Coronavirus Relief Update: What You Need to Know Now

Freeman Law, PLLC

2595 Dallas Parkway, Suite 420

Frisco, Texas

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Jason B. Freeman, J.D., CPA

Mr. Freeman is the founding member of Freeman Law, PLLC, a tax, white-collar, and litigation boutique law firm based in the Dallas-Fort Worth Metroplex. He is a trial attorney, author, adjunct professor at SMU’s School of Law, and licensed CPA. Mr. Freeman handles federal and state tax controversies and white-collar civil and criminal matters—including computer hacking, money laundering, embezzlement, bank fraud, tax evasion, securities and health care charges, and conspiracy. He also advises clients in tax planning and compliance matters.

Mr. Freeman was named to the American Bar Association’s “On the Rise –Top 40 Young Attorneys” in America list. He has been recognized multiple times by D Magazine as one of the Best Lawyers in Dallas for tax law and white-collar defense, and by Super Lawyers and Texas Monthly magazine as a Texas Rising Star. He is the President of the North Texas chapter of the American Academy of Attorney-CPAs, and the chairman-elect for the Texas Society of CPA's.

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Matthew Roberts, J.D., LLM

Matt is a Principal of the firm. He devotes a substantial portion of his legal practice to helping his clients successfully navigate and resolve their federal tax disputes, either administratively, or, if necessary, through litigation. As a trusted advisor, he has provided legal advice and counsel to hundreds of clients, including individuals and entrepreneurs, non-profits, trusts and estates, partnerships, and corporations.

Having served nearly three years as an attorney-advisor to the Chief Judge of the United States Tax Court in Washington, D.C., Matt leverages his unique insight into government processes to offer his clients creative, innovative, and cost-effective solutions to their tax problems. In private practice, Matt has successfully represented clients in all phases of a federal tax dispute, including IRS audits, appeals, litigation, and collection matters. He also has significant experience representing clients in employment tax audits, voluntary disclosures, FBAR penalties and litigation, trust fund penalties, and penalty abatement and waiver requests.

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The Coronavirus and Relief Developments Generally

• Visit our website at www.freemanlaw.com to download the Freeman Law Compendium of Recent Coronavirus Legislation and Regulatory Reform.

• It can be accessed through the following specific links: https://freemanlaw.com/blog/ and https://freemanlaw.com/freeman-laws-compendium-of-recent-coronavirus-legislation-and-regulatory-reform/

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IRS Updates

• IRS Notice 2020-18. Certain taxpayers automatically qualify to defer their federal income tax filings and payment of income tax until July 15, 2020.

• Eligibility. Any individual, trust, estate, partnership, association, company, or corporation with a federal income tax filing or payment deadline of April 15, 2020.

• Effect. For the above eligible taxpayers, the due date for filing a federal income tax return and making any federal income tax payment due April 15, 2020, is automatically postponed to July 15, 2020. These taxpayers do not need to file the applicable extension forms (Forms 4868 or 7004) to obtain the extension.

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IRS Updates Cont'd

• IRS Notice 2020-20. Certain taxpayers automatically qualify to defer their gift or generation-skipping transfer tax returns and payment of associated tax until July 15, 2020.

• Eligibility. Any person with a federal gift tax or generation-skipping transfer tax payment due or the requirement to file Form 709 on April 15, 2020.

• Effect. For the above eligible taxpayers, the due date for filing the Form 709 and making any associated gift or generation-skipping transfer tax is automatically postponed to July 15, 2020. These taxpayers do not need to file the applicable extension forms (Form 8892) to obtain the extension.

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IRS Updated Cont'd

• IRS Notice 2020-22. The IRS is waiving additions to tax under Sec. 6656 for failure to make a deposit of employment taxes (including withheld income taxes, taxes under the Federal Insurance Contributions Act, and taxes under the Railroad Retirement Tax Act).

• The waiver will apply to the extent that the amounts not deposited are equal to or less than the amount of refundable tax credits to which the employer is entitled under the Families First Coronavirus Response Act (Families First Act), P.L. 116-127 and under the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, P.L.116-136.

