These best practices/interpretive guidelines produced by the Maryland Horse Council (MHC) are based on Executive Orders and various Department Guidelines as of 4/13/20; MHC will make every effort to review and revise in a timely fashion when Executive Orders or Department Guidelines are updated. These are Interpretive guidelines and are not binding. Barn owners or operators of equestrian facilities are urged to consult with
their own legal counsel, accountants and insurance providers for advice about the Governor's Orders and the
corresponding Office of Legal Counsel Interpretive Guidances, and their applications to their own unique business circumstances.
The Maryland Horse Council is not a regulatory body; it is an umbrella association for all horse organizations, horse farms, equine-related businesses, non-profits, charities and horse owners. MHC advocates for the equestrian community at the state level on matters of legislative and regulatory affairs. The MHC Executive Committee is in regular communication with the various agencies and departments which regulate activities and businesses related to horses, including but not limited to the Maryland Department of Agriculture, the Maryland Horse Industry Board (housed at the Department of Agriculture), the Department of Natural Resources, and others.
USDA: Learn about USDA funding for rural communities – click here.
American Horse Council: Here is an analysis by the American Horse Council of how some of the Federal relief programs apply to horse operations. These are federal provisions only. Maryland has its own programs as do some counties within the state.
For example, the Small Business Administration’s Paycheck Protection Program (“PPP”) authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. Loans are facilitated through approved local lenders, including Mid-Atlantic Farm Credit. Check the American Horse Council link above for more info.
The Paycheck Protection Program (PPP) provides forgivable loans to businesses who keep their workers employed, and will be available to sole-proprietors and independent contractors. This program is now accepting applications for small businesses. Sole-proprietors and independent contracts will be able to submit application on April 10, 2020.
Economic Injury Disaster Loans (EIDL) provides working capital loans to businesses who have suffered "substantial economic injury" as a result of COVID-19. The new provisions of the CARE act will streamline the process, and allow the program to serve a broader set of companies. Also, if you have applied for an SBA EIDL loan, you are eligible for a $10k forgivable advance. You can apply for these loans and the $10k advance here.
The federal tax filing deadline has been moved to July 15. More details may be found here.
Maryland Small Business Development Center: https://www.marylandsbdc.org/covid-19-assistance
Maryland Small Business COVID-19 Emergency Relief Loan Fund: This is a $75 million loan fund for for-profit businesses only that offers no interest or principal payments due for the first 12 months. After the first 12 months, the loan converts to a 36-month term loan of principal and interest payments, with an interest rate at 2% per annum. Click here for more information: https://commerce.maryland.gov/fund/maryland-small-business-covid-19-emergency-relief-loan-fund
Maryland Small Business COVID-19 Emergency Relief Grant Fund: This is a $50 million grant fund that offers working capital to assist Maryland small businesses and non-profits with disrupted operations due to COVID-19. The grant is intended to provide interim relief complementing actions with its bank, business interruption insurance and financial partners. For more information, click here: https://commerce.maryland.gov/fund/maryland-small-business-covid-19-emergency-relief-grant-fund
Maryland COVID-19 Emergency Relief Manufacturing Fund: – This is a $5 million incentive program helping Maryland manufacturers to produce personal protective equipment (PPE) needed for hospitals and health-care workers across the country. Details can be found here: https://commerce.maryland.gov/fund/maryland-covid-19-emergency-relief-manufacturing-fund
NO LONGER ACCEPTING APPLICATION: COVID-19 Layoff Aversion Fund– This program is designed to support businesses undergoing economic stresses due to COVID-19 by preventing or minimizing the duration of unemployment resulting from layoffs. Up to $50,000 per applicant can be used in a customizable way for the specific needs of each business to minimize layoffs. Grant applications will be awarded from March 23 through 30-days after the State of Emergency ends (subject to funding availability). For more information, click here: http://www.labor.maryland.gov/employment/covidlafund.shtml
Unemployment Insurance Work Sharing Program– Work Sharing is a voluntary program that provides an alternative to layoffs for employers faced with a temporary, non-cyclical decline in business due to lower economic activity. The program is designed to avoid layoffs by preserving jobs for trained workers. Click here for more information: http://www.labor.maryland.gov/employment/worksharing/
Maryland Department of Commerce: The Department has a number of existing financing programs, like Advantage Maryland, which provides conditional loans for new businesses or business expansions; the Maryland Industrial Development Financing Authority and Fund (MIDFA), which provides loan guarantees; the Maryland Small Business Development Financing Authority (MSBDFA), which provides financial assistance to economically disadvantaged businesses; and the Non-Profit Interest-Free Micro-Bridge Loan Program, which provides loans to nonprofits to support ongoing operating costs while waiting on a future government grant or contract. A total of about $40 million is available through these existing programs.
Governor Hogan’s 3/30 Press Conference & New Funding Announcements: Governor Hogan announced the expansion of a $175 million economic relief package created last week.
