Business Update – June 2 2021
How will the COVID-19 pandemic end? Scientists who study global pandemics of the past observe that previous pandemics have subsided over time, generally in 18 months or so. The virus itself seems to become less deadly, and becomes more of an endemic seasonal illness. At the same time, our immune systems become better able to fight them off. At least that has been the pattern in the past. It is not clear if that will also happen with this virus, or how long it may take. Researchers theorize that in countries with high vaccination rates, resurgence of the virus may not be as severe. However, unlike past pandemics, which suddenly seemed to wane on their own, reducing transmission of COVID-19 has required human interventions in the form of shutdowns and restrictions. However, the virus mutations causing huge surges in India and Brazil may be signs that this virus may be with us much longer. In the meantime, researchers urge continued vigilance to limit the spread.
THE AMERICAN RECOVERY PLAN ACT (ARPA)
Economic Impact Payments (aka Stimulus Checks)
The IRS has sent out the bulk of the latest wave of stimulus payments and is now moving into a phase of sending out “plus-up” payments to people who had received a payment, but who are eligible for a larger payment based on 2020 tax return information. While 2020 tax returns were due May 17, filing a return by the extended due date of October 15, 2021 will ensure that you get all the funds you are eligible for. While the IRS normally allows three years to file a tax return and receive a refund, it’s not clear if a request for an additional stimulus payment will be honored after October 15.
Emergency Rental Assistance (ERA) Program
A total of $46.5 billion has been allocated to help households pay rent and utilities due to impacts from COVID-19. This program allows both landlords and tenants to apply for funds to help with current and prior rent and utility expenses. While the IRS is administering the overall program, eligibility and applications are administered at the local level. The IRS has a website with links to all local ERA programs. In general, funds are available to households where one or more persons is unemployed or has other financial hardship due to the pandemic. The IRS has also created a set of FAQs on this program that detail eligibility and allowed uses for the funds.
IRS AND TAX MATTERS
Wondering why there’s a delay with your tax refund? The IRS posted a set of FAQs on what you can expect from the IRS in the aftermath of COVID-19. As of May 21, 2021, the IRS still had 18.2 million unprocessed tax returns, which includes those with claims for the Recovery Rebate Credit that need review. This backlog also includes some 2019 tax returns. With that massive backlog, it may take more than 21 days for the IRS to issue refunds. Besides personal tax returns, the IRS also has a backlog of 1.9 million payroll tax returns, Form 941, that are being reviewed and processed before releasing the Employee Retention Credit refunds claimed on those returns. If the IRS tool Where’s My Refund shows that your return has been received or is being processed, no action is required. The IRS urges taxpayers to remain patient as they continue to work through the massive backlog of returns and correspondence.
Some people are eager to return to the office, while others never want to work anywhere but home. Allowing employees to determine whether and how often they will work in the office may lead to discrimination in promotions, as those who work in the office are frequently promoted ahead of those who do not. That’s why Nicholas Bloom, a long-time researcher on remote work, recommends limiting the flexibility employees are allowed to exercise in determining their schedules. Choosing work from home days on a team-wide basis will help create a cohesive bond and will help to mitigate preferential treatment for advancement.
When everyone went remote last spring, few companies communicated their intentions regarding remote work in the future, and that has led to misunderstandings all around, as workforce scholars describe in Fast Company. Many employees moved across the country based on promises that they could continue working remotely, only to find those promises were not sincere. Others find that the reasons given for requiring everyone to return to the office are illogical: people were trusted to work from home a year ago, but now are not. While company culture is often the glue that creates company loyalty, building a remote culture is more difficult, and the gestures used by many companies to build that culture may not be what employees care most about.
REOPENING THE OFFICE
Most companies seem to be planning a return to the office sometime in the second half of this year, but the interaction between health privacy and protecting workers makes for a tricky balancing act. Thinking ahead of time about how to talk to employees about workplace safety can help employees retain their health privacy while keeping them safe. Communicating well in advance allows workers time to get their concerns addressed. Developing a hybrid work policy will also help employees feel safer. Most important of all, reminding employees that vaccination is a personal and private decision that should be respected can prevent potentially discriminatory behaviors between co-workers.
The Great 2021 Resignation
Surveys indicate that anywhere from 26% to 40% of employees may be contemplating changing jobs this year. While it’s too soon to tell from employment data, it’s not too soon for business leaders to start thinking about how to prevent key employees from leaving. A driver behind this possible mass exodus is that many employees don’t want to return full time to the office, and have been rethinking work-life balance. Developing and communicating a remote work or flexible work policy is a good start. Other good options include increasing compensation, offering vacation time, and discussing the future with employees.
- IRS resources for stimulus payments:
- The best source for up-to-date and accurate health information is the Center for Disease Control (CDC)
- The CDC also has recommendations for businesses and employers
- Intuit QuickBooks has a dedicated page to help small businesses
- Entrepreneur put together a listing of free tech resources for remote work
- The Consumer Financial Protection Bureau has warnings about COVID-related scams
- Fast Company has a listing of the best productivity apps for 2020
- The New York Times has an online newsletter on K-12 and higher education
- The Wall Street Journal has a collection of articles on education
- The Atlantic has a state-by-state coronavirus tracker
We sincerely hope that you and your family are well and remain well. If you have any questions or concerns, don’t hesitate to reach out to us. We are all in this together!