COVID-19 INFORMATION & RESOURCES FOR EMPLOYERS
**Updated 09/16/2021 at 1:46 p.m.
NH unemployment rate rises slightly in August
New Hampshire Employment Security reported the state’s unemployment rate ticked up slightly in August. NHES on Sept. 14 reported the rate at 3%, up from 2.9% in July.
Employers across the state continue to report difficulty in finding workers for open positions.
The August 2020 seasonally adjusted rate was 6.6%, reflecting the impact of the coronavirus pandemic on New Hampshire’s labor force statistics.
Seasonally adjusted estimates for August 2021 placed the number of employed residents at 728,700, a decrease of 790 from the previous month and an increase of 18,910 from August 2020. The number of unemployed residents increased by 130 over-the-month to 22,210. This was 27,860 fewer unemployed than in August 2020.
From July 2021 to August 2021, the total labor force decreased by 660 to 750,910. This was a decrease of 8,950 from August 2020. Seasonally adjusted New Hampshire nonfarm employment for August 2021 was 659,500. This was 700 fewer jobs than in July 2021 and 22,800 more jobs than in August 2020.
Private industry accounted for 573,100 of these jobs in August 2021; 100 fewer jobs than in July 2021 and 23,500 more jobs than in August 2020.
Nationally, the seasonally adjusted unemployment rate for August 2021 was 5.2%, a decrease of 0.2 percentage points from the July rate, and a decrease of 3.2 percentage points from the August 2020 rate. National nonfarm payroll employment increased by 235,000 from July to August 2021.
US Chamber: Small businesses more cautious about future as COVID cases rise
WASHINGTON, D.C. —With the Delta variant causing a rise in COVID-19 cases, small business owners are showing increasing caution when it comes to future plans for hiring and investing in their business, according to a poll taken July 16-30, and released Sept. 14 by the U.S. Chamber of Commerce and MetLife.
While small business owners are generally happy with their current business health and cash flow, plans for future investment are plateauing compared to earlier in 2021.
Almost half (48%) of small business owners say they plan to keep investments in their business the same over the next year, up 11 percentage points from Q1 (37%). Twenty-nine percent plan to increase investment, a drop from 35% in Q1. Also, small business owners who plan to keep their current staffing levels over the next year (as opposed to hiring more) is at 62%, an increase from 52% last quarter.
At the same time, small business owners are optimistic about their current business health and recognize improvement in the overall economy. Fifty-five percent believe the health of their business is good, 66% believe their cash flow situation is good, and 58% expect their revenue to increase in the next year.
American Rescue Plan: Treasury reports progress and impact after six months
The U.S. Department of the Treasury released a new report on the first six months of the department’s implementation of the American Rescue Plan. Since the American Rescue Plan was signed by President Biden, the Treasury Department has disbursed approximately $700 billion of the $1 trillion in programs administered by Treasury.
This includes over $450 billion paid directly to families and households, including through more than 170 million Economic Impact Payments totaling over $400 billion, over 106 million Child Tax Credit (CTC) payments totaling more than $46 billion, and over 1 million payments of Emergency Rental Assistance totaling more than $5 billion.
GOFERR launches new CARES Act funded COVID-19 business expenses program
CONCORD — The Governor’s Office for Emergency Relief and Recovery (GOFERR) has launched the COVID-19 Expenses Relief Program to assist New Hampshire for-profit Main Street businesses with COVID-19 related business expenses in 2020 and 2021.
"Thousands of New Hampshire small businesses have been helped through our state programs to address the economic impacts of COVID-19,” said Commissioner Taylor Caswell, executive director of GOFERR. “We realize, however, that as many small businesses have continued to adapt their operations throughout the pandemic many remain in need of financial assistance. The COVID-19 Expenses Relief Program will help small businesses offset a portion of these COVID-19 related costs.”
Eligible businesses can apply for reimbursement of a portion of their eligible expenses until 4 p.m. Oct. 1, 2021, via the GOFERR portal. Awards will be issued following the application deadline, on a capped, pro-rata basis dependent upon total eligible expenses.
Eligible expenses for reimbursement include but are not limited to the following categories:
- Costs incurred while closed due to COVID-19 (such as prorated rent, mortgage payments and utilities);
- Costs incurred as a result of reopening after COVID-19 related closure (such as PPE, workforce safety training and installation of physical safety measures);
- Increased costs of doing business as a result of COVID-19 (such as HVAC improvements, creation or addition of indoor or outdoor space for social distancing purposes, and increased costs due to supply chain disruptions or increased demand).
