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COVID-19 Small Business Tax Changes

COVID-19 Tax Changes

Every business owner know the CARES Act provides financial relief for small business. Less talked about however, are the tax credits available for this upcoming tax season. Check out the nine tax changes below so you can start your record keeping today.

Employee Retention Tax Credit

Businesses are eligible for the Employee Retention Tax Credit if operations were fully or partially suspended due to COVID-19, or if gross receipts declined by more than 50% compared to the same quarter last year.

Eligible business can get a 50% tax credit on wages up to $10,000 per employee for wages paid from March 13, 2020 to December 31, 2020. To claim the credit, employers should report wages and health insurance costs on their quarterly tax returns starting the second quarter of 2020.

For more information, visit here.

Sick and Family Leave

The Families First Coronavirus Response Act (FFCRA) made big changes to the family leave policy for businesses with less than 500 employees. To reimburse employers for expenses incurred while providing paid sick leave, the CARES Act provides a refundable tax credit of up to 100% of the amount paid, paid quarterly.

Check out this article from the Small Business Administration for more information. This article includes information from the Treasury on how they can help with cash flow.

Delayed Payroll Tax Payments

Any business that didn’t participate in the Payment Protection Program can delay payroll tax credits owed for 2020 over the next two years. You must pay half by the end of 2021, and the other half by the end of 2022.

Charitable Gift Deduction Expansion

Before the CARES Act, corporate charitable contributions could not exceed 10%. This has been expanded to 25%. Note the change is not automatic and must be elected.

Net Operating Loss Changes

Any business that had a net operating loss (NOL) for the years 2018-2020 can carry those for up to five years. You can also carry these NOLs for up to 20 years, but they will be subject to the 80% limitation. This is in hopes to improve cash flow and liquidity.

Business Loss Deduction Changes

The CARES Act halted the cap on deductions for business losses on individual returns for the years 2018-2020. Business owners who had losses during 2018 and 2019 can file amended returns to receive refunds.

Corporate AMT Credits

To improve cash flow, businesses supposed to receive an AMT tax credit at the end of 2021 can claim their refund now.

Changes in Interest Deductibles

The CARES Act allows businesses to increase their business interest expense deductions for 2019 and 2020. The increase went from up to 30% to up to 50% of adjustable taxable income.

Facility Improvement Write-Off

Thanks to a provision in the CARES Act, businesses who made improvements to a facility can immediately write off costs associated with improving the interior of a non-resident building. This basically expands the tax deduction for up to 100% of improvement costs, and the deductions can be made immediately.

To read more about this tax change, check out this article.

Information for this post came from the Small Business Administration.

If you’re looking for more information to guide you in owning a retail business, subscribe to American Quilt Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you.

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Small Business Financial Relief

Small Business Relief

If you’re like us, it feels great to be back to work. But even as more money begins flowing in, know financial options are available if your budget still feels tight.

Paycheck Protection Program

The most widely known option available, the Paycheck Protection Program was designed to keep workers on payroll. If employees are kept on payroll for eight weeks, SBA will forgive loans when the money is used for payroll, rent, mortgage interest, or utilities. Consult with your lender if they are participants of this program. Note, the PPP is tax exempt.

For more information, visit here.

EIDL Loan Advance

This loan advance provides up to $10,000 to small businesses in need of temporary relief, and is the newest form of economic relief passed by Congress. Enacted on June 15, note the loan does not have to be repaid. Businesses who have already received money from the PPP are eligible.

For more information, visit here.

SBA Express Bridge Loans

Small businesses are eligible for SBA Express Bridge Loans if they already have a relationship with an SBA Express Lender. This loan is good for up to $25,000 and can be accessed quickly. Use this loan to bridge the gap while waiting for funds from the EIDL loan.

For more information, visit here.

SBA Debt Relief

For businesses who didn’t received funding from the above options, the SBA will automatically provide SBA Debt Relief. This includes six months of paying the principal, interest, and fees for current and new borrowers (through September 27, 2020). For more information, visit here.

Also note, the CARES Act includes funding for the SBA to forgive six months of payments for current and new loans provided through the SBA. For more information, visit here.

Other options

There is a long list of corporations also looking to support small businesses. Start with Forbes for a more organized version, then check out the University of Chicago for a more inclusive list. 