• The waiver will also apply to deposits of employment taxes reduced in anticipation of the credits for qualified sick leave wages, qualified family leave wages, and qualified health plan expenses paid beginning April 1, 2020, and ending Dec. 31, 2020, and deposits of employment taxes reduced in anticipation of the credits for qualified retention wages paid for the period beginning on March 13, 2020, and ending Dec. 31, 2020.

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The IRS's "People First" Initiative

• On March 25, 2020, the IRS unveiled its new People First Initiative, which is a “sweeping series of steps to assist taxpayers by providing relief on a variety of issues ranging from easing payment guidelines to postponing compliance actions.”

• Installment Agreements

• Offers-in-Compromise

• Field and Automated Collection

• Audits

• Appeals

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H.R. 748: Coronavirus Aid and Economic Security Act (“CARES Act”)

• SBA Loan Programs

• Individual Tax Provisions

• Business Tax Provisions

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Paycheck Protection Program SBA Loans (“PPP Loans”)

• The PPP is designed to provide loans of up to $10 million to qualifying small businesses in order to encourage employee retention during the coronavirus crisis by providing financial assistance with the payment of certain operational costs.

• If applicable requirements are met, part or all of the amount of the loan may be forgiven without giving rise to cancellation-of-indebtedness income for federal tax purposes.

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PPP Loans

• Eligibility. Generally must have 500 or fewer employees.

• Maximum Loan Amount. Generally, the maximum loan amount is limited to the lesser of (i) the average total monthly payments by the applicant for payroll costs incurred during the 1-year period prior to the date on which the loan is made, multiplied by 2.5, or (ii) $10 million.

• Allowable Uses. The recipient may use the loan proceeds to pay: (1) payroll costs; (2) costs related to the continuation of group health care benefits; (3) employee salaries, commissions, or similar compensations; (4) interest on mortgage obligations; (5) rent; (6) utilities; and (7) interest on debt obligations incurred prior to February 15, 2020.

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PPP Loan Aspects

• Non-recourse.

• No Personal Guarantee or Collateral.

• Interest Rate.

• Payment Deferral.

• No Prepayment Penalty.

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PPP Certification

• Certification. A borrower under the PPP must make a good-faith certification:

• That uncertainty of current economic conditions makes necessary the loan request to support ongoing business operations;

• Acknowledging that funds will be used to retain workers and maintain payroll or make mortgage, lease, or utility payments;

• That there are no other duplicative loan applications; and

• During the period from February 15, 2020, through December 31, 2020, the borrower has not received other loan amounts under the Act.

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Loan Forgiveness

• A loan amount may be forgiven in an amount equal to the sum of the following costs incurred and payments made in the “covered period,” which is the 8-week period beginning on the date of the origination of a covered loan (collectively, “Eligible Costs”):

• Payroll costs;

• payment of interest on a covered mortgage obligation;

• payment on a covered rent obligation;

• Any covered utility payment;

NOTE: Documentation Required.

Non-Taxability of Loan Forgiveness. While the forgiveness or cancellation of indebtedness

is generally taxable under the I.R.C., the Act specifically provides that such amounts

forgiven with respect to an amount equal to the sum of the costs described above are

excluded from gross income.

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Forgiveness Limitations

• Reduction in Number of Employees.

• Reduction for Reduced Salary and Wages.

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Individual Provisions

• Advanced Recovery Rebates.

• Tax-Favored Withdrawals from Qualified Retirement Accounts.

• Tax-Favored Loans from Qualified Retirement Accounts.

• Charitable Contributions.

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Advanced Recovery Rebates

• Recovery Rebates. The CARES Act adds new I.R.C. section 6428, which provides credits and advanced refunds to qualifying taxpayers.

• Amount of Credit.

• $1,200 for taxpayers who file single, head of household, and married filing separately.

• $2,400 if married filing jointly.

• Plus $500 for each qualifying child, which are generally dependents under the age of 17.

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Advanced Recovery Rebates

• Phase-Out. The amount of the credit is phased out for higher-income earners.