Since last week, the state has received more than 1,500 applications to a $7 million COVID-19 Layoff Aversion fund. Hogan added $2 million to the fund on Monday.
So far, the state has paid $8.8 million to more than 400 small businesses to avert 8,000 layoffs, Hogan said.
The state has also received more than 5,300 applications for a $50 million business relief fund, and more than 11,000 applications for new grant funding.
Businesses seeking assistance can learn about the programs at businessexpress.maryland.gov.
Maryland Credit Unions: MD credit unions are offering some flexibility to their members.
A recent membership survey conducted by the MD|DC Credit Union Association shows credit unions are offering immediate relief to consumers struggling to pay bills through loan modifications, fee waivers and other assistance programs
• 95% are offering loan modifications such as skip-a-payment, low or no-interest loans, or increased line of credit.
• 53% are offering new emergency loan products with deferred payments and/or reduced or no interest.
• 60% are waiving fees or penalties for overdraft, loan applications, ATM, or early withdrawal from CDs.
The Maryland Horse Council has pulled together new and additional resources for our state equine community, business, and particularly our non-profits.
We have provided several business-related resources during the last week. While this article addresses those resources, we have added some non-profit specific information relative to the relief programs. We have so many 501c3 organizations in Maryland helping horses that we wanted you to learn about these resources as they apply to your organization and tax structure.
See below for a breakdown of these programs. Each is bolded to highlight to relief programs available to you.
1.SBA- Paycheck Protection Program (“PPP”)
501c3 organizations are eligible for the Paycheck Protection Program. www.sba.gov/funding-prorgrams/loans/paycheck-protection-program. You must reach out to your bank to start the process. The program extends until June 30th, but you should start this as soon as possible with your bank. It is a first come first serve process. It is not need based and will be funded on an as requested basis. The loan amount cannot exceed $10 million, and it is generally 2.5 times your payroll costs. Eligible salaries will be capped at $100,000 (as paid from February 15th to June 30, 2020). You should include higher salaries, but you will not receive more than $100,000 for each of those salaries.
The PPP is not accepting applications from sole proprietors or independent contractors until April 10th.
The interest rate is currently 1% and will not exceed 4%. It is now a two-year term. There is no prepayment penalty and a there is a six-month deferral before the start of payments. There are no collateral or personal guarantees. The loan may be used for rent, utility, and other mortgage and debt obligations.
There is potential loan forgiveness. Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. You apply for 2.5 times payroll costs and what is forgiven ultimately is payroll costs, interest and utilities for eight weeks. You are subject to a possible reduction if you don’t retain the same number of employees as you had prior to the program. Other factors would be reduced pay by more than 25%. If you rehire or increase pay before June 30th, you may be able to avoid this reduction in the amount of forgiveness. SBA provided additional guidance that not more than 25% of the forgiveness can be related to non-payroll costs. 75% must go to payroll.
There is a new PPP form as of April 2nd where you can select that you are a non-profit. You can use your board president or signatories to sign the new form.
TIP: Check with your banker for their recommendation.
2.Economic Injury Disaster Loan Program
Qualifications & Loan Details
The SBA is projecting 21 to 31 days to review applications. There are no forgiveness features. It is designed to be a longer-term financing option.
Every applicant can potentially also receive a $10,000 economic injury grant. It is requested during the EIDL loan application process. It may be used for payroll, supply chain disruptions, business obligations, rents, and mortgage purposes. This is a grant and will not need to be repaid.
Thus far we have heard that if you are using the loan and grant money for different purposes you can apply for both. However, if you receive an EIDL grant you most reduce your PPP forgiveness amount, if you have also applied for the PPP.
If you want a grant only, you have to start the loan application process but you don’t necessarily have to accept the loan funds
3.FFCRA – Family First Coronavirus Response Fund
Provides paid leave for employees quarantined, experiencing symptoms and seeking a medical diagnosis. Employees can receive up to 80 hours at a regular rate. If they are caring for an individual quarantined or for a person under the age of 18 whose school or child care provider is closed, they may receive up to 80%.
Employees may receive up to an additional 10 weeks at 2/3 the regular rate if they are unable to work due to the need for leave to care for a child whose school or child care provider is closed. There is an employee longevity requirement here. The employee must have been employed for at least 30 days prior to March 1st. If the employee had been terminated and rehired there are additional provisions.
Part-time employees are entitled to paid leave under this program at their average number of work hours in a two-week period. Paid leave does not have to be taken consecutively. For example: Tuesday and Thursday, etc.; it does not have to sequential.
This program is available for organizations with fewer than 500 employees and does includes non-profits. Organizations with fewer than 50 employees may qualify for exemption from the requirement to provide paid leave due to school closing or child care unavailability if leave request would jeopardize the viability of the organization as an ongoing concern. [Is this accurate? I pasted it in from a prior version of the document, now that I think I understand better what you were getting at.]