Information for this blog came from the Small Business Administration. Local relief may be available; we suggest beginning your research with a Google search. 

If you’re looking for more information to guide you in owning a retail business, subscribe to American Quilt Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you.

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Virtual Blue Bag Finale

Virtual

This week we’re closing our Virtual Blue Bag series… for the time being. The event will be back in July! For a full list of products, head to our website.

Collections

Videos

Other

  • Perkins Dry Goods Pattern: This pattern is just one of the many offered in the Virtual Blue Bag. Plus, Perkins Dry Goods has 15% off orders; check out their website to cash in on this deal.
  • Q’nique 21 Pro Sewing Machine: Head over to The Grace Company to get an overview of this product (and their sweet sale).
  • Quilter Select Products: Including the popular Select Quilting Rulers designed by Alex Anderson and RNK Distributing, check out their new sizes.

If you’re looking for more information to guide you in owning a retail business, subscribe to American Quilt Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you.

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Virtual Blue Bag Continued!

Virtual Blue Bag

No need to miss Spring Quilt Market when we’ve made Virtual Blue Bags. Check out the continued list of products from last week below, or check out a full list at our website.

In addition to Virtual Blue Bags, we have a special offer for subscriptions going right now. Plus you can receive a free digital copy of the April 2020 issue by using code April2020 at checkout.

Now, check out what’s new this season.

Collections

P&B Textiles has released 13 Collections this Spring. For bright colors and designs, check out Butterfly Dreams by Robin Mead. For the cutest collection—perfect for baby quilts and clothes—(expected to release this Fall) check out Little Creatures by Robin Roderick.

Windham Fabrics has the perfect collection for any spring-themed project you may working on with the Posy line by Annabel Wrigley. Also Spring-related is the Jane Austin at Home line by Riley Blake Designs.

Videos

C&T Publishing has an entire page dedicated to Quilt Market. Check out their Trunk show, Schoolhouse videos, and more content from your favorite authors. JoAnn Hoffman Designs also released a video of their 2020 designs.

Products

Stay tuned—the next Virtual Blue Bag event will be held in July.

If you’re looking for more information to guide you in owning a retail business, subscribe to American Quilt Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you.

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Virtual Blue Bag

Virtual Blue Bag

Have you been following our Virtual Blue Bag posts on social media? We’re all bummed spring Quilt Market was cancelled, but you can still join in on the blue bag-fun by searching the #virtualbluebag hashtag on LinkedIn, Instagram, and Facebook.

What’s inside?

Revealing new fabrics are one of the best parts of Quilt Market. Not only are suppliers revealing new designs, but creators are experimenting with them too!

One Sister Designs used a mix of fabrics and design elements from Plant Kindness and Completely Crazy to create one beautiful finished product.

Natalie Barnes pays tribute to her mother, Norma Rose, in this bright and happy palette by Windham Fabrics. Norma’s favorites—including cabbage roses, seedlings, and hand-written recipe cards—can be found throughout the collection.

If you’re interested in browsing more Spring fabric lines, check out these links below.

And of course, we’ve got the latest products that will make all of your quilting and craft projects so much easier.

Patterns and Products

Inspiration can always be found. Stay tuned for more Virtual blue bag goodies in next week’s blog. You can also find a full list at our website.

If you’re looking for more information to guide you in owning a retail business, subscribe to American Quilt Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you.

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Re-Opening: What have we learned?

Appreciation

To wrap up our re-opening series, we thought we’d conclude with some reflection. And upon reflecting, we kept coming back to one word: appreciation.

The impact of COVID-19 is far from over, and as we re-integrate back into society we will be learning a new normal. We appreciate the lives we had. We appreciate and understand community in a new light. And, we have a new appreciation for our work.

How community has changed

Community has taken on a new meaning. During this time, community means staying away. Community means learning new technology to stay in touch with those you loved.

One thing we’ve noticed through staying in touch digitally are the new routines. At the end of virtual classes or quilt-alongs, do you leave time for sharing? Time for friendly faces to take the screen wearing their familiar smiles? That sort of community seems to make things feel normal again.

A new appreciation for work

All of us have had the confirmation during this pandemic of what we already knew; quilters are essential workers. How many masks have you made? What (or who) are you thinking of while you’re making those masks? How many frontline workers are made safer because of the skills you have and the effort you put in?

