Coronavirus Disease (COVID-19) Resources

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FAQ: Institutions as Employers Provisions

Q.  Are students employed on campus, who are not in the Federal Work-Study program,
     eligible to file for unemployment under the enhanced criteria?
A. While not explicitly spelled out in the CARES Act, there is no language in the bill that would bar these students from filing for unemployment benefits. However, since some payroll taxes are not required for these students, NAICU is in the process of determining if this will be permitted.
Q.  Can colleges take advantage of the payroll tax delay?

A. Employers, including colleges and universities, can delay the employer portion of the 6.2 percent Social Security tax imposed on employees’ wages between March 27, 2020 and December 31, 2020. Fifty percent is due by December 31, 2021 and the remainder by December 31, 2022. This does not apply to the employee portion of the Social Security tax.

Q.  What is the employee retention tax credit?

A. The CARES Act creates a refundable payroll tax credit of up to $5,000 for wages paid by employers to employees during the COVID-19 crisis. The credit is available to employers whose operations were “fully or partially” suspended due to government orders related to COVID-19. The credit is available to private, nonprofit colleges and universities and to their related entities if they are organized as 501(c)(3)s. We believe this would include a range of organizations such as university foundations, research institutions, alumni organizations, university presses, etc. Public institutions - if they or their related entities are deemed arms or subsidiaries of a state government - are ineligible. Employers that receive a loan under the Paycheck Protection Program are not eligible to receive the credit.

Q.  Are colleges that have closed campuses to in-person education, but now offer students
     instruction online considered under a “partial” suspension?

A. The CARES Act does not define “partial” suspension. While no guidance has been issued, we believe you could estimate for planning purposes that a reasonable interpretation of the provision would be that it applies to employees of offices, services or facilities (e.g. dining, dorms, athletic facilities) that have been “fully or partially” suspended would be covered. However, it would likely not cover a faculty member who continues to teach on an online platform.

Print the FAQs:  CARES Act Frequently Asked Questions