The knowledge you need

COVID-19 may not have been unexpected in 2021, but it continued to shape the year for almost everyone. To incentivize employers to offer paid time off for affected employees, legislation in March 2020 provided tax credits for paid sick and family leave. In the first six to eight months, it’s estimated that six to eight million U.S. workers took advantage of the expanded leave if they were unable to work or telework. Now, the IRS has issued detailed reporting guidance for employers that offered paid sick, and family leave this year. Since the period for offering paid leave is coming to an end on September 30, 2021, Atlanta businesses have time to calculate accurate reporting data and begin preparing W-2s to be issued in January of next year.

Many Atlanta area businesses are continuing to recover from the financial challenges created by the pandemic. Despite the obvious increase in demand for many products and services, many businesses continue to struggle financially. While there are many concerns, a primary issue is the inability to satisfy the deferred and short-term debt obligations taken to survive the early days of the pandemic. When combined with the dwindling number of federal COVID-19 relief programs, it is easy to understand the depth of the issue.

Saving for retirement is an important step that every Atlanta individual and family needs should prioritize, at the right time, to ensure there will be enough for the golden years. Unfortunately, when seismic events like an unexpected global pandemic, even the best-laid plans can be cast aside. The unfortunate result of the forced business closures and stay-at-home orders meant that unemployment increased at robust rates. Many were left in unexpected situations where retirement savings was likely not top of mind. Despite these conditions, it appears optimism about meeting retirement savings goals was not impacted.

Unfortunately, COVID-19 continues to present complications for Atlanta organizations. While it appears, the restrictive regulations will not return, the arrival of virus variants (delta and MU) have become a cause for concern. It was reported by the Georgia Department of Public Health that for the two weeks ending on August 30th, both Fulton and Gwinnett Counties had experienced a sharp increase in new infections. Although far less than what was reported during the height of the pandemic, it does mean that businesses will have to plan for this new risk factor. It is also a prompt to review internal policies on COVID-19 including safeguards, exposure notification, and other policies.

During the pandemic, many Atlanta businesses became familiar with the COVID-19 relief options offered through the Small Business Administration (SBA). This included the Paycheck Protection Program (PPP), Economic Injury Disaster Loans (EIDL), and the Employee Retention Tax Credit (ERC). As the recovery continues and these programs end, many are looking for new ways to jump-start growth through new business opportunities. While the dynamics have changed, the SBA offers other programs such as the SBA 8(a) Business Development Program which can help qualifying businesses compete for federal contracts.

Organizations that spent $750,000 or more in federal funds with fiscal year-ends beginning after June 30, 2021, may need to abide by updated requirements from the Office of Management and Budget (OMB). The agency’s recently issued guidelines, the 2021 Compliance Supplement, supersede previously issued guidelines from November 2020. Given the increase in the number of organizations that have accepted funding from federal programs, an update was needed to ensure the proper reporting, testing, and compliance is occurring.

Unfortunately, the automobile industry has been unable to recover as quickly. Manufacturing has slowed due to a chip shortage and has left auto dealers with inventory imbalances. According to the COX Dealer Sentiment Index, Second Quarter 2021, many are still struggling to find inventory to keep up with demand. In fact, 55% of respondents indicated inventory acquisition is a top priority, while 63% indicated lack of inventory is preventing growth. Despite these complications, profitability continues to rise to allow dealers to recover to pre-pandemic levels.

The COVID-19 pandemic created significant financial challenges for many businesses, individuals, and families. In January 2020, the unemployment rate in Atlanta was 3.2% but by June it had more than doubled to 7.6%.  These numbers reflect how the fear of virus transmission and new government orders conspired to create adverse circumstances. While companies were busy adapting operations to find new ways to serve customers, individuals and families were re-assessing financial priorities to weather the storm.

For Atlanta businesses hit hard by the pandemic, the COVID-19 relief programs available through the Small Business Administration (SBA) have provided a desperately needed lifeline. This reality is reflected in the data which shows just how many businesses and organizations received financial assistance. Since the Paycheck Protection Program and Restaurant Revitalization Fund are now closed, many are looking towards the Employee Retention Tax Credit (ERTC) for additional relief.

The unwelcome news that the delta variant has caused an unexpected increase in the number of new COVID-19 infections in Atlanta has stirred up concern amongst business owners. Many are wondering if the restrictive government orders which wreaked havoc on so many last year will make a return. There is a concern about how businesses will manage without the benefit of the Small Business Administration’s (SBA) most popular COVID-19 program, the Paycheck Protection Program (PPP). Since recent updates to the forgiveness process reveal the SBA is looking to shut down the program, it is clear additional funding will not be allocated.