Many questions for businesses on Biden vaccine mandate
Seacoast Current reports many questions remain for businesses and employees following President Joe Biden’s mandate that businesses that employ 100 or more workers to require proof of the COVID-19 vaccination or have employees undergo routine testing.
Business & Industry Association Interim President David Juvet told Seacoast Current he has not seen any further information on how the mandate should be implemented.
"We haven't seen any details relating to it, so I don't know when it becomes effective,” Juvet said. “We don't know how they're planning on enforcing this, I don't know what kind of reporting will be required for companies to comply. I know next to nothing about it other than the broad directive," Juvet said.
Juvet said BIA received inquires from its members before Biden's announcement about whether or not they could implement a vaccination mandate. He's not sure how many members followed through with their own mandate.
Biden's mandate takes the onus off a company that had been considering a mandate, he said.
"BIA believes that anyone who is able to receive a vaccine should receive a vaccine,” he said. “We're very strongly, proactively in favor of people getting vaccinated. We resist government telling private sector businesses how to run their businesses or how to best run their businesses."
NH sued for ending federal unemployment benefits
New Hampshire Bulleting reports New Hampshire is the 15th state being sued for ending federal unemployment benefits before the Sept. 6 end date. The suit filed in Hillsborough County Superior Court on behalf of four people who received federal pandemic benefits claims the N.H. Department of Employment Security did not have authority to end the federal benefits. The court set a hearing for Sept. 3. Click here to read N.H. Bulletin’s story.
NH unemployment numbers continue march to pre-pandemic levels
Granite Staters are returning to work, NH Business Review reported on Aug. 30.
The latest number of new unemployment claims was 12% lower than the number reported the previous week and was over 120 fewer than the average of 587 initial weekly claims seen before the pandemic began.
For the first time since March 2020, there were less than 5,000 individuals collecting unemployment in the week ending Aug. 14: 4,919, a decrease of 3.5% and 1,200 fewer claims than three weeks before. The federal Bureau of Labor Statistics reports only 750 Granite Staters have to return to work before the state’s employment numbers are at its pre-pandemic level.
UNH poll: 52% of NH residents support businesses requiring vaccination
The New Hampshire Union Leader on Aug. 26 reported more than half of state residents support the right of businesses and institutions to require workers to get vaccinated against COVID-19, according to a new poll by the University of Hampshire.
The poll, published Aug. 25, showed 53% of New Hampshire residents support employer vaccine requirements. A national Gallup poll released in August showed 52% of people nationwide favored the idea of their employers requiring a COVID-19 vaccine.
Among unvaccinated people who responded to the poll, almost a quarter said a work-mandated requirement to be vaccinated would prompt them to get the shot.
A network of anti-regulation groups is protesting vaccine requirements in New Hampshire.
How several NH towns reached 70% vaccination threshold
Annmarie Timmons of NH Bulletin on Aug. 24 reported on how New Hampshire towns with vaccination rates of 70% and higher achieved that milestone.
While there are fewer than 10 towns, they have this in common, she wrote: They leveraged personal relationships and viewed no outreach as too small.
It’s been a winning strategy. While the state’s fully vaccinated rate has hovered around 54% of all residents and 61% of eligible residents for weeks, Jackson has fully vaccinated about 85% of its full population, Lancaster about 80%, and Lyme, in the Upper Valley, nearly 70%, according to the state’s COVID-19 dashboard.
Outreach is a big part of the answer, but demographics matter, too.
NH health workers hope approval of Pfizer COVID-19 vaccine will increase vaccinations
MANCHESTER — WMUR on Aug. 24 reported that health workers in New Hampshire said Monday they hope the approval of the Pfizer COVID-19 vaccine will boost confidence among those who are still hesitant to get the shot.
The Food and Drug Administration announced Monday that Pfizer's vaccine is fully approved. It had been distributed under an emergency use authorization.
"The public can be confident that this vaccine meets the FDA's gold standard," said FDA Commissioner Janet Woodcock.
The New Hampshire Department of Health and Human Services said about 54% of residents are fully vaccinated.
NH’s unemployment rate remains at 2.9%
New Hampshire’s preliminary seasonally adjusted unemployment rate for July 2021 was 2.9%, according to New Hampshire Employment Security. This was unchanged from the June rate, which remained at 2.9% after revision.
