BCBSRI has compiled a list of state and federal programs to help you navigate the challenges brought on by this pandemic. We’ve updated these resources to reflect programs and policies in the American Rescue Plan, President Biden’s $1.9 trillion stimulus plan signed into law on March 11, 2021. This Act provides significant funds and state flexibility, so please check these resources regularly for updates and new programs:
Reopening Rhode Island
Restaurants, retail stores, and other organizations can find useful guidelines and resources about reopening.
- Visit Reopening Rhode Island.
UPDATED: Paycheck Protection Program
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on payroll. The American Rescue Plan adds another $7 billion into the funding pool for the Paycheck Protection Program and broadens eligibility to include additional nonprofits such as 501(c)(3) labor and community organizations and shuttered venues. It allows entities to make another draw on the program.
Earlier this year, the Paycheck Protection Program was revised to make the applications easier, to cover more expenses, and to extend the coverage period to March 31, 2021.
- Employers that did not previously qualify for loan forgiveness have a second chance to apply given the new retroactive changes.
- Employers that could have qualified for more funds can also apply for the extra funds. The new retroactive changes cover more expenses, including software and worker protective equipment and allow entities that returned PPP funds to also reapply. Entities that received Economic Injury Disaster Loans (EIDL) advances can apply for a PPP loan.
- Employers that used or will use all their eligible funds may be eligible for a Special PPP Second Draw. Eligible entities include nonprofits, self-employed individuals, and sole proprietors. They may not have more than 300 employees, and they must have had at least a 25% reduction in gross receipts in a quarter in 2020 compared to 2019 (or to another benchmark if not in operation then). Entities typically can receive up to 2.5 times their average monthly payroll costs, but those in the accommodation and food services industries can receive 3.5 times average payroll. However, the maximum payment amount for either category of recipient is $2 million.
- PPP loans are forgivable if the entity spends at least 60% of the funds on payroll.
Tax Treatment of PPP loan forgiveness and expenses paid with PPP funds and similar programs
Retroactive to the start of the CARES Act, for PPP and other specified loan and grant programs, including Economic Injury Disaster Loans (EIDL), the amount of any forgiven loan or grant will not be considered gross income. Expenses paid with a forgiven loan will remain deductible business expenses.
NEW: Restaurant Revitalization Fund
The American Rescue Plan created this dedicated fund to aid restaurants, which is administered by the Small Business Association. The grants are intended to make up for losses suffered during the pandemic, based on the difference between revenue in 2019 and 2020. A portion of the funding is set aside for smaller restaurants, and initial applications will prioritize entities owned and operated by women, veterans, or socially and economically disadvantaged individuals. Restaurants are broadly defined to include many types of food service entities. The grants may be used for a wide variety of expenses, including payroll, mortgage, rent, utilities, supplies, food and beverage expenses, paid sick leave, and operational expenses.
NEW: State Small Business Credit Initiative
The State Small Business Credit Initiative is an existing low-interest loan program and is enhanced with additional funding under the American Rescue Plan. A portion of the new funding is set aside for businesses with fewer than 10 employees and also for businesses owned and controlled by socially and economically disadvantaged individuals. Ask your bank/lender for more information.
Express Bridge Loans
UPDATED: Emergency Economic Injury Disaster Loan
The American Rescue Plan adds another $15 billion into the funding pool for Emergency Economic Injury Disaster Loans and prioritizes small businesses (ten or fewer employees) and sole proprietors. These loans cover emergency periods through December 31, 2021 and provide up to $2 million at 3.75%. A business can use these loan proceeds for working capital and operating expenses, such as healthcare benefits, rent, utilities, and fixed debt payments. The forgivable advance “grant” portion is no longer available unless Congress provides new funds. A limitation that restricted eligible entities to those in the agricultural industry was lifted on June 15, 2020.
The Consolidated Appropriations Act 2021 allocated money for the expansion of the 7(a) Loan program, microloans, and for low-interest refinancing of the 504 Express Loan Program and 7(a) loans. Loans are also available for live entertainment venues.
- Find guidance for businesses and employers at the Small Business Administration.
Small Business Administration (SBA) debt relief
The SBA will pay for six months of principal, interest, and fees associated with a range of loans but NOT for the Paycheck Protection Program or Emergency Economy Injury Disaster Loans.
- Find out more on the SBA website.
These small business loans range from $5,000 to $15,000, for small businesses open at least a year and with good credit. These loans are fast-tracked with money available in two weeks. Businesses not meeting the criteria may be eligible for other loan programs.
- For more information, contact the Community Investment Corporation.
Microenterprise (MicroE) Stabilization Grant Program
This program provides grants of up to $5,000 to businesses with five or fewer employees, in targeted communities.
- Learn more at Commerce RI.
LISC Small Business Relief Grants
This program awards grants to the most challenged businesses, especially those in underserved communities.
- Learn more about LISC Small Business Relief Grants.
Short-time compensation and WorkShare
The Consolidated Appropriations Act 2021 extends funding for “short-time compensation” programs, where employers reduce employee hours instead of laying off workers, and the employees with reduced hours receive a prorated unemployment benefit. This provision would pay 100% of the costs they incur in providing this.
The Rhode Island WorkShare program allows employers to retain skilled workers by reducing the hours of a group of employees. Employees whose hours and wages are reduced would be eligible to receive a portion of their regular unemployment insurance benefits to compensate for the lost wages.
- Learn more about Workshare.
