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COVID-19 Update for June 12: Here’s What Massachusetts Businesses Need to Know

As the news surrounding the global COVID-19 pandemic continues to evolve, our team at blumshapiro is staying focused on answering the local business community’s most pressing questions. As of Friday, June 12, 2020, here are the latest updates leaders in Massachusetts’s business community need to know.   

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Insights  <  COVID-19 Update for June 12: Here’s What Massachusetts Businesses Need to Know

As the news surrounding the global COVID-19 pandemic continues to evolve, our team at blumshapiro is staying focused on answering the local business community’s most pressing questions. As of Friday, June 12, 2020, here are the latest updates leaders in Massachusetts’s business community need to know.   

The Latest News

Phase 2 begins in Massachusetts

Phase 2 of reopening began across the state on Monday, with a second round (or stage) of businesses allowed to reopen later in this phase.  Included in Phase 2 is retail, restaurants (outdoor dining only), day camps and childcare facilities, preventative healthcare visits, organized sports, lodging, and other businesses.

National News

Updates on Paycheck Protection Program

The Paycheck Protection Program Flexibility Act was signed into law last Friday, making loans more accessible under the PPP by making its terms more flexible, including allowing a longer time period to use the funds (from 8 weeks to 24 weeks), adjusting the payroll/expense ratio to 60/40 (from 75/25), and deferring payroll tax if the loan is forgiven.  As a result, using the loan to pay employees’ bonuses has become much less important.  The PPP was also being credited with the lower unemployment numbers for May.  And two bank advocacy groups are calling on Congress to automatically turn any PPP loan for less than $150,000 into a grant.  (For previously mentioned PPP resources, please visit the Available Resources for Massachusetts Businesses section, listed later in this update.)

Main Street Lending Program Expanded

Earlier this week, the Federal Reserve announced new changes to the Main Street Lending Program to better help smaller businesses.  Changes include lower loan limits (minimum $250,000, down from $500,000), maximum loan increases, and lengthened loan terms.

U.S. officially in recession

According to the National Bureau of Economic Research, the U.S. economy hit a peak in February and has since taken a downturn, officially marking the beginning of a recession – the first since 2007-2009.

Jobs report lessens urgency for Republicans to pass new stimulus bill

The lower unemployment figures that came out last week are giving some Republicans pause on when or whether to pass any further stimulus measures.

Massachusetts News

Unemployment insurance trust fund anticipating big deficits

The state’s unemployment insurance trust fund will be short more than $3 billion by the end of this year, and more than $6 billion by the end of 2021, according to a recent report issued by the Massachusetts Executive Office on Labor and Workforce Development.  To help make up the shortfall, employer contributions are expected to increase.

Bars moved to Phase 4

Unless also offering seated food service, bars have been moved from Phase 3 of the state’s reopening plan to Phase 4.  It was unclear when the change was made.

Governor Baker introduces new COVID-19 Data Collection Bill

On Monday, Governor Baker filed a new data collection bill meant to better track the virus’s impact by requiring more reporting to the state’s Department of Public Health.

How to help the hungry in Massachusetts

An estimated 38% of people in the Commonwealth are experiencing hunger, in part due to factors including school closures and job losses as a result of the pandemic.  The Boston Globe recently put together a list of resources to help those experiencing hunger, or to get help.

Industry News

Dealerships

Demand for new vehicles has risen higher than expected, leading automakers to ramp up production while concerns over safety measures start to mount.

Education

The combination of higher unemployment and the pandemic may lead to much higher enrollments at community colleges across the state and country.

Meanwhile, for younger students, the state has issued guidance for a variety of precautions in the classroom, including smaller classes, masks, six-feet-spaced desks, and frequent hand washing.  Full draft guidance from the Elementary and Secondary Education Commissioner is expected sometime later this month.

Health Care

Beth Israel Deaconess Medical Center and Johnson & Johnson announced they will start testing a potential vaccine for the coronavirus in humans in July, two months earlier than expected.

Also, a preliminary survey by the Massachusetts Chapter of the American College of Physicians reported that a fifth of physician practices said they were considering consolidating, selling, or closing.

Restaurants and Hospitality

Restaurants (outdoor dining only) and lodging were given green lights to reopen as of Monday.  The Boston Globe has compiled a running list of restaurants reopening.  (Indoor dining is expected to be allowed later in Phase 2.)

Available Resources for Massachusetts Businesses 

Previously mentioned PPP resources:

Additional and previously mentioned resources:

How You Can Help

The community-minded response of Massachusetts’ business community has been nothing short of extraordinary.  There are plenty of ways to contribute to the statewide effort to navigate this crisis.  Here are few:

Future Updates and Additional Resources

We will be providing regular updates over the next several weeks as new developments are made available.  If you have any questions whatsoever, please do not hesitate to reach out.  We are here to help you with your tax and business advisory needs.

In the meantime, you can refer to the following state agencies and associations for the latest information:

And a Last Good Word…

We all need some good news right now – here’s some from this week:

In response to the COVID-19 pandemic, College Hype Screen Printing and Embroidery created a Resilience 2020 line of clothing, with proceeds directed toward the purchase of PPE for both Boston Medical Center and South Shore Health System.  Just this week, founder Jack Doherty announced that the company has raised $40,000 toward this initiative, and continues to raise even more, while honoring frontline heroes and sending special shout-outs to company supporters.  To check out the Resilience line or learn more, be sure to visit resilience2020.us.  Thank you, College Hype!

 

COVID-19 Business Resources

 

Disclaimer:  The contents of this resource are for general informational purposes only. While every effort has been made to ensure its accuracy, the information is provided “as is” and no representations are made that the content is error-free. We have no obligation to update any content, comments or other information for retroactive or prospective interpretations or guidance provided by regulators, financial institutions or others. The information is not intended to constitute legal advice or replace the advice of a qualified professional. There are areas of the CARES Act where additional clarification from the Treasury Department and the SBA is needed. Your judgment and interpretation of the act may be needed. Users should consult with their legal counsel and representatives of the lending institution regarding the proper completion of their application and supporting documentation.

Any written tax content, comments, or advice contained in this article is limited to the matters specifically set forth herein. Such content, comments, or advice may be based on tax statutes, regulations, and administrative and judicial interpretations thereof and we have no obligation to update any content, comments or advice for retroactive or prospective changes to such authorities. This communication is not intended to address the potential application of penalties and interest, for which the taxpayer is responsible, that may be imposed for non-compliance with tax law. 

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