As you think about those “when this is all over I’m going to…” ideas, also try to think about what sort of lessons you’re going to take with you. There’s no feeling quite like lending a hand during a time of need.

American Quilt Retailer sees the work that you’ve done and feels the stress of what you’re going through. We will continue to be as much of a resource to you every step of the way.

If you’re looking for more information to guide you in owning a retail business, subscribe to American Quilt Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you.

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Re-Opening: Frequently Asked Questions

COVID

If you still have questions about operating your business during these times, check out these COVID-19 frequently asked questions posted by the CDC.

What should I do if an employee comes to work with COVID-19 symptoms?

COVID-19 symptoms include a fever, cough, and shortness of breath. If an employee starts to present these symptoms during the work day, they should be immediately separated from other employees.

Employees should not be allowed to return to work until they have met the criteria to discontinue home isolation, and have consulted with their healthcare provider. Employees should not be required to be tested or provide a doctor’s note in order to return back to work.

What should I do if an employee suspects or confirms to have COVID-19?

In most cases, you do not need to shut down the facility. However, you should close off any areas used for prolonged periods by the sick person. Wait 24 hours to clean the facility (to decrease the exposure to the persons cleaning the facility) and open as many doors or windows as possible to increase air circulation. Cleaning procedures should follow the guidelines outlined by the CDC.

Employers should inform fellow employees of their possible exposure. The CDC recommends those exposed to take extra precautions.

If an employee has been exposed, but is not showing symptoms, should I allow them to work?

Being exposed is defined by the CDC as coming in close contact (6 feet or less) with an infected person for a prolonged period of time. If the employee has symptoms they should self-isolate. If the employee does not have symptoms, they should self-quarantine for 14 days and practice social distancing. All employees should monitor for symptoms during this time.

Cross training all employees to be able to perform all functions is especially critical in the case your staff is decreased from coronavirus infections.

What should I do if I find out several days later (after an employee worked) they were diagnosed with COVID-19?

If it has been less than 7 days since the sick employee used the facility, clean and disinfect all areas the employee used. If it has been more than 7 days since the sick employee used the facility, additional cleaning is not necessary.

We will continue our Re-Opening series to provide as much information as you need. We want the quilt retail community to feel safe as you re-integrate your businesses to their normal workflow.

If you’re looking for more information to guide you in owning a retail business, subscribe to American Quilt Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you.

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Re-Opening: How to protect your employees

Protecting

Over 30 states have loosened their shelter-in-place policies. If you’re looking to re-open your business (or already have) below is what the CDC recommends to protect your employees.

Establish a COVID-19 Coordinator

The COVID-19 Coordinator should start with examining the company’s sick leave policy. The policy should be flexible and non-punitive and should encourage employees to stay home if they feel sick (or to care for family members who are sick). Review this policy with your employees.

Next the COVID-19 Coordinator should determine shift schedules to enforce social distancing. Work from home should be done whenever possible.

Essential employees and business functions should be determined as well. Business continuity—if there should ever be a disruption in the supply chain—should be evaluated. Explore how you can continue business operations if further disruptions occur.

Lastly, establish an emergency communications plan and clearly communicate all of the above to your employees, along with whatever expectations you may have.

Below are other tips the CDC recommends to protect your employees.

Protecting the health of your employees

  1. Encourage sick employees to stay home. Your sick leave policy should reflect this encouragement as well.
  2. Ask your employees about their concerns. Some employees may have underlying illnesses.
  3. Develop flexible scheduling. This should also include flexible time-off for sick family members in need of care.
  4. Talk to your suppliers about what they are doing to protect their employees.
  5. Plan to minimize face-to-face contact between employees.
  6. Provide supplies for proper hand hygiene. This includes no-touch trash cans, kleenex, soap, water, paper towels, and hand sanitizer.
  7. Keep travel to a minimum.
  8. Routinely clean high-touch areas. This includes phones, counters, keyboards, work stations, and doorknobs.
  9. Provide education, training, and clearly communicate expectations.
  10. If an employee becomes sick, separate them and send them home immediately.

Next week we’ll cover the frequently asked questions small businesses have when operating during the health crisis, including what to do if an employee is exposed and finding out an employee tested positive several days later. Stay safe and keep hanging on AQR community; we are all in this together.