UPDATED: Federal tax assistance
Under the CARES Act and the Consolidated Appropriations Act 2021, numerous taxes are delayed, tax credits are advanced, and write-offs are expedited. The IRS is issuing guidance frequently; find the latest information. Separate from the American Rescue Plan, the IRS recently announced a delay in the tax filing date until May 17, 2021. Federal tax benefits include:
Employee Retention Tax Credit (ERTC) – The American Rescue Plan extends the ERTC through Dec. 31, 2021 (it had been until July 1) and expands eligibility to include newly formed businesses. The ERTC initially provided a refundable tax credit of 50% of an employee’s compensation up to $10,000 per employee per year. The credit was increased to 70% of qualified wages of up to $10,000 per employee per quarter under the Consolidated Appropriations Act 2021. Eligibility standards were also lessened under the Act: year-over-year gross receipts need only decline 20%, new employers may be eligible, and group health plan expenses can be considered. Another significant change allows entities to be eligible for both this and the Payroll Protection Program (PPP) program; firms can take the credit for any payroll expenses not covered by the PPP.
Deferred payroll tax – For employers that deferred Social Security withholdings September 1, 2020 through December 31, 2020, per the President’s executive memorandum, the withholding of those deferrals previously due by April 30, 2021, is now extended to December 31, 2021. Penalties and interest on deferred unpaid tax liability will not begin to accrue until January 1, 2022.
Modifications for net operating losses, alternative minimum tax credit, business interest, and property improvement expenses – These changes allow companies to utilize losses and amend prior year returns to provide cash flow and liquidity during the COVID-19 emergency.
Advance refunding of credits – Allows employers to receive an advance tax credit from Treasury instead of having to be reimbursed.
UPDATED: Employer paid sick leave
The American Rescue Plan extends the 100% tax credits for paid sick and family leave related to COVID-19 through September 30, 2021. However, the mandate to provide the leave is not extended for periods past December 31, 2020.
- Learn more at the U.S. Department of Labor.
Payroll tax credits
Employers subject to the public health emergency leave and emergency paid sick leave requirements are eligible to receive a refundable credit against the payroll Medicare tax for sick and family leave.
UPDATED: Unemployment insurance
For details and updates on any of these programs, please visit the Rhode Island Department of Labor and Training.
Expansion of Eligibility
Individuals not traditionally eligible for unemployment benefits—self-employed, independent contractors, those with limited work history, and others—who are unable to work as a direct result of the COVID-19 public health emergency are eligible for pandemic unemployment assistance.
Extension in Compensation
Under the American Rescue Plan, the benefit periods are extended an additional 29 weeks, for a total eligibility period of 79 weeks, through September 4, 2021 (if the applicant does not exhaust their 79 weeks before that date).
Unemployment insurance is available without the traditional seven-day waiting period.
Support for Furloughed/Reduced Time
Unemployment insurance may partially replace wages lost due to a reduction in work hours.
Increase in Benefits
The American Rescue Plan continues the Federal Pandemic Unemployment Compensation (FPUC) supplement at $300 per week until September 4, 2021.
NEW: Federal income tax on unemployment
Under the American Rescue Plan, federal income tax on unemployment benefits is waived for the first $10,200 of unemployment benefits received in 2020.
Rhode Island Temporary Disability Insurance (TDI) & Temporary Caregiver Insurance (TCI)
For COVID-19 related claims, Department of Labor and Training will waive the seven-day minimum amount of time that claimants must be out of work to qualify for TDI/TCI benefits. For individuals under quarantine, Department of Labor and Training will waive the required medical certification, and instead will allow them to temporarily qualify via self-attestation that they were under quarantine due to COVID-19.
Disability Insurance (TDI) provides benefit payments to insured Rhode Island workers for unemployment caused by a temporary disability or injury, including quarantine.
Caregiver Insurance (TCI) provides eligible claimants up to 4 weeks of caregiver benefits to care for a seriously ill child, spouse, domestic partner, parent, parent-in-law, or grandparent.
Distribution from retirement accounts
An individual can take a distribution of up to $100,000 from a retirement account without the 10% early withdrawal penalty. Any income tax liability can be paid over three years, or the person can recontribute funds back to the retirement account. Must be a COVID-19-related distribution, meaning the person: (1) is diagnosed with COVID-19; (2) has a spouse or dependent diagnosed with COVID-19; or (3) experiences adverse financial consequences as a result of being quarantined, furloughed, laid off, having work hours reduced, being unable to work due to lack of child care due to COVID-19, closing or reducing hours of a business owned or operated by the individual due to COVID-19, or other factors as determined by the Treasury Secretary.
UPDATED: Direct payments
Under the American Rescue Plan, individuals making under $75,000 and married couples making under $150,000 will receive $1,400 per person plus $1,400 per dependent. The payments phase out for individuals who earn over $80,000 and couples filing jointly who make over $200,000.
Due to differences in eligibility rules, recipients may not include everyone who had received funds under the earlier Consolidated Appropriations Act 2021. That program provided a one-time $600 payment to individuals and families. Parents received a $600 payment for every child under 18 years of age. The payments began to phase out for individuals who earn up to $75,000 and couples filing jointly who make up to $150,000.
Flexible spending accounts (FSA)
All unused funds remaining in a health and/or daycare FSA ending in 2020 may be carried over to the plan ending in 2021, and similarly all unused funds remaining in a plan ending in 2021 may be carried over to the plan ending in 2022.
Outside of Rhode Island
In addition to the programs identified above, the following resources are available.
Resources for Massachusetts Employers and Residents
These resources provide an overview of certain state and federal assistance programs, available as of March 24, 2021, and is not intended as legal or tax advice. Please consult your tax, accounting, or legal advisor for more information.