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ADP CARES Act Presentation for Accountants
- 1. Copyright © 2019ADP, LLC. ADP Confidential.Copyright © 2019 ADP, LLC. ADP Confidential. Legislative Update Coronavirus Aid, Relief, and Economic Security Act (CARES Act) 1
- 2. Copyright © 2019ADP, LLC. ADP Confidential. 2 ADP is committed to assisting businesses with increased compliance requirements resulting from rapidly evolving legislation. Our goal is to help minimize your administrative burden across the entire spectrum of employment-related payroll, tax, HR and benefits, so that you can focus on running your business. This information is provided as a courtesy to assist in your understanding of the impact of certain regulatory requirements and should not be construed as tax or legal advice. Such information is by nature subject to revision and may not be the most current information available. ADP encourages you to consult with appropriate legal and/or tax advisors. Important Note – This document is NOT designed to address any client or prospect inquiries regarding Covid-19, or ADP’s Preparedness. For client inquiries, please visit the ADP website or contact your HR Business Partner Disclaimers
- 3. Copyright © 2019ADP, LLC. Proprietary and Confidential. 3 Agenda • Tax Provisions • Unemployment Provisions • Paycheck Protection Program. What's Next? Coronavirus Aid, Relief, and Economic Security Act (CARES Act) How ADP Can Help Resources For You and Your Clients
- 4. Copyright © 2019ADP, LLC. ADP Confidential. CARES Act 4 By the Numbers
- 5. Copyright © 2019ADP, LLC. ADP Confidential. Tax Provisions 5 Tax Exclusion for Employer Student Loan Repayment Benefits Education Funding Made Easy Student Loan Assistance Benefits to help you hire faster and reduce turnover. Student Loan Assistances Benefits Made Easy ADP Marketplace Partners The Department of Education (DOE) has directed Federal Student Loan Agencies to stop wage garnishment collections for student loan borrowers. ADP has already begun to complete these liens. Any funds the DOE received on or after 3/13/20 will be returned directly from the DOE to the borrower. This relief does not include student loans issued by private lenders. How ADP is Helping • New student loan repayment benefit • Tax-free basis - not subject to income or payroll taxes • Temporary – 3/27/20 to 12/31/20 • An additional permitted purpose educational assistance (Tuition, fees, books . . . and student loan repayment) • May be paid to the employee or lender directly • Aggregate educational assistance limited to $5,250
- 6. Copyright © 2019ADP, LLC. ADP Confidential. Tax Provisions 6 Deferral of Employer Social Security Tax ALL employers may defer payment of the 6.2% employer Social Security tax through 2020. • Must be paid in equal amounts, by Dec. 31, 2021 & 2022 • Other programs may reduce or even eliminate Employer Social Security tax • Paid Sick/Family Leave Credit • Employee Retention Credit • Small Business Research Credit • Qualified Veterans Credit • Employer Credit for Paid Family and Medical . ADP will be tracking the amounts accrued and handling the reporting, so employers are prepared to pay the amounts when due.* *Go Live date for 4/17 payrolls
- 7. Copyright © 2019ADP, LLC. ADP Confidential. Tax Provisions 7 4/10/2020 Letter to ADP Clients *Go Live date for 4/17 payrolls
- 8. Copyright © 2019ADP, LLC. ADP Confidential. Tax Provisions 8 Employee Retention Credit for Employers Subject to Closure Due to COVID19* Applies to employers whose operations is fully or partially suspended due to COVID- 19. • Private sector employers may claim a refundable tax credit against employer Social Security tax: • 50% of wages paid, up to $10,000 in wages per employee (3/12/20-12/31/20) • Operations reduced or suspended due to COVID-19 • Or, private sector employers with a 50% decline in gross receipts • More than 100 employees: Credit for wages paid during shut down • 100 or less employees: All wages qualify • Employers must choose retention credit OR Payroll Protection Plan *ADP will be helping with Reporting and is currently building now.