The July 2020 seasonally adjusted rate was 8.1%, reflecting the impact of the coronavirus pandemic on New Hampshire’s labor force statistics.
Seasonally adjusted estimates for July 2021 placed the number of employed residents at 729,490, a decrease of 1,620 from the previous month and an increase of 31,870 from July 2020. The number of unemployed residents increased by 520 over-the-month to 22,110. This was 39,770 fewer unemployed than in July 2020. From June 2021 to July 2021, the total labor force decreased by 1,100 to 751,600.This was a decrease of 7,900 from July 2020.
Seasonally adjusted New Hampshire nonfarm employment for July 2021 was 658,900. This was 5,000 more jobs than in June 2021 and 34,600 more jobs than in July 2020. Private industry accounted for 572,600 of these jobs in July 2021; 2,700 more jobs than in June 2021 and 33,600 more jobs than in July 2020.
Nationally, the seasonally adjusted unemployment rate for July 2021 was 5.4 percent, a decrease of 0.5 percentage points from the June rate, and a decrease of 4.8 percentage points from the July 2020 rate. National nonfarm payroll employment increased by 943,000 from June to July 2021.
— New Hampshire Employment Security
Paycheck Protection Program accepts 340K submissions in two weeks
WASHINGTON – Since the opening of the Paycheck Protection Program (PPP) Direct Borrower Forgiveness Portal on August 4, the U.S. Small Business Administration has received more than 340,000 submissions from borrowers with PPP loans of $150,000 or less, highlighting Administrator Isabella Casillas Guzman’s priority of rushing relief to the smallest of small businesses and far exceeding expectations.
"We are incredibly excited that in just two weeks, the Direct Borrower Forgiveness Portal is providing small businesses with a streamlined, user-friendly way to apply for forgiveness and receive relief on these essential PPP loans,” said Patrick Kelley, Associate Administrator for SBA’s Office of Capital Access.
Borrowers who are interested in starting their applications can access the PPP Direct Forgiveness Portal. The SBA also encourages interested borrowers to attend an upcoming live webinar and Q&A sessions:
The state has scheduled additional virtual job fairs focused on geographical areas of New Hampshire:
For more information and to register for a job fair, visit virtualjobfairs.nh.gov.
SBA launches $100M assistance program for small businesses
WASHINGTON –The U.S. Small Business Administration on May 26 announced it is accepting applications for its new Community Navigator Pilot Program.
The initiative, established by the American Rescue Plan, will leverage a community navigator approach to reach the nation’s smallest businesses, with a priority focus on those owned by socially and economically disadvantaged individuals, as well as women and veterans. SBA will accept applications through July 12 and anticipates making award decisions by August.
“The Community Navigator Pilot Program is a crucial addition to our SBA programs because it helps us to connect with small businesses that have historically been underserved or left behind,” said SBA Administrator Isabella Casillas Guzman. “These businesses – the smallest of the small in rural and urban America, and those owned by women, people of color or veterans – have suffered the greatest economic loss from this pandemic.”
The Community Navigator Notice of Funding Opportunity will be open to applications from nonprofit organizations, state, local and tribal governments, SBA resource partners and other organizations. Selected partners will engage in targeted outreach for small businesses in underserved communities to help small businesses get the resources and support they need to get back on track as the economy continues to recover from the COVID-19 pandemic.
Competitive grant awards will range from $1 million to $5 million for a two-year performance period. Applicants have until July 12 to submit their applications at grants.gov. Performance periods are projected to commence in September. Those eligible to apply must meet and demonstrate abilities to support the requirements of this funding opportunity.
For more information on the Community Navigators Initiative, visit www.sba.gov/navigators.
Gov. Sununu to convert federal unemployment supplement to work bonus
Gov. Chris Sununu on May 18 announced New Hampshire will end its participation in the federal program that provides a $300 federal supplement to states’ unemployment payments to jobless individuals.
Sununu said the supplement, which was authorized by the federal government to run through Labor Day, will end June 19. New Hampshire will, however, set aside $10 million from the federal program to provide back-to-work bonuses. Those who get and keep jobs for at least eight weeks that pay less than $25 an hour will get a $1,000 bonus. Part-timers would get $500.
Sununu first indicated New Hampshire would end its participation in the federal program during his opening remarks at BIA’s second annual New Hampshire Economic Summit May 13.
