The federal government is responding to the COVID-19 pandemic with a number of efforts that have an impact on employees and their employers. We are providing summaries and links to further information here. Currently, this page covers:
- Executive Order on deferral of payroll taxes (added August 30)
- Families First
- CARES Act
Be sure to see our general Congregations as Employers During the COVID-19 Pandemic page, with information about paying staff, benefits, working from home, supervision, and more.
General Information about Federal Programs
- August 8 Executive Order Deferring Employee Social Security Tax Obligations:On August 8, the President issued a memorandum that defers the withholding, deposit, and payment of the 6.2% Social Security tax on most wages paid between September 1 and December 31, 2020. See Executive Order on Deferring Payroll Taxes below.
- Paycheck Protection Program resourcesare below,under the CARES Act.
- Webinar slides (last updated April 9):COVID-19 Federal Programs, Staffing, and Finances Webinar Slides (PDF)
Executive Order Deferring Payroll Taxes
On August 8, an Executive Order was issued that deferred the withholding and payment of the employee portion of Social Security taxes (6.2% of pay) for those earning less than $4,000 per biweekly pay period. The IRS released guidance on August 27. In summary:
- It's optional. From September through December, employers are allowed to postpone the withholding and payment if the employees' portion of the Social Security tax but are not required to. Clarify with your bookkeeping or payroll service whether or not you plan to defer. Make sure you thoroughly understand the implications and obligations associated with the deferral option.
- The payback period is January through April, 2021. Thus, for employees with consistent pay from September through April, they would have NO Social Security withholding from September to December and then DOUBLE withholding from January through April.
- Responsibility for paying back the deferred taxes appears to rest with the employer. If an employee leaves the workforce prior to April 30, or has fewer hours/lower pay from January to April than they did from September through December, the employer would need to make up the difference.
Unanswered questions remain. The administrative mechanics have yet to be clarified. As an employer, your congregation can choose whether or not to implement the deferral. Given the fast payback period and the employer's ultimate responsibility, we expect many to conclude that it is not worth the extra administration. While the President says he plans to forgive the deferred taxes if re-elected, this would require congressional approval, which is considered unlikely.
Resources on Executive Order
IRS issues guidance implementing Trump's payroll tax deferral order (The Hill, August 28)
IRS guidelines put employers on the hook for Trump’s payroll tax break (CNBC, August 29)
IRS And Treasury Issue Guidance On Trump’s Payroll Tax Deferral (Forbes, August 28)
IRS Notice 2020-65 (IRS, August 27)
Families First Coronavirus Response Act (Public Law 116-127)
The Families First Act was signed into law on March 18, 2020. This new law requires employers to provide:
- 80 additional hours of paid sick leave to full-time employees (pro-rate for part-time) to employees affected by COVID-19 including those caring for a child whose school or childcare program has closed due to the pandemic;
- Up to 12 weeks of paid Family and Medical Leave to employees who are unable to work due to school or childcare program closures.
- Families First provides employers with a 100% refundable payroll tax credit to the wages paid for either paid sick leave or paid family and medical leave under this law.
Further Information on Families First
- Families First Fact Sheet (PDF) (UUA Office of Church Staff Finances)
- Guidance on Paid Sick Leave and Expanded Family/Medical Leave (U.S. Department of Labor)
- Families First Q&A (U.S. Department of Labor)
- FAQ on COVID-19-Related Tax Credits through Families First (IRS)
- Families First Employee Rights poster (PDF) (U.S. Department of Labor): Email to staff while your buildings are closed.
Coronavirus Aid, Response, and Economic Security Act (CARES)
Congregations can apply for Paycheck Protection Program loans and Economic Injury Loan and Grant Programs regardless of whether they have their own 501(c)(3) determination letter. See the Guide for Small Businesses and the SBA Faith-based FAQ below, as well as these slides from webinars presented by Rev. Richard Nugent (PDF).
The Cares Actwas signed into law on March 27, 2020. This Act is a comprehensive economic stimulus package which numerous subsections. The OCSF/UUA CARES Fact Sheet (PDF) addresses:
- The expansion of Unemployment Insurance to individuals traditionally not eligible for unemployment assistance, including congregational staff;
- Refundable payroll tax credits for retaining employees;
- Loans to employers to support retaining staff and other expenses during this pandemic; and
- Retirement plan changes including waiving of the 10% tax penalty for early distributions, expanded loan benefits, waiver of Required Minimum Distributions during 2020. (The UUA Retirement Committee has opted to authorize participants to take advantage of these provisions. See TIAA and CARES Act (PDF).)
Further Information on CARES
General CARES Resources
- CARES Fact Sheet (PDF) (UUA Office of Church Staff Finances)
- Summary of CARES Act (PDF) (Church Alliance)
UU Retirement Plan Provisions Related to the CARES Act: Learn about new options regarding distributions and loans, and read a message to Plan participants.
Paycheck Protection Program (PPP) Resources
Did your congregation apply for a Paycheck Protection Program loan? Or choose not to?We are interested in learning about congregations' experiences. Please complete our survey.
Memo on PPP Loan Forgiveness (PDF) (UUA Office of Church Staff Finances).
PPP Flexibility Act Announcement and Information (U.S. Small Business Administration, revised June 12).
PPP Loan Forgiveness Application
PPP Loan Forgiveness Application (PDF) (U.S. Small Business Administration, updated June 16)
SBA Paycheck Protection Program FAQ (PDF) (U.S. Small Business Administration)
Updated PPP FAQ on Loan Forgiveness (PDF) (Updated October 13, SBA/Treasury Dept.)
SBA Faith-Based Organizations FAQ (PDF) (U.S. Small Business Administration)
Nonprofit Special Alert on Paycheck Protection Program Loans (PDF), including process for calculating allowable loan amount (April 3, Batts Morrision Wales and Lee CPAs)
Need a report of contributions remitted for your employees in the UU Retirement Plan? Have your authorized Remitting Admin contact our Plan's TIAA Client Services Manager, Kelli Jackson, UUA@tiaa.org. Please include:
- Name of congregation
- UUA Member Congregation ID (4 digits) (Need your ID? Find a Congregation.)
- Remitting Admin's name, role/title, and best contact information (phone/email)
- If you aren't sure of your Remitting Admin for the UU Retirement Plan, contact Charissa Benak: email@example.com, UUA Retirement Plan Specialist.