- 9. Copyright © 2019ADP, LLC. ADP Confidential. Tax Credit Resources 9 *Go Live date for 4/17 payrolls
- 10. Copyright © 2019ADP, LLC. Proprietary and Confidential. 10 Unemployment Provisions Pandemic Unemployment Assistance • Certain individuals who are not eligible for benefits under other state or federal laws, who are unable to work as a result of COVID-19 are eligible for temporary unemployment benefits assistance during their period of unemployment ending on or before 12/31/20 • Benefits are limited to 39 weeks Emergency Increase in Unemployment Compensation Benefits • Provides for a federal-state partnership to make payments of regular compensation to individuals in amounts determined under state law plus $600. States will be fully reimbursed by the federal government for the extra payments.
- 11. Copyright © 2019ADP, LLC. Proprietary and Confidential. 11 Unemployment Resources Q: My employer offered me my job back, but at reduced hours. I would make more staying on Unemployment. Can I do this? A: No. If your employer offers you work, you must accept that work or you may no longer be eligible for UC. If you return to work at reduced hours, and this results in a reduced weekly income compared to your weekly income prior to filing for UC, you may be eligible for partial UC plus the $600 FPUC per week SOURCE and PA UC FAQ: Click here to read more. Federal Pandemic Unemployment Compensation (FPUC) FAQs
- 12. Copyright © 2019ADP, LLC. Proprietary and Confidential. 12 Paycheck Protection Program Businesses and nonprofit organizations with less than 500 employees • Loan program through June 30, 2020, • Forgivable based on employment and wage levels maintained • Must have been in operation, with employees, on February 15, 2020. 500-employee exception for Hospitality/Food Service (NAICS code 72) - by physical location • Certain franchises may also qualify as separate businesses. Loan amounts = 250% of average monthly payroll costs in 2019, up to $10 million • Alternate periods for seasonal and new employers Payroll costs include wages, health care, state/local employer taxes and other costs Excludes proportionate wages over $100,000/employee and federal employment taxes* ADP's Guide to the Paycheck Protection Program (PPP)
- 13. Copyright © 2019ADP, LLC. ADP Confidential. Resources For You and Your Clients ADP’s Employer Toolkit & PPP Guide 3 Stay up-to-date with: FAQs, Checklists, Webcasts, Articles, Legislative Updates & Employer Tax Guide Learn about the PPP: how to complete the borrower application, and ADP’s PPP Report that can help you determine your eligibility and maximum loan amount.
- 14. Copyright © 2019ADP, LLC. ADP Confidential. COVID-19: We’re all in this together How ADP Can Help 4 Partnering with ADP gives you and your clients the opportunity to focus on what matters. Your business, your clients and your success. You can always count on ADP — even during unprecedented times — with guidance that’s compliant, timely, and actionable. ADP helps businesses navigate uncertainty Coronavirus developments are unfolding quickly, as are the needs of business owners and HR leaders. At ADP, we’re working hard to help our clients make informed decisions by: • Keeping every client informed • Remaining available to answer every question asked by clients and their employees • Providing uninterrupted service We’re keeping our clients informed of regulations, best practices, and business continuity efforts. For ADP HR Outsourcing clients who need to navigate specific topics or concerns, we’re always only a phone call away.
- 15. Copyright © 2019ADP, LLC. ADP Confidential. Other than Pay; What's Your Largest Labor Costs? 4 Partnering with ADP gives you and your clients the opportunity to focus on what matters. Your business, your clients and your success.
