sba.gov/offices/district/de/wilmington.

The CARES Act, the third COVID-19 response package, provided debt relief for businesses with an existing SBA-backed loan (other than PPP), including 7(a), 504, and microloans. This provision, authored by Senator Coons, was renewed under the December 2020 legislation. Eligible borrowers will receive 3 more months of loan forgiveness. Those in hard-hit industries will receive an additional 5 months of forgiveness. Talk to your lender about this relief program.

The SBA will continue to update its website with further information here.

Employee Retention Tax Credit

For businesses and nonprofits that do not receive a PPP loan, an important tool is the Employee Retention Tax Credit. The Employee Retention Credit is a fully refundable and, in some cases, advanceable tax credit for employers that must fully or partially suspend their business or experience a significant decline in gross receipts due to COVID-19. The December 2020 relief legislation expanded the credit and extended it until July 1, 2021. Going forward, employers with a 20% or year-over-year decline in gross receipts are eligible for a credit equal to as much as $7,000 per retained worker per calendar quarter. Now, businesses that do receive a PPP loan will have access to the ERTC with respect to wages not paid for with forgiven loan proceeds.

See the IRS FAQ on the Employee Retention Credit.

Delaware small businesses in the hospitality sector

Information on the newly created State of Delaware program for small businesses in the hospitality sector can be found here.

Delaware’s rural businesses

Many small businesses impacted by COVID-19 might also be able to qualify for USDA Rural Development programs as well. Additionally, a number of small businesses and agriculture concerns don’t always qualify for SBA programs, but are still impacted, and USDA is also helping rural businesses and farmers. More can be found about USDA’s Rural Development programs in Delaware here: www.rd.usda.gov/de.

Changes to Tax Filing

The IRS tax filing deadline for individuals and households was moved back: Tax Day was July 15, 2020. This applied to individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax. 

The deadline for businesses was pushed to July 15, as for individuals. Businesses claiming COVID-19-related tax provisions will need to adjust their tax returns accordingly.

Employers that do not receive a PPP loan may also 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. Deferral is not provided to employers that avail themselves of SBA 7(a) loans designated for payroll.

Small Business Tax Credits for New Paid Sick Leave Requirements

The Families First Coronavirus Response Act (FFCRA), H.R. 6201, mandates that employers with 500 or fewer employees are required to provide two workweeks of paid sick leave to full time employees taking leave for purposes related to COVID-19. The legislation also expands job-protected Family and Medical Leave Act (FMLA) leave for childcare responsibilities affected by COVID-19. For both paid sick and family leave, the bill includes provisions that may exclude healthcare providers, emergency responders, and employees in certain small businesses from leave requirements. This most recent relief bill passed in December did not extend this requirement for employers, so it is set to expire on December 31, 2020. 

For detailed information, see the Department of Labor FFCRA "Questions and Answers" webpage or the "Emergency Leave" section of my Frequently-Asked-Questions webpage.

To help alleviate some of the burden of the leave requirement on employers who were mandated to offer the expanded paid sick and family leave, the FFCRA provides refundable payroll business tax credits. This credit is for small nonprofit and for-profit businesses with fewer than 500 employees. Those with fewer than 50 may claim an exemption.The most recent relief bill extends the tax credits through March 31, 2021 for businesses that want to voluntarily offer the expanded paid sick and family leave using the FFCRA framework. 

The IRS should issue new guidance for the extension of this credit. Please visit https://www.irs.gov/coronavirus/new-employer-tax-credits 

How the credit works:

Employers will be required to initially pay for the new sick and family leave benefits, but a large portion of the costs will be paid back through refundable tax credits against the 6.2% Social Security payroll tax imposed on employers.

  • For the new sick leave benefits, the credit is limited to $511 per day per employee for workers taking leave because they are sick, have been advised to quarantine, or are experiencing COVID-19 symptoms. The credit is capped at a $5,110 total per employee. For workers who are taking leave to care for an individual with COVID-19 or related symptoms, the credit is limited to $200 dollars per day per worker. The credit is capped at a total of $2,000 per employee. 
  • For the expanded FMLA benefits, the credit is limited to $200 per day per employee for workers taking leave because they must care for their own child whose school or childcare has been closed due to or related to COVID-19. The credit only begins after the worker has taken 10 days off in the form of unpaid leave, paid vacation, personal leave, or another form of paid leave. The credit can't exceed $10,000 in total for any worker.

Those self-employed can receive refundable tax credits against the self-employment tax that are similar to those allowed for employers. The credit is limited to $511 per day for sick leave and $200 per day for workers taking qualified family leave. The number of eligible days is 10 sick days per worker and 50 days for family related leave.

How to claim:

Employers will be able to reduce their semi-weekly or monthly payroll tax payments by the amount of their anticipated credit. The provisions are effective on April 1, 2020 and apply to leave taken between April 1, 2020 and March 31, 2021. Guidance has been issued here for both employers and employees on qualifying reasons for leave, eligible employees and employers, duration of leave, calculation of pay, and available tax credits. The IRS is also continuously updating www.irs.gov/coronavirus with information to help taxpayers, businesses, and others affected by COVID-19. I will continue to share updates with you as they become available.

How to Help: 

For Companies with Medical Supplies, Equipment, and Services

The Federal Emergency Management Agency (FEMA) has provided the following information regarding medical supplies, equipment, and services for companies interested in coordination:

  • To sell medical supplies or equipment to the federal government, please email specifics to covidsupplies@fema.dhs.gov 
  • If you have medical supplies or equipment to donate, please provide us details on what you're offering. 
  • If you are a private company that wants to produce a product related to the COVID response, please email nbeoc@max.gov
  • If you are a hospital or other company in need of medical supplies, contact your State Department of Public Health and/or Emergency Management
  • For non-medical supplies, services, or equipment, if you are interested in doing business with FEMA, visit the FEMA Industry Liaison Program.

Additional Resources: