The recently signed Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") contains over 800 pages of legislation to provide financial relief during this time of crisis. The bill provides emergency assistance and health care response for individuals, families, and businesses affected by the 2020 coronavirus pandemic.
In response to numerous requests, we are providing resources to help you understand the CARES Act. To the best of our knowledge, these resources are current, but please check with the appropriate agencies to confirm the details.
Find out what the CARES Act means for you, your family, and your business.
Less Publicized Benefits of the CARES Act
There are numerous benefits included in the CARES Act that have not been as widely publicized, including retirement plan changes, payroll tax credits, deferred payments, expanded net operating loss carrybacks, bonus depreciation, and many others.
CARES Act Key Tax Provisions
Many provisions in the CARES Act can be beneficial to your business, including several retroactive provisions that may help you access an influx of cash. An overview of the act’s key tax provisions includes both tax and nontax measures for businesses.
Paycheck Protection Program
The Paycheck Protection Program, is meant for small businesses (those with fewer than 500 employees) that have been impacted by the pandemic. Those that qualify can take advantage of the program to help them make payroll and cover other expenses from February 15 to June 30. If the employer maintains its payroll, the portion of the loans used for covered payroll costs, interest on mortgage obligations, rent, and utilities would be forgiven. All loan terms will be the same for everyone.
Employee Retention Credit
Employers are eligible for a 50% refundable payroll tax credit on wages paid up to $10,000 during the crisis. It is available to employers whose businesses were fully or partially suspended due to virus-related shutdowns or businesses that have experienced a decrease in gross receipts of 50% or more.
Deferred Payment of Employer Payroll Taxes
The CARES Act allows employers to defer paying the employer portion of certain payroll taxes through the end of 2020. The deferred employment tax would then be paid over the following two years. Interest-free loans can also be obtained under the CARES Act to pay for business expenses such as these; however, these loans carry dangers that businesses should understand.
Families First Coronavirus Response
The Families First Coronavirus Response Act (FFCRA Act) requires certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19.
Unemployment Assistance for Independent Contractors
The coronavirus pandemic has hit many independent contractors hard including a host of gig workers and freelancers. Congress is providing unprecedented relief to a class of workers who have chosen to be their own bosses and, as a result, have excluded themselves from the benefits associated with employment. There are many benefits passed through the CARES Act and the FFCRA that apply to independent contractors as well.
Using each of the resources requires thought and planning. If you need an introduction to someone who can help, please don’t hesitate to ask. We can make an introduction or share more information to help.