"The federal government wants the program to go all the way until September," Sununu said at the webinar summit. “That’s not going to happen. We will most certainly end the program a lot sooner than that.”
Many New Hampshire businesses, including several BIA member companies, have said the federal supplement is making it even harder for them to find employees for job openings, with many remaining unfilled.
At least 21 states have announced they will end participation in the federal enhanced unemployment benefits program.
To view a recording of BIA’s New Hampshire Economic Summit webinar, click here.
Consumer confidence soars in latest BIA survey
After falling to record lows in February, consumer conﬁdence has rebounded in New Hampshire, based on the latest BIA Report on Consumer Conﬁdence, conducted by the UNH Survey Center May 13-17. Forty percent of respondents think state businesses will enjoy good times ﬁnancially in the coming year, nearly twice the number that felt this way in the last survey in February.
COVID-19 restrictions have been loosened in New Hampshire and many believe this will lead to increased economic gains in the coming year. When asked how they expect New Hampshire businesses will do in the upcoming year, 40% of Granite Staters think state businesses will enjoy good times financially, 16% think they will experience bad times, and 44% anticipate mixed conditions.
The percentage of New Hampshire residents who expect good economic times (40%) has nearly doubled since the last survey in February (22%).
“We expect consumer confidence to grow in coming weeks as the state continues recovering from the ill effects of the COVID-19 pandemic. The worst, we hope, is over,” said BIA President Jim Roche.
Read the complete survey report at this link.
SBA proposal revises small business size standards for two industrial sectors
WASHINGTON – The U.S. Small Business Administration is seeking public comments on a proposed rule that would revise the small business size standards for businesses in two North American Industrial Classification System (NAICS) sectors to increase small business eligibility for SBA’s loan programs.
The sectors reviewed in the proposed rule are Wholesale Trade (Sector 42) and Retail Trade (Sector 44-45). SBA proposes to increase size standards for 49 industries in those sectors.
SBA estimates about 1,800 additional firms in these sectors would become eligible for SBA’s loan and other federal non-procurement programs under the proposed size standards. NAICS codes under sectors 42 and 44-45 do not apply to federal procurement and hence size standard revisions in this proposed rule will have no impact on contracting. Wholesalers and retailers can qualify for contracting as small businesses under the 500-employee nonmanufacturer size standard, which is not revised in this proposed rule.
The proposed rule is part of the second five-year comprehensive review of small business size standards, as required under the Small Business Jobs Act of 2010. The proposed revisions reflect changes in industry conditions and SBA’s policy position under the current economic situation due to the COVID-19 pandemic. In response to the pandemic, SBA is retaining current size standards where data suggests size standards should be lowered.
Comments can be submitted on this proposed rule on or before July 26 at www.regulations.gov, using: RIN 3245-AH10.
The SBA-issued White Paper, “SBA’s Size Standards Methodology,” explains how SBA establishes, reviews and modifies its receipts-based and employee-based small business size standards. For more information, visit “announcements about updating size standards” at sba.gov/size.
Tax credits available to small employers to provide paid leave to employees receiving COVID-19 vaccines
WASHINGTON — The Treasury Department and Internal Revenue Service on April 21 announced more details of tax credits available under the American Rescue Plan to help small businesses, including providing paid leave for employees receiving COVID-19 vaccinations.
Eligible employers, such as businesses and tax-exempt organizations with fewer than 500 employees and certain governmental employers, can receive a tax credit for providing paid time off for each employee receiving the vaccine and for any time needed to recover from the vaccine. For example, if an eligible employer offers employees a paid day off to get vaccinated, the employer can receive a tax credit equal to the wages paid to employees for that day up to certain limits.
The additional details, provided in a fact sheet released by the IRS, detail basic facts about the employers eligible for the tax credits. It also provides information on how these employers may claim the credit. For more information, see the most recent snapshot released by the Treasury.
New Hampshire’s unemployment rate falls to 2.8% in April
New Hampshire’s unemployment rate for April was 2.8%, a decrease of 0.2 percentage points from March. The rate peaked at 16% last April as the coronavirus pandemic spread. New Hampshire is tied for the lowest state unemployment rate in the nation with Nebraska, South Dakota and Utah.
Seasonally adjusted estimates for April 2021 placed the number of employed residents at 735,970, a decrease of 490 from March and an increase of 118,630 from April 2020. The number of unemployed residents fell by 1,460 over-the-month to 21,410 — 96,280 fewer unemployed than in April 2020. From March 2021 to April 2021, the total labor force decreased by 1,950 to 757,380, an increase of 22,350 from April 2020.