Employers receive 100% Reimbursement for required paid leave. Payments are not subject to Employer Social Security tax and employers can claim credit for Medicare tax. Prorated health insurance costs are also eligible for that credit. Reimbursements to employers are made in the form of dollar-for-dollar offset against Form 941 deposits by submitting streamlined advance Form 7200 to the IRA.
There are required posters that must be displayed in your workplace as of April 1st. They must also be made available electronically.
4. Additional CARES Act Programs
Employee Retention Credits (“ERC”)
Refundable payroll tax credits are available for 50% of qualified wages paid by eligible employers to certain employees. If you are receiving PPP funds, you are not eligible for this credit.
ERC provides incentives to keep employees on payroll even if forced to close or suspend business.
Businesses are eligible for ERC if business was carried on in 2020 and if operations were fully or partially suspended as a result of a COVID-19 government order, or the organization remained open but experienced a greater than 50% reduction in quarterly receipts as compared to the same quarter in 2019. Eligibility is determined by the whole organization’s revenues, so it cannot be based solely on specific events or programs.
ERC applies to wages paid after March 12, 2020 and before January 1, 2021. The credit for 50% of qualified wages is claimed against the employer’s 6.2% share of social security payroll taxes for each calendar quarter for which the employer is eligible and qualified wages are paid. If the credit exceeds the organization’s liability, employers can retain federal employment taxes including withheld taxes or request an advance of credit from the IRS.
Qualified Wages: For employers who have an average number of full-time employees in 2019 of 100 or fewer, all employee wages are eligible. Qualified wages include “qualified health plan expenses” to the extent the amounts are excluded from gross income of the employees (so not taxable to employees). Qualified wages are capped at $10,000 for each employee for all quarters. This is a cumulative cap and it is applied at 50%, so a maximum of $5,000 credit per employee. This is not available if you have taken the Work Opportunity Credit with respect to the employee, for wages considered for the employer credit for paid family medical leave (IRC Section 45S), or for wages considered for purposed of the payroll credits for required paid leave under FFCRA.
Delay of Payment of Employer Payroll Taxes
Allows employers to defer paying the employer’s 6.2% share of social security taxes due from date of enactment of the Act through the end of 2020. Any amounts deferred will be payable 50% by December 21, 2021 and 50% by December 31, 2022. This applies to any remaining amounts due after applying the previously discussed credits. Organizations that received a PPP loan with forgiveness are NOT eligible for this deferral.
Expanded benefits related to COVID-19. If your employees were previously exempt from unemployment, they are now eligible. For organizations that had elected the self-insure method, you will be responsible to cover half of those benefits now and the other half will be covered by federal funds. If you paid in as you normally do, you will not have your experience ratings increase during this period of time of high unemployment.
Short-Term Compensation (STC) Program
If you have employees for whom you have reduced their hours or pay, you can apply as an employer for supplementary funds from unemployment to make their pay whole.
Tax Income Provisions
“The legislation includes a permanent change to tax deductions for charitable donations: If you claim the standard deduction (meaning you don’t itemize your taxes), you can now deduct up to $300 for qualifying charitable donations “above the line,” which means they lower your total taxable income by the amount you’re deducting.
If you do itemize your taxes, the usual limit on deducting charitable cash donations is 60% of your adjusted gross income. This legislation waives that limit for 2020 (although limits on donations of non-cash assets, like stock, still apply). And the limit for corporations is being increased from 10% to 25%.”
Required minimum distributions have been suspended this year. Contributions to Donor Advised Funds are not eligible for the $300 deduction. Also, donations in excess of 60% of adjusted gross income cannot be to Donor Advised Funds. Donations to SPELL OUT QCDs are still available though. A QCDs is a charitable qualified distribution that allows you to “rollover” up to $100,000 of you required minimum distribution after age 70.5 without incurring ordinary income taxes it must be made directly to the charity from the financial institution.
Tax Deadline for Non-Profits
990 filing still due May 15th
The Maryland Department of Labor has some details for businesses to avoid layoffs or implement work sharing options. To see details visit this website.
The Centers for Disease Control has issued guidance for businesses and employees.
The U.S. Department of Labor has developed some guidelines for how companies can prepare their workplace for COVID-19. In addition, the Occupational Safety and Health Administration (OSHA) has launched a COVID-19 website for information specifically for workers and employers. There is also information on issues relating to wages and hours worked under the Fair Labor Standards Act.
The Maryland Department of Labor’s Division of Labor and Industry enforces the Maryland Health Working Families Act, also known as Safe and Sick Leave, which may be useful for employees who need to take off from work due to COVID-19. Learn more here.
If a business experiences a temporary or permanent layoff, Labor’s
Division of Unemployment Insurance’s Bulk Claim Services can open unemployment insurance claims for all affected employees. More details on unemployment insurance is available here. To determine if a business is eligible, please visit the Bulk Claims Services Frequently Asked Questions (FAQs).
Licensing & Permitting