Tag

Iowa

Josh Kendall
In COVID-19, Tax Implications

COVID-19 & Iowa Unemployment Tax Payment Extension

Governor Kim Reynolds has approved a measure extending the deadline for submitting first-quarter unemployment tax payments to July31, 2020, the Iowa Department of Workforce Development announced today.  However, the extension will only apply to employers with 50 or fewer employees.  Eligible employers also must be in good standing with no delinquencies in quarterly payments.

Unemployment tax and wage reports will remain due on April 30, 2020 as normal, but the Department is allowing for an extension to submit the tax payment until July 31, 2020.

To qualify for the extension, the employer must be current on all quarterly tax payments before the 1st quarter of 2020 regardless of whether or not they are seeking an extension of tax payment. All employers must file Quarterly Employers Contribution and Payroll Report electronically by 4:30 on April 24th to avoid late report filing penalty.

Payments for Q1 would be due when Q2 payments are due; July 31, 2020.  No interest or penalties will accrue for delayed payments for the eligible group.  The extension of payment deadline without interest is not a holiday or forgiveness and the taxes will be due July 31, 2020.  Employers still need to file their quarterly reports, which contain employee wage data necessary to compute benefit eligibility and amounts to be paid.

For an employer who elects to take advantage of the extension, please contact the IA DWD  Tax division at either 1-888-848-7442 or by sending an email to Q1tax@iwd.iowa.gov.  The DWD recommends sending an email versus a phone call as there is a high call volume during this time that may lead to extended wait times.  Employers must notify the DWD of intent to delay payment by Friday, April 24th at 4:30 pm.

Our office will be monitoring these situations closely and will send out additional announcements or make postings on our website (https://thomas-and-company.com/covid-19/) as we become aware of new developments.

Mike Parker
In CARES ACT, COVID-19

The CARES Act & the Iowa Workforce Development

Iowa Workforce Development (IWD) is preparing to outline the benefits of Coronavirus Aid, Relief and Economic Security (CARES) Act of 2020, which provides unemployment benefits for self-employed, independent contractors, non-profit employees, gig economy workers, those who have exhausted other unemployment benefits, and those who may not have sufficient work history to qualify for a regular claim.  The CARES Act also allows those eligible for unemployment benefits in any amount to be paid an additional $600 weekly benefit amount.  After receiving guidance from the Department of Labor, the IWD has begun to shift resources and technology to be able to pay qualified individuals benefits as quickly as possible. The IWD estimates that this alignment will occur within the next 10 days.

The CARES Act provides the following unemployment insurance benefit programs:

  • Federal Pandemic Unemployment Compensation (FPUC) – The FPUC program provides individuals who are collecting regular Unemployment Compensation (UC), Pandemic Emergency Unemployment Compensation (PEUC), Pandemic Unemployment Assistance (PUA), Extended Benefits (EB), Short Time Compensation (STC), Trade Readjustment Act (TRA), Disaster Unemployment Assistance (DUA), and payments under the Self-Employment Assistance (SEA) program, with an additional $600 per week in benefits.  The first week an associate can be compensated on this benefit is the week beginning March 29, 2020 and the last week is the week ending July 25, 2020.  The IWD’s goal is to issue payments in the next 10 days to those who are eligible.  Please note that associates cannot quit their jobs and continue to draw benefits.  If associates refuse to return to work without a documented medical note consistent with the Families First Act, associates will be disqualified from all benefits, as well as the additional $600 payment.  Finally, if employers receive a loan under the PayCheck Protection Act and places associates back on the payroll, full-time, associates will no longer be eligible for unemployment or FPUC benefits.  Please continue reading about PUA, PEUC, PPP, and other important notes below for additional information.
  • Pandemic Unemployment Assistance (PUA) – This program provides up to 39 weeks of unemployment benefits to individuals who are self-employed, independent contractors, nonprofit employees and gig economy workers, as well as to individuals working part-time, or who otherwise would not qualify for regular UC or EB under state or federal law or PEUC.   An associate can be compensated beginning February 2, 2020, or the first week a claimant was unable to work as a result of COVID-19.  The last week that this benefit is payable is the week ending December 26, 2020. The IWD’s goal is to issue payments in the next 10 days to those who are eligible.  This benefit also applies to anyone who has exhausted all unemployment payments at the state or federal level, including the PEUC program.
  • Pandemic Emergency Unemployment Compensation (PEUC) – The PEUC program provides up to 13 weeks of unemployment benefits to individuals who exhausted regular benefits under state or federal law, or have no rights to regular unemployment benefits under state or federal law.  The first week a claimant can be compensated on this benefit is the week beginning March 29, 2020 and the last payable week is the week ending December 26, 2020.
  • Paycheck Protection Program (PPP) – The PPC provides loans to employers with fewer than 500 employees to keep their associates on the payroll.  The Small Business Administration (SBA) will forgive these loans if all associates are kept on the payroll for eight weeks and if the loan is used for payroll, rent, mortgage interest, or utilities.  Associates that take advantage of the PPP and who are recalled to work (or are being paid full-time pay and benefits) are not eligible for unemployment benefits. If associates have a current claim for benefits, they should update their claim appropriately to reflect the day they were no longer eligible for unemployment benefits.  For more information on the PPP, please review the following website: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program-ppp.
  • Important – None of the benefits described above, or unemployment benefits, are available to employees who quit their job, refuse to return to work, or refuse to receive full-time pay.  Any attempts to collect payments after quitting a job could be viewed as fraudulent and will be investigated by IWD. The CARES Act calls for serious consequences for fraudulent cases including fines, confinement, and an inability to receive future unemployment benefits until all fraudulent claims and fines have been repaid to the state agency.

The IWD has updated their FAQs for employers and their associates at their website:  https://www.iowaworkforcedevelopment.gov. The IWD will also be conduct webinars for employers and their associates in the upcoming week, which will include information on new CARES Act program benefits.  Information on the webinar’s dates and times can be found on the IWD’s main unemployment website.

Our office will monitor COVID-19 updates closely and will send out additional announcements as we become aware of any updates. You can also review these updates on our website at https://thomas-and-company.com/covid-19/ too.

Please reach out to your representative with any questions.

Mike Parker
In COVID-19

Iowa Workforce Development & Updates to Leave Policy for Employees Impacted by COVID-19

In light of the CARES Act, the Iowa Workforce Development (IWD) implemented updates to its leave policy for filing unemployment insurance benefits. Effective immediately, employees who are or will be laid off, or are unable to work for reasons related to COVID-19, will no longer be required to use all paid leave prior to being eligible for benefits. This change is not retroactive and claims will not be backdated prior to the week of March 29, 2020 for any new or existing claims.

The state’s policy typically required claimants to use all available paid leave prior to filing for benefits and was necessary to help sustain the Iowa Unemployment Trust Fund, which is funded entirely by employers doing business in Iowa and is the source of all benefit payments to claimants.  The CARES Act provided a significant source of additional funding for claimants and this policy change reflects the evolving situation of the COVID-19 pandemic. The CARES Act benefit programs will expand the group of individuals eligible for benefits to include the self-employed, independent contractors, nonprofit employees, gig economy workers, as well as workers who have exhausted their benefits. The IWD will continue to share more information as it is received from the Department of Labor and will post updates on their website  at https://www.IowaWorkforceDevelopment.gov.

Our office will monitor COVID-19 updates closely and will send out additional announcements as we become aware of any these updates. You can also review these updates on our website at https://thomas-and-company.com/covid-19/ too.

Please reach out to your representative with any questions.