The unadjusted April 2021 unemployment rate for New Hampshire was 2.7%, a decrease of 0.5 percentage points from the March rate, which remained at 3.2% after revision. The April 2020 unadjusted rate was 16.1%.
Nationally, the seasonally adjusted unemployment rate for April 2021 was 6.1%, up 0.1 percentage point from March, but down 8.7 percentage points from April 2020. The national unadjusted rate for April 2021 was 5.7%, a decrease of 0.5 percentage points from March, and a decrease of 8.7 percentage points from April 2020.
The full New Hampshire Employment Security April report can be viewed at this link.
Treasury announces families with children to receive monthly child tax credit
WASHINGTON — The U.S. Department of the Treasury and Internal Revenue Service announced May 17 that the first monthly payment of the expanded Child Tax Credit (CTC) from the American Rescue Plan will be made July 15.
Roughly 39 million households — covering 88 percent of children in the United States — are slated to begin receiving monthly payments without any further action required.
Eligible families will receive a payment up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 to 18. The Treasury and IRS announced the increased CTC payments, will be made on the 15th of each month, unless the 15th falls on a weekend or holiday.
The American Rescue Plan increased the maximum CTC in 2021 to $3,600 for children under the age of 6 and to $3,000 per child for children between ages 6 and 17. The American Rescue Plan is projected to lift more than 5 million children out of poverty this year, cutting child poverty by more than half.
Households covering more than 65 million children will receive the monthly CTC payments through direct deposit, paper check or debit cards, and the Treasury and IRS are committed to maximizing the use of direct deposit to ensure fast and secure delivery.
The Treasury’s complete news release can be seen at this link.
BIA, N.H. chambers' webinar on search for workers available online
As many employers continue to struggle to find workers, particularly at the lower end of the wage spectrum, BIA and the New Hampshire Association of Chamber of Commerce Executives hosted a webinar on recruitment efforts May 17. The webinar featured Joe Doiron, director of workforce development, Office of Workforce Opportunity, New Hampshire Department of Business and Economic Affairs. Doiron discussed his office’s resources and efforts to help employers address staffing challenges.
To view and download a copy of the presentation, use this link. To view a recording of the webinar, use this link.
Treasury distributes $6.1 billion through Emergency Rental Assistance Program
WASHINGTON -- The U.S. Department of the Treasury on May 21 announced it has distributed $6.1 billion through the Emergency Rental Assistance (ERA) program in less than two weeks since $21.6 billion was allocated to the program.
A part of the American Rescue Plan, this $21.6 billion ERA program was allocated to prevent evictions and ensure basic housing security for millions of Americans impacted by the affordable housing challenges exacerbated by COVID-19.
Nearly 7 million Americans reported being behind on rent in the second half of April 2021, and more than 40 percent of those renters worry that they could be evicted sometime in the next two months. There are almost 12 million Americans who lack confidence that they can make next month’s rent. Evictions can have long-lasting consequences for families — potentially disrupting school, worsening health, displacing neighborhood networks of support, and making it more difficult to find safe, affordable housing in the future.
“The pandemic has exacerbated America’s already severe housing affordability crisis, threatening the security and livelihoods of families and landlords through no fault of their own,” said Deputy Secretary of the Treasury Wally Adeyemo. “Treasury is committed to providing direct, rapid support to those impacted by the COVID-19 pandemic and addressing the deep disparities in our housing systems that threaten our economic recovery.”
Treasury will continue to distribute ERA funds in the coming months. For more information, visit the Treasury webpage.
Treasury launches Coronavirus State and Local Fiscal Recovery Funds to deliver $350 billion
WASHINGTON — The U.S. Department of the Treasury on May 10 announced the launch of the Coronavirus State and Local Fiscal Recovery Funds, established by the American Rescue Plan Act of 2021, to provide $350 billion in emergency funding for state, local, territorial and tribal governments.
The Treasury released details on how funds can be used to respond to acute pandemic-response needs, fill revenue shortfalls among state and local governments and support the communities and populations hardest hit by the COVID-19 crisis. Eligible state, territorial, metropolitan city, county and tribal governments will be able to access funding directly from the Treasury Department to assist communities as they recover from the pandemic.
