WorldWide Drilling Resource®

Drilling Into Money Not Boring by Mark E. Battersby Don’t Let the Virus Kill Your Business L a wm a k e r s a n d t h e T r u m p Administration continue drafting meas- ures attempting to blunt the economic fallout from Coronavirus (COVID-19). As of this writing, the President signed one funding package that would expand a small business loan program usually offered to businesses experiencing natu- ral disasters. Under one new bill, employers must provide 14 days of paid sick leave if workers are ill or quarantined because of the virus, or have to care for an infected family member. They would be paid at not less than two-thirds of their normal rate. Fortunately, a tax credit, a direct reduction of the drilling operation’s tax bill, may help some employers. The Family and Medical Leave Act (FMLA) tax credit is a percentage of the amount of wages paid to a qualifying employ- ee while on family and medical leave for up to 12 weeks per taxable year. The applicable percentage is equal to 12.5% and increases by 0.25% for each percentage point by which the amount paid to a qualifying employee exceeds 50% of the employee’s wages. The maximum applicable percentage is 25%. Still in the tax arena, a Net Operating Loss or NOL occurs when a drilling business has more tax deductions than taxable income in a given year. NOL carrybacks formerly generated a refund of taxes paid in earlier years that provided an often badly needed infusion of cash. Today, most NOLs arising in tax years after 2017 can only be carried forward. What’s more, the NOL deduction is currently limited to 80% of taxable income (determined without regard to the deduction). President Trump has announced the government will be providing $50 billion to the Small Business Administration (SBA) to aid small firms struggling because of supply disruptions or lower sales as a result of the virus. The SBA also offers disaster assistance in the form of low-interest loans to businesses, located in regions affected by declared disasters. These loans off- set economic losses because of reduced revenues. An SBA Economic Injury Disaster Loan (EIDL) is for a business unable to meet its obligations, and to pay for ordinary and necessary operating expenses. EIDLs provide the necessary working capital to help small businesses survive until nor- mal operations resume after a disaster. Using his emergency authority, the President has instructed the Treasury Department to defer income tax payments cur- rently due April 15, without interest or penalties, for individuals and businesses negatively impacted by the Coronavirus. Although this will reportedly add an addi- tional $200 billion in liquidity to the econ- omy, there was no mention of the March 15 tax filing deadline for many businesses. As the ever-evolving fight against COVID-19 continues to emerge, atten- tion must be paid to new developments. And, as always, professional assistance may be advisable. Adding to the current worries, many experts are predicting this mess could lead to a recession. Helpful Websites: j https://home.treasury.gov/coronavirus j https://www.irs.gov/coronavirus j https://www.dol.gov/coronavirus j https://www.sba.gov (Small Business Payroll Protection Program) Mark michele@ worldwidedrillingresource.com Congratulat ions to: Tom Bates Beaverton, OR Winner for April! Time for a Little Fun! April Puzzle Solution: Heron Instruments, Inc. Rockmore International Win a prize! Send completed puzzle to: WWDR PO Box 660 Bonifay, FL 32425 fax: 850-547-0329 or e-mail: michele@ worldwidedrillingresource.com Can you identify which ads in this issue these two photos came from? 19 WorldWide Drilling Resource ® MAY 2020