If you’re looking for more information to guide you in owning a retail business, subscribe to American Quilt Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you.

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Re-Opening Your Business

Open

Each state is responding to the coronavirus differently, and that includes when businesses are allowed to re-open.

Within the next week, 20 states are loosening restrictions—with most attention going to Georgia—as they have had the most aggressive re-opening response. Cities and counties within these states can differ on their re-opening to, so pay attention to your local news to get the most accurate information on when restrictions will be lifted in your area.

Deciding whether or not to reopen your business ultimately comes down to you and your employees. Safety should remain the highest priority, and maintaining a feeling of safety for your employees is also critical.

If you do decide to reopen, here are some things to know.

Reopening requirements

Each state is going to be different, and some states have specific requirements. As a rule of thumb, make sure your employees wear masks at all times, and make masks to provide to your customers to wear while shopping too. Cloth masks should be hand washed after each use, and don’t let your store get so full your customers can’t adhere to the 6-foot social distancing rule.

Store cleaning should be increased too. Consider adding wipes, towels, or cleaner by the door so patrons don’t have to touch the surface. Find ways to sanitize your payment options; wipe the pin pad after a card transaction or provide a stylus to be cleaned after each use. Other surfaces and countertops should be frequently cleaned throughout the day as well.

If someone coughs or sneezes on a surface, clean it promptly. According to the CDC, you should wipe the surface first with soap and water, then clean the surface again with a disinfectant. Soft surfaces, such as fabric, will need to be washed. Don’t shake out contaminated soft surfaces, as that can spread the virus as well. Gloves should be worn while cleaning these surfaces, and you should wash your hands after removing your gloves. Lastly, if you allow patrons to use your restroom, clean the room after each use.

These steps will help prepare your location to re-open. Next week we’ll cover how to keep your employees protected, and what policies to change to provide them peace of mind.

If you’re looking for more information to guide you in owning a retail business, subscribe to American Quilt Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you.

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Stitchin’ Heaven Owners Named Dallas-Fort Worth Small Business Person of the Year

Stitchin' Heaven

Owners of Stitchin’ Heaven, Deb and her son Clay Luttrell, have been named the District 2020 Small Business Person of the Year by the Dallas-Fort Worth Small Business Administration.

Deb founded Stitchin’ Heaven—the largest quilt store in Texas—in 1996 and has since grown the quilt shop into a multimillion-dollar business. They’ve expanded their offerings to include online sales, projects, education, and group travel. Clay officially joined the Stitchin’ Heaven team in 2017 and facilitated the opening of a new location. The 17,500 square-foot store opened October 2019 in Quitman, TX (population 1,800).

Like many quilt retailers across the country, the pandemic has forced Stitchin’ Heaven to close its retail doors. Many factors went into the decision to close up shop before the state-mandated order. The safety of employees and customers as well as the fact that Stitchin’ Heaven is a destination attraction were among these reasons.

Stitchin’ Heaven is known for remaining relevant during ever-changing times. They’ve started hosting weekly quarantine quilt alongs on Facebook live and maintained their Block of the Month program.

What Stitchin’ Heaven is doing to help

Sewers across this nation are proving to be essential workers by providing essential supplies, like face masks. This rings true with Stitchin’ Heaven when they sent a customer going through a tough time supplies to make masks. This customers sent some of these supplies to her sister, who made 25 masks for her local health care facility. Now, her entire extended family are making masks that go as far as Arkansas and Tennessee.

“It starts as a little flicker,” Deb said. “And now we’re at bonfire level. If you have an idea, act on it, don’t wait. You never know when you act what other things will happen.”

Deb’s piece of advice during these difficult times is to remember that everything your business does should be done with the customer in mind.

And of course, Deb is grateful for everyone who helped along the way.

“Clay and I would like to thank all of our loyal customers who have been faithful to the business, our dedicated employees who work hard every day to provide exceptional service, our family who have played such a key role in the success of Stitchin’ Heaven, and the City of Quitman for their continued support. We have big plans for 2020 and beyond and can’t wait to continue growing as a household name for quilters around the country.”

If you’re looking for more information to guide you in owning a retail business, subscribe to American Quilt Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you.