“Today is a milestone in our country’s recovery from the pandemic and its adjacent economic crisis. With this funding, communities hit hard by COVID-19 will able to return to a semblance of normalcy; they’ll be able to rehire teachers, firefighters and other essential workers – and to help small businesses reopen safely,” said Secretary Janet L. Yellen.
The Coronavirus State and Local Fiscal Recovery Funds provide substantial flexibility for each jurisdiction to meet local needs — including support for households, small businesses, impacted industries, essential workers and communities. Within the categories of eligible uses listed, recipients have broad flexibility to decide how best to use this funding to meet the needs of their communities. In addition to allowing for flexible spending up to the level of their revenue loss, recipients can use funds to:
Support public health expenditures; address negative economic impacts caused by the public health emergency; aid communities and populations hardest hit by the crisis; provide premium pay for essential workers and invest in water, sewer and broadband infrastructure.
For an overview of the Coronavirus State and Local Fiscal Recovery Funds program including an expanded use of eligible uses, see the Treasury’s release here.
For updates from Treasury Department Relief and Recovery Programs, sign up here.
Gov. Sununu asks Treasury for flexibility in use of COVID-19 recovery funds
Gov. Chris Sununu has requested U.S. Treasury Secretary Janet Yellen allow New Hampshire to make adjustments in the use of federal pandemic funding assistance.
The governor on May 5 announced he sent two letters to Yellen regarding the Emergency Rental Assistance and Paycheck Protection Program.
Sununu said limitations on the use of the Emergency Rental Assistance were too narrow and limited the state from best helping renters. The governor said if the Treasury provided New Hampshire with more flexibility, “our state could deploy these dollars in a way that will have a positive, generational impact on our most vulnerable communities – both rural and urban – throughout the Granite State.”
Sununu cited New Hampshire’s near zero percent vacancy rates for apartments and challenges in finding affordable housing. He said the Treasury’s definition of "other housing related expenses" is overly restrictive, “allowing only for expenses such as security deposits and application or screening fees, accrued late fees, internet service, and potentially for the cost of a hotel or motel stay.”
“The challenge of enabling people to maintain their housing during this pandemic isn't just about rental relief,” he added.
Sununu formally requested the Treasury expand its definition of “other housing related expenses due directly or indirectly to COVID-19.”
“In order to meet the goals underlying this relief program, New Hampshire must have the ability to increase access to affordable housing for those that would otherwise qualify for the program,” he wrote.
Sununu recommended people who need help paying rent or mortgage assistance contact CAPNH.org for help as there are millions of dollars available for help.
Read Sununu’s complete letter here.
As for the Paycheck Protection Program, Sununu requested a waiver to any requirement that the Governor's Office for Emergency Relief and Recovery (GOFERR) treat more than 50% of PPP payments as revenue in determining what organizations must return part or all of grants under the state's 2020 lost revenue program.
According to Sununu’s letter, on Oct. 19, 2020, the Treasury added FAQ #59, requiring the state to "take into account the business' receipt of the PPP or EIDL loan or grant. If the business has received a loan from the SBA that may be forgiven, the recipient should assume for purposes of determining the business' need that the loan will be forgiven."
Sununu said given “the ongoing and past impacts the pandemic has had on state businesses coupled with the timing of the issuance of FAQ #59, GOFERR has determined it would be detrimental to the state and its businesses to change how it accounts for PPP in calculating a grantee's 2020 revenue. As such, the state intends to treat only 50% of PPP as revenue for purposes of determining if a grantee is required to return any portion of a lost revenue grant.”
Read Sununu’s complete letter here.
U.S. economy expands for three consecutive quarters
WASHINGTON, D.C. — The Bureau of Economic Analysis on May 3 confirmed the U.S. economy has now expanded for three consecutive quarters, after the pandemic caused GDP to plummet 19.2% at an annual rate in the first half of 2020.
In the first quarter of 2021, economic growth was bolstered by two additional rounds of Economic Impact Payments (EIPs), extensive vaccination of the population, easing of COVID-19 restrictions, and continuing progress reopening the economy. Significant progress has been made in revitalizing many sectors, and the economy has proven its resilience in the face of multiple headwinds. Nonetheless, a full recovery continues to depend upon vaccinating enough of the population for effective herd immunity and ensuring individuals and businesses can thrive, despite the challenges posed by the global pandemic.