• These phase-outs begin for taxpayers whose AGI exceeds: (1) $150,000 for joint returns; (2) $112,500 for head of households; and (3) $75,000 for all others.

• The rebate is phased out at a rate of 5 percent of AGI above the applicable threshold.

• The rebate is therefore completely phased out for joint filers with no children and AGI exceeding $198,000; head-of-household filers with no children and AGI exceeding $146,000; and single filers with no children and AGI over $99,000.

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Retirement Fund Withdrawals

• No Early-Withdrawal Penalty. The CARES Act provides that the early 10% withdrawal penalty does not apply to any “coronavirus-related distribution.”

• For these purposes, “coronavirus-related distribution” means any distribution from an eligible retirement plan made on or after January 1, 2020, and before December 31, 2020, to an individual:

• (1) who is diagnosed with SARS CoV-2 or COVID-19 by a test approved by the Centers for Disease Control and Prevention;

• (2) whose spouse or dependent is diagnosed with such virus or disease by such test; or

• (3) who experiences adverse financial consequences as a result of being quarantined, being furloughed or laid off or having work hours reduced due to such virus or disease, being unable to work due to lack of child care due to such virus or disease, closing or reducing hours of a business owned or operated by the individual due to such virus or disease, or other factors determined by the Treasury Secretary.

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Retirement Fund Withdrawals

• Eligible Retirement Plans. Eligible retirement plans are defined as those plans described by existing I.R.C. section 402(c)(8)(B):

• an individual retirement account described in I.R.C. section 408(a),

• an individual retirement annuity described in I.R.C. section 408(b) (other than an endowment contract),

• a qualified trust,

• an annuity plan described in section I.R.C. section 403(a),

• an eligible deferred compensation plan described in I.R.C. section 457(b) which is maintained by an eligible employer described in I.R.C. section 457(e)(1)(A), and

• an annuity contract described in I.R.C. section 403(b).

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Retirement Fund Withdrawals

• Three-Year Repayment Period. If the individual who receives a coronavirus-related distribution pays back the funds at any time during the three-year period beginning on the date after the distribution date then the receipt and repayment are treated as a rollover transfer payment made within 60 days after the distribution. In other words, the amounts are treated as non-taxable.

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Loans from Qualified Plans

• Increased Loan Limits.

• Increased Percentage-Test Limit.

• Loan Repayment Delays.

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Charitable Contributions

• For tax years beginning in 2020, individual taxpayers may claim an above-the-line deduction for qualified charitable contributions of up to $300.

• Thus, taxpayers who do not itemize deductions may nonetheless qualify for this deduction.

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Business Provisions

• Employee Retention Credit

• Delay of Employer Payroll Taxes

• NOLs

• Loss Limitations

• Business Interest Deductions

• Bonus Deprecation

• Corporate AMT credits

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Employee Retention Credit For Employers.

• Eligible employers are allowed a credit against applicable employment taxes for each calendar quarter in an amount equal to 50% of the qualified wages of an employee for such calendar quarter.

• “Qualified wages” generally means the payment of wages due to the circumstances described above. However, it does not include wages that are taken into account under section 7001 or section 7003 of the Families First Coronavirus Response Act.

• Limitations may apply.

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Delay of Employer Payroll Taxes

• The CARES Act postpones the due date for depositing the employer portion of payroll taxes and 50 percent of self-employment taxes attributable to wages paid during 2020. The deferred amounts are payable in two installments over the next two years: one-half on December 31, 2021 and the one-half on December 31, 2022.

• Limitations may apply.

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Modifications for Net Operating Losses

• The CARES Act suspends the Tax Cuts & Jobs Act of 2017’s 80- percent-of-taxable-income limitation on net operating loss (“NOL”) carryovers with respect to tax years 2018, 2019, and 2020, and allows NOLs arising in those years to be carried back five years.

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Modification of Loss Limitations on Taxpayers other than Corporations

• The CARES Act removes the TCJA’s restrictions prohibiting non-corporate taxpayers from deducting “excess business losses” for tax years beginning before 2021.

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Modification of Limitation on Business Interest

• The CARES Act increases the ability to deduct business interest expenses by relaxing limitations that were imposed by the TCJA under I.R.C. section 163(j).