- 16. Copyright © 2019ADP, LLC. ADP Confidential. How ADP Can Help ADP’s HR Outsourcing Offerings ADP TotalSource Partnering with ADP gives you and your clients the opportunity to focus on what matters. Your business, your clients and your success. ADP Comprehensive Services ADP HR Outsourcing Experts help businesses take the guesswork out of HR, Compliance, workplace safety, payroll, benefits, and employee questions – so you can move your business forward during these unprecedented times. Whatever your business size or industry, when you choose outsourcing with ADP, you gain premium service and support, as well as proven processes and technology. We offer two ways to outsource, so business can choose what works best: ADP TotalSource Payroll SUI mgmt. Human resources Benefits admin. Affordable care act Workers’ comp 401(k)
- 17. Copyright © 2019ADP, LLC. ADP TotalSource: The Nation’s Largest CertifiedPEO(CPEO) Fiscal ownership CPEOs aresolelyresponsiblefor thepaymentof federal employmenttaxes. Ifacompanyanon-certifiedPEO that doesn’tpaytheirtaxes, theycould beliablefor theunpaid federalemploymenttaxes, latepenalties andinterestrelatedtotheiremployees. 01 Required federalstandards BecauseCPEOs aresolelyresponsibleforthe paymentof federalemploymenttaxes, theymust meetspecific requirementsregardingtax status,background,experience, business location,financialreporting,andmore. 02 Financial guarantee The certificationprogramalsorequiresaPEO to posta bondeachyearof upto $1 millionguaranteeingpaymentofits federal employmenttax liabilities. 03 Taxrestart elimination Certificationeliminatesthewage-base“restart”for certainpayrolltax purposesfor PEO customersthatjoin or leavea PEO relationshipmid-year. 04 Customer eligibilityfor tax credits CPEO clientshaveexpress authoritytocontinuetoclaim specifiedtax creditsfor which theywouldqualifyabsenta PEO relationship. 05 ThePEO relationship does notimpactthe clientsability to takeadvantageofFFCRAor CARESAct
- 18. Copyright © 2019ADP, LLC. ADP Confidential. 18 Thank you for attending! Subscribe to our Eye on Washington email alerts at www.adp.com/eyeonwashington For more workforce trends and insights, check out www.adp.com/blogs Register for future events in our Workplace Spotlight series at www.adp.com/compliancespotlight The information provided in this document is for informational purposes only and not for the purpose of providing legal, accounting, or tax advice. The information and services ADP provides should not be deemed a substitute for the advice of any such professional. Such information is by nature subject to revision and may not be the most current information available. ADP and the ADP logo are registered trademarks of ADP, LLC. ADP A more human resource. is a service mark of ADP, LLC. All other marks are the property of their respective owners.
Editor's Notes
- #2 Thank you for taking the time to connect on the newest legislation. The CARES act is an important topic for both you as a trusted advisor, as well as for your clients and their employees who could be negatively impacted by COVID19.
- #4 Today I want to focus our time on 3 key areas: The key components of the CARES act How ADP Can help And lastly, 3. Resources for you and your clients
- #5 The new legislation is designed to pump more than $2 trillion into the U.S. economy by providing support to American Workers and businesses. Let’s take a look at how that $2 trillion is broken down: Individuals - $560 Billion Big Corporations - $500 Billion Small Business and Non Profits - $377 billion State and local Governments - $340 billion Public Health - $153.5 billion Education - $43.7 billion Safety net - $26 billion
- #6 Employers are permitted to provide a student loan repayment benefit to employees, contributing up to $5,250 annually toward an employee’s student loans. Such payments would be excluded from the employee’s income. The $5,250 cap applies to both the new student loan repayment benefit and educational assistance. The provision applies to any student loan payments made by an employer on behalf of an employee after date of enactment and before January 1, 2021 How ADP is Helping! The Department of Education (DOE) has directed Federal Student Loan Agencies to stop wage garnishment collections for student loan borrowers. ADP has already begun to complete these liens. Any funds the DOE received on or after 3/13/20 will be returned directly from the DOE to the borrower. This relief does not include student loans issued by private lenders. Marketplace Can Help! We have several student loan apps as part of the ADP Marketplace to help with student loan assistance benefits and education funding <Read off the Apps> Links to Marketplace Apps Peanut Butter on ADP Marketplace Loan Benefits on ADP Marketplace Gift of College on ADP Marketplace
- #7 Employers may defer payment of the employer share of the Social Security tax, beginning after the effective date of the CARES Act through December 31, 2020. Deferred tax amounts would be paid over two years, in equal amounts due on December 31, 2021 and December 31, 2022. Other programs may reduce or even eliminate Employer Social Security tax <read bullets> The deferral is not available to employers receiving assistance through the Paycheck Protection Program ADP can help and will be tracking the amounts accrued and handling the reporting, so employers are prepared to pay the amounts when due. * Expected go live date is for 4/17 payrolls *