The first quarter GDP report, as well as recent monthly data on employment and personal income, show rapid improvements in production and employment — largely due to vaccine distribution and unprecedented fiscal support. Nevertheless, the effects of the pandemic on economic activity remain highly uneven. While GDP looks likely to reach pre-pandemic levels in the current quarter, employment remains well below pre-pandemic levels, particularly in lower-wage, labor-intensive sectors like leisure and hospitality.
According to the advance estimate released last week, real GDP advanced 6.4% at an annual rate in the first quarter of 2021, following annualized growth of 4.3% in the final quarter of 2020. The advance estimate is based on incomplete source data and will be revised in coming months. Three major components of GDP – private consumption, private business fixed investment and residential investment – grew at, or close to, a double-digit pace. Growth of private domestic final purchases – the sum of personal consumption, business fixed investment, and residential investment – nearly doubled in the first quarter, to 10.6% at an annual rate. This measure attests to a significant acceleration in the underlying upward momentum in private demand during the first quarter.
To read the full economy statement by Catherine Wolfram, acting assistant secretary for economy policy, for the Treasury Borrowing Advisory Committee, click here.
Source: U.S. Treasury
IRS offers reminder for those who don't normally file tax returns
Although payments are automatic for most people, the IRS urges people who don’t normally file a tax return and haven’t received Economic Impact Payments to file a 2020 tax return to get all the benefits they’re entitled to under the law, including tax credits such as the 2020 Recovery Rebate Credit, the Child Tax Credit, and the Earned Income Tax Credit. Filing a 2020 tax return also will assist the IRS in determining if someone is eligible for an advance payment of the 2021 Child Tax Credit, which will begin to be disbursed this summer.
For example, some federal benefits recipients may need to file a 2020 tax return – even if they don't usually file – to provide information the IRS needs to send payments for a qualifying dependent. Eligible individuals in this group should file a 2020 tax return as quickly as possible to be considered for an additional payment for their qualifying dependents.
People who don't normally file a tax return and don't receive federal benefits may qualify for these Economic Impact Payments. This includes those experiencing homelessness, the rural poor, and others. Individuals who didn't get a first or second round Economic Impact Payment or got less than the full amounts may be eligible for the 2020 Recovery Rebate Credit, but they’ll need to file a 2020 tax return. See the special section on IRS.gov: Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return. Free tax return preparation is available for qualifying people.
Eligibility changes for third round of Economic Impact Payments
The IRS reminds taxpayers the income levels in this third round of Economic Impact Payments have changed. This means some people won't be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit. Payments will begin to be reduced for individuals making $75,000 or above in Adjusted Gross Income ($150,000 for married filing jointly). The payments end at $80,000 for individuals ($160,000 for married filing jointly); people with Adjusted Gross Incomes above these levels are ineligible for a payment.
Individuals can check the Get My Payment tool on IRS.gov to see the payment status of these payments. Additional information on Economic Impact Payments is available on IRS.gov.
EIDL Loan increase requests
The SBA provided updated instructions for EIDL borrowers who wish to request a loan increase:
Follow these instructions if you wish to request a loan increase:
- Email CovidEIDLIncreaseRequests@sba.gov
- Use subject line “EIDL Increase Request for [insert your 10-digit application number]”
- Be sure to include in the body of your email identifying information for your current loan including application number, loan number, business name, business address, business owner name(s), and phone number.
- Important: Do not include any financial documents or tax records with your initial request. You will receive a follow up email notification if we need additional documents.
Note: Loans are capped at $500,000 and these instructions only pertains to the loan and not to the Targeted Emergency Advance Grant.
U.S. Chamber continues assistance for small businesses
The U.S. Chamber of Commerce launched its Save Small Business Initiative last April at the onset of the pandemic. The ongoing effort includes providing information and advocacy. For more information:
Small business emergency assistance programs
Reopening procedures and state-specific health and safety measures
The U.S. Chamber Foundation’s Path Forward series offering expert insights on how to reopen businesses and the economy safely. The chamber recently published a guide on tax credits designed to pay for time off for small business owners or their employees to get vaccinated against the coronavirus. Its Rally for Recovery Commitment encourages Americans to get vaccinated.
The U.S. Chamber cited its advocacy efforts including helping Congress create the Paycheck Protection Program and to extend it several times, as well as successfully pushing Congress to pass relief programs for bars, restaurants and shuttered venues.
Learn more about how the chamber has been dedicated to supporting small businesses during the pandemic at Above the Fold.
The following links are provided to employers seeking more information on best practices for responding to Coronavirus:
US Department of Labor