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Business Interest Modification for Partnerships

• For partnerships, the 30-percent limitation continues to be applied at the partnership level to business interest expenses for 2019.

• But 50 percent of the excess business interest that is allocated to a partner, and that is carried over from 2019, is treated as business interest expense that was paid or accrued by the partner in 2020 and is notsubject to the limitations for business interest income for 2020.

• The partner can elect out of this provision if preferred, but the partner may only revoke the election with the consent of the IRS.

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Qualified Improvement Property

• The CARES Act provides a long-awaited technical correction to the TCJA by retroactively amending I.R.C. section 168’s bonus depreciation rules to allow taxpayers to claim 100-percent bonus depreciation with respect to “qualified improvement property.”

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Acceleration of Alternative Minimum Tax Credits

• The CARES Act accelerates the ability of corporations to claim refundable Alternative Minimum Tax (“AMT”) credits and, thereby, obtain additional cash flow during the COVID-19 emergency.

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Families First Coronavirus Response Act

• On March 18, 2020, President Trump signed the Families First Coronavirus Response Act, which includes the Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act (collectively, the “FFCRA”).

• The FFRCA provides for, among other things, paid sick leave for employees to deal with the effects of the coronavirus

• The FFCRA is effective for leave requested from April 1, 2020, through December 31, 2020.

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FFCRA

• Paid Sick Leave for Workers

• For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded paid childcare leave when employees' children's schools are closed, or childcare providers are unavailable.

• Complete Coverage

• Employers receive 100% reimbursement for paid leave pursuant to the Act.

• Health insurance costs are also included in the credit.

• Employers face no payroll tax liability.

• Self-employed individuals receive an equivalent credit.

• An immediate dollar-for-dollar tax offset against payroll taxes will be provided

• Where a refund is owed, the IRS will send the refund as quickly as possible.

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FFCRA

• Small Business Protection

• Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or childcare is unavailable in cases where the viability of the business is threatened.

• To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released.

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FFCRA

• Paid Sick Leave Credit

• For an employee who is unable to work because of Coronavirus quarantine or self-quarantine or has Coronavirus symptoms and is seeking a medical diagnosis, eligible employers may receive a refundable sick leave credit for sick leave at the employee's regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days.

• For an employee who is caring for someone with Coronavirus, or is caring for a child because the child's school or child care facility is closed, or the child care provider is unavailable due to the Coronavirus, eligible employers may claim a credit for two-thirds of the employee's regular rate of pay, up to $200 per day and $2,000 in the aggregate, for up to 10 days. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

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FFCRA

• Child Care Leave Credit

• In addition to the sick leave credit, for an employee who is unable to work because of a need to care for a child whose school or childcare facility is closed or whose childcare provider is unavailable due to the Coronavirus, eligible employers may receive a refundable childcare leave credit. This credit is equal to two-thirds of the employee's regular pay, capped at $200 per day or $10,000 in the aggregate. Up to 10 weeks of qualifying leave can be counted towards the childcare leave credit. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

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FFCRA Example

• If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.

• If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.

• Equivalent childcare leave and sick leave credit amounts are available to self-employed individuals under similar circumstances. These credits will be claimed on their income tax return and will reduce estimated tax payments.

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FFCRA

• Enforcement

• The Department of Labor has issued a temporary non-enforcement policy that provides a period of time for employers to come into compliance with FFCRA. Under this policy, Labor will not bring an enforcement action against any employer for violations of FFCRA so long as the employer has acted reasonably and in good faith to comply with the Act. The Department of Labor will instead focus on compliance assistance.

• If the employer fails to provide FMLA or sick leave where required, the employer may be liable for penalties with respect to each violation. In addition, an employer may be liable for penalties if the employer discharges, disciplines, or in any other way discriminates against an employee who takes paid leave in accordance with the Act.

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FFCRA

• Claiming Sick Leave Credits Under FFCRA

• Eligible employers who pay qualifying sick or childcare leave can claim the sick leave/childcare leave credits on their federal employment tax returns (e.g., Form 941). However, employers can more quickly benefit from the credits by reducing their federal employment tax deposits.

