The CARES was passed and signