Thursday, March 26, 2020

Coronavirus - finance #2

Firstly, the Families First Coronavirus Response Act is enacted law and hence apart from the not yet (7:00 a.m.) enacted legislation to pay $1,200 ($500 for children) to about 90% of the US population and provide unemployment compensation. It pertains to sick leave and family leave.

TurboTax summarizes the Act here. The following list is more brief, showing only the topics.

Relief for Regular Employees
- Emergency Sick Leave.
- Paid Sick Leave.

Relief for Self-Employed and Small Businesses
- Self-Employed Tax Credit for Sick Leave.
- Self-Employed Tax Credit for Family Leave.
- Small Business Tax Credit for Paid Sick Leave.
- Small Business Tax Credit for Paid Family Leave.

MarketWatch has this story.

The relief for self-employed and small businesses is in the form of tax credits. Thus it is far from immediate and doesn't solve current cash needs brought us by the pandemic shutdown. Of course, a self-employed person who makes estimated tax payments could reduce them. On the other hand, the self-employed people who don't make estimated tax payments don't have that opportunity. I bet the latter is the case for nearly all gig workers such as Uber or Lyft drivers.

Regarding the relief for regular employees, it appears there is no overall exception for an employer with only one or a handful of employees, which could be devastating for the employer. There is an exception for employers with less than 25 employees, but it appears to be about requiring the employee being able to return to work with the same employer after leave. One news article referenced by the Wikipedia page says, "Republicans were able to insert language exempting smaller businesses from the requirements." However, it wasn't clear what said exemption is.

Importantly, self-employed people are not eligible for unemployment compensation. That may change soon for some, e.g. gig workers. Related:
Unemployment benefit claims skyrocket to 3.283 million.
Coronavirus stimulus relief plea from self-employed to Washington: 'We need help now'




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