• If the tax credit exceeds the amount of employment tax for the quarter, the excess is treated as an overpayment and will be refunded by the IRS to the employer.

• If there are insufficient federal employment taxes to cover the amount of the credits, the employer may request an advance payment of the credits from the IRS by submitting a Form 7200, Advance Payment of Employer Credits Due to COVID-19.

• Eligible employers claiming the credits for qualified leave wages must retain records and documentation related to and supporting each employee’s leave to substantiate the claim for the credits, and retain Forms 941 and 7200 and any other applicable filings made to the IRS requesting the credit.

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FFCRA

• Credit Amount Under FFCRA

• The credit amount is equal to 100% of the qualified family leave wages or the qualified sick leave wages paid by the employer with respect to such calendar quarter.

• The credit is generally allowed against the tax imposed by Sections 3111(a) or 3221(a) (e.g., the employer portion of FICA). However, the amount of the applicable credit cannot exceed the maximum permissible amount for the qualified family leave wages or the qualified sick leave wages.

• The amount of any wages required to be paid by reason of the Act are not considered wages for purposes of I.R.C. section 3111(a) (e.g., the employer portion of Social Security taxes).

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FFCRA

• Self-Employed Individuals

• The FFCRA also provides relief for self-employed individuals with FMLA and Sick Leave equivalents. A self-employed individual is eligible for these equivalents if the individual regularly carries on any trade or business and would be entitled to leave as if the individual were an employee of an employer (other than himself or herself).

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The Coronavirus Economic Stabilization Act of 2020

Title IV, Subtitle A of the Coronavirus Aid, Relief, and Economic Security Act

CESA

The Coronavirus Economic Stabilization Act of 2020 (“CESA”) is Title IV, Subtitle A of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), created for the purposes of providing liquidity to the financial system that supports lending to eligible businesses, States or municipalities. The total amount appropriated for CESA is $500 billion H. R. 748 (2020), §4001.

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Businesses Eligible to Receive Relief Under the CESA

• An air carrier; or

• A U.S. business that has not otherwise received adequate economic relief under other provisions of the CARES Act.

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Available Funding

CESA authorizes not more than $500 billion in assistance. This amount is allocated as follows:

• Up to $25 billion for passenger air carriers, repair stations and other businesses that are approved to perform inspection, repair, replace or overhaul services, and ticket agents;

• Up to $4 billion for cargo air carriers;

• Up to $17 billion for businesses critical to maintaining national security; and

• Up to $454 billion plus the total unused amounts in the above three categories for other eligible businesses.

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Criteria Needed to Apply for Relief Under CESA

For passenger air carriers, repair stations and other businesses that are approved to perform inspection, repair, replace or overhaul services, ticket agents; cargo air carriers; and businesses critical to maintain national security:

• The applicant is an eligible business for which credit is not reasonably available at the time of the transaction;

• The intended obligation by the applicant is prudently incurred; and

• The eligible business must have incurred or is expected to incur covered losses such that the continued operations of the business are jeopardized without such financing;

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Forms of Relief Available

For passenger air carriers, repair stations and other businesses that are approved to perform inspection, repair, replace or overhaul services, ticket agents; cargo air carriers; and businesses critical to maintain national security:

• The Treasury Department will provide loans, loan guarantees, and other investments (including purchases of obligations or other interests both directly from issuers and in secondary markets).

• For businesses that fall under H.R. 748 (2020), §4003(b)(4):

• The Treasury Department will provide direct loans to businesses as borrowers and not part of:

• A syndicated loan;

• A loan originated by a financial institution in the ordinary course of business; or

• A securities or capital markets transaction.

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Procedures for the Loan Application Process

• The Secretary of the Treasury is required to publish procedures for application to participate in the program within 10 days after enactment of the CARES Act. These procedures likely will include guidance to eligible businesses with respect the application process, including the timing for application submissions and the information or other materials necessary to be considered for relief.

• With respect to direct loans for business which are classified under H.R. 748 (2020), §4003(b)(4), a specific time period for the application process has not been provided.