- #8 Employers may defer payment of the employer share of the Social Security tax, beginning after the effective date of the CARES Act through December 31, 2020. Deferred tax amounts would be paid over two years, in equal amounts due on December 31, 2021 and December 31, 2022. Other programs may reduce or even eliminate Employer Social Security tax <read bullets> The deferral is not available to employers receiving assistance through the Paycheck Protection Program ADP can help and will be tracking the amounts accrued and handling the reporting, so employers are prepared to pay the amounts when due. * Expected go live date is for 4/17 payrolls *
- #9 Private-sector employers are allowed a refundable tax credit against employer Social Security tax equal to 50 percent of wages paid by employers to employees during the COVID-19 crisis, up to $10,000 per employee. The credit is available to employers whose operation is fully or partially suspended due to orders from a governmental authority limiting commerce, travel, or meetings due to COVID-19, or who experienced a 50 percent decline in gross receipts when compared to the same quarter of the prior year.. For employers with more than 100 full-time employees, this credit is available for wages paid to employees that provided no services during the shutdown. For employers with fewer than 100 full-time employees, all wages qualify for the credit, without regard to whether the employer was in operation. Employers must choose retention credit OR Payroll Protection Plan
- #10 Employers may defer payment of the employer share of the Social Security tax, beginning after the effective date of the CARES Act through December 31, 2020. Deferred tax amounts would be paid over two years, in equal amounts due on December 31, 2021 and December 31, 2022. Other programs may reduce or even eliminate Employer Social Security tax <read bullets> The deferral is not available to employers receiving assistance through the Paycheck Protection Program ADP can help and will be tracking the amounts accrued and handling the reporting, so employers are prepared to pay the amounts when due. * Expected go live date is for 4/17 payrolls *
- #11 *Could be specific state provisions, see the Eye on Washington for more information. Pandemic Unemployment Assistance Certain individuals who are not eligible for benefits under other state or federal laws (such as self-employed workers, part-time workers and those with limited work histories) who are unable to work as a result of COVID-19 are eligible for temporary unemployment benefits assistance during their period of unemployment ending on or before December 31, 2020. Benefits are limited to 39 weeks. Emergency Increase in Unemployment Compensation Benefits Provides for a federal-state partnership to make payments of regular compensation to individuals in amounts determined under state law plus $600. States will be fully reimbursed by the federal government for the extra payments.
- #12 *Could be specific state provisions, see the Eye on Washington for more information. Pandemic Unemployment Assistance Certain individuals who are not eligible for benefits under other state or federal laws (such as self-employed workers, part-time workers and those with limited work histories) who are unable to work as a result of COVID-19 are eligible for temporary unemployment benefits assistance during their period of unemployment ending on or before December 31, 2020. Benefits are limited to 39 weeks. Emergency Increase in Unemployment Compensation Benefits Provides for a federal-state partnership to make payments of regular compensation to individuals in amounts determined under state law plus $600. States will be fully reimbursed by the federal government for the extra payments.
- #13 Businesses and nonprofit organizations with 500 or fewer employees, as well as sole proprietors, independent contractors and self-employed individuals, may be eligible for a new loan program from February 15, 2020 to June 30, 2020. This program will provide federally guaranteed loans, in amounts determined by a formula, with a maximum loan amount of $10,000,000. Loan proceeds can be used for payroll, mortgage interest or rent, health-care benefits payments, utility payments, and certain other costs, and are forgivable in an amount equal to the sum of such costs incurred or payments made during the eight weeks after loan disbursement, if employers maintain employment and wage levels. There is flexibility for some businesses for determining the 500-employee limit. For example, Hospitality and Food Service industries may evaluate the number of employees based on each physical location. Certain franchises may also qualify as separate businesses, and the SBA will waive certain existing SBA affiliation rules The maximum amount of a loan is 2.5 times the average monthly payroll costs for the year prior to the loan date, up to a limit of $10,000,00 Payroll costs include wages, health care, state/local employer taxes and other costs Excludes proportionate wages over $100,000/employee and federal employment taxes For the most updated information on the Paycheck Protection Program, please visit ADP’s new PPP Reporting website where you can learn more about the PPP, how to complete the borrower application, and ADP’s PPP reports that can help you determine your eligibility and maximum loan amount. *Note: On the night of April 6, 2020 the federal government issued its latest guidance regarding the Paycheck Protection Program (PPP) under the CARES Act. In that guidance, the government clarified that federal employment taxes assessed on the employer (e.g., FICA) are not taken into account in determining “payroll costs” under the PPP.