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Terms of Loans Provided by CESA

Subject to the specific terms and conditions discussed below, the Treasury Department has been given broad discretion as to the form, terms and conditions, covenants, and requirements of the loans and loan guarantees. Notwithstanding this broad discretion, CESA provides that:

• Loans or loan guarantees can have a term to maturity of no longer than five (5) years; and

• The loan must be sufficiently secured on be made at a rate that (1) reflects the risk incurred and (2) to the extent practicable, the interest rate cannot be less than the market rate for comparable obligations prevalent prior to the COVID-19 outbreak. the risk and current average yield on outstanding marketable obligations of the US of comparable maturity. Id §4003(c)(2)(D).

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Terms of Loans Provided by CESA (cont’d)

There is no specific program for mid-sized businesses (500 to 10,000 employees), but CESA does include language requiring the Treasury Department to endeavor to implement a program that provides financing to lenders for the purpose of making loans to eligible businesses.

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Conditions for Loans

Businesses that receive assistance must agree that they will:

• Not, during the term of the loan or loan guarantee and for twelve (12) months after the loan or loan guarantee is no longer outstanding, purchase shares of its or any parent company’s equity securities that are listed on a national securities exchange, unless a contractual obligation to repurchase shares was in effect on the date of enactment of the CARES Act;

• Not, during the term of the loan or loan guarantee and for twelve (12) months after the loan or guarantee is no longer outstanding, pay dividends or make other capital distributions with respect to the common stock of the eligible business;

• Maintain, during the period commencing on March 24, 2020 and ending on September 30, 2020, at least 90% of the eligible business’s employment levels in place on March 24, 2020;

• includes a certification by the eligible business that it is created or organized in the United or under the laws of the United States and has significant operations in and a majority of its employees based in the United States; and

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Conditions for Loans (cont’d)

• Comply with the following limitations regarding executive compensation from the execution date of the loan agreement (or similar instrument) to one year after the date on which the loan is outstanding:

• No officer or employee whose total compensation in 2019 exceeded $425,000 shall: (1) receive from the eligible business total compensation that (for a consecutive 12-month period) exceeds total compensation received by the officer or employee from the business in 2019; and (2) receive from the business severance pay or other benefits upon termination of employment with the eligible business which exceeds twice the maximum total compensation received by the officer or employee from the eligible business in calendar year 2019; and

• No officer or employee of the business whose total compensation exceeded $3 million in 2019 may receive during any 12 consecutive months compensation in excess (1) $3 million; and (2) 50 percent of the excess over $3 million of the total compensation received by the officer or employee from the eligible business in calendar year 2019

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Conditions for Loans (cont’d)

Businesses that fall under H.R. 748 (2020), §4003(b)(4) that receive assistance must agree that they will:

• Not, during the term of the loan or loan guarantee and for 12 months after the loan or loan guarantee is no longer outstanding, repurchase shares of its or any parent company’s equity securities that are listed on a national securities exchange, unless a contractual obligation to repurchase shares was in effect on the date of enactment of the CARES Act;

• Not, during the term of the loan or loan guarantee and for 12 months after the loan or guarantee is no longer outstanding, pay dividends or make other capital distributions with respect to the common stock of the eligible business; and

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Conditions for Loans (cont’d)

• Comply with the following limitations regarding executive compensation from the execution date of the loan agreement (or similar instrument) to one year after the date on which the loan is outstanding:

• No officer or employee whose total compensation in 2019 exceeded $425,000 shall: (1) receive from the eligible business total compensation that (for a consecutive 12-month period) exceeds total compensation received by the officer or employee from the business in 2019; and (2) receive from the business severance pay or other benefits upon termination of employment with the eligible business which exceeds twice the maximum total compensation received by the officer or employee from the eligible business in calendar year 2019; and

• No officer or employee of the business whose total compensation exceeded $3 million in 2019 may receive during any 12 consecutive months compensation in excess (1) $3 million; and (2) 50 percent of the excess over $3 million of the total compensation received by the officer or employee from the eligible business in calendar year 2019.

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