- #14 This ADP Coronavirus (COVID-19) Employer Preparedness Toolkit was designed to help clients navigate the challenges their workforce is facing. This is a external resource. Here you’ll find FAQs, checklists, webcasts and articles.. Within the Preparedness tool, there is a link to the ADP Employment Tax Guide, Which includes Federal, state and local information about changes tax agencies are making in response to COVID-19 virus are available here. For the most updated and comprehensive information on the Paycheck Protection Program, please visit ADP’s new PPP Reporting website where you can learn more about the PPP, how to complete the borrower application, and ADP’s PPP reports that can help you determine your eligibility and maximum loan amount. The site includes an overview of PPP, PP Loan Application Details, ADP PPP report and Additional Resources and FAQs. Links to resources: ADP Preparedness Toolkit Spark Blog ADP's Guide to the Paycheck Protection Program (PPP)
- #15 These are extraordinary times. Now, more than ever, we are united in our mission — beat COVID-19. At ADP, we’re working around the clock and around the world to take care of our employees so they can help take care of our clients and their employees. You can always count on ADP — even during unprecedented times — with guidance that’s compliant, timely, and actionable. We’re keeping our clients informed of regulations, best practices, and business continuity efforts. For ADP HR Outsourcing clients who need to navigate specific topics or concerns, we’re always only a phone call away. Important topics clients are navigating and ADP HRO can help with are: • Employee tests positive — What now? • Workplace safety • Employee travel • Employee health and privacy • Employee refusal to come to work • Face masks at work • Visitors • Employee leave • Payroll • Remote work • Workers’ compensation • Employee leave • Families first • CARES act • Emergency FMLA act • Emergency Paid Sick Leave • Wage and hour
- #16 These are extraordinary times. Now, more than ever, we are united in our mission — beat COVID-19. At ADP, we’re working around the clock and around the world to take care of our employees so they can help take care of our clients and their employees. You can always count on ADP — even during unprecedented times — with guidance that’s compliant, timely, and actionable. We’re keeping our clients informed of regulations, best practices, and business continuity efforts. For ADP HR Outsourcing clients who need to navigate specific topics or concerns, we’re always only a phone call away. Important topics clients are navigating and ADP HRO can help with are: • Employee tests positive — What now? • Workplace safety • Employee travel • Employee health and privacy • Employee refusal to come to work • Face masks at work • Visitors • Employee leave • Payroll • Remote work • Workers’ compensation • Employee leave • Families first • CARES act • Emergency FMLA act • Emergency Paid Sick Leave • Wage and hour
- #17 Partnering with ADP gives you and your clients the opportunity to focus on what matters - Your business, your clients and your success. ADP HR Outsourcing Experts help businesses take the guesswork out of HR, Compliance, workplace safety, payroll, benefits, and employee questions – so you can move your business forward during these unprecedented times. Whatever your business size or industry, when you choose outsourcing with ADP, you gain premium service and support, as well as proven processes and technology. We offer two ways to outsource, so business can choose what works best: ADP TotalSource and ADP Comprehensive Services With TotalSource, ADP’s PEO, the business remains in control over the day-to-day activities in their business while ADP TotalSource becomes the employer of record to help manage the employee administration for your business. An owner can share certain employer responsibilities with an expert in employment, align w/ Strategic Single-Source Provider, Reduce exposure, partner with a world's authority in employment and risk and benefit from Fortune 500 caliber Expertise & Technology. In so doing the business can deliver a broad range of HR and benefits services like that of a larger organization and become an employer of choice!
- #18 ADP TotalSource is a certified PEO which means your clients will benefit from the following <Review the 5 bullets as needed> More specifically, the PEO relationship does not impact the clients ability to take advantage of FFCRA or the CARES Act, including: Tax Credits PPP Tax Deferral
- #19 Thank you for taking the time to connect and I will continue to keep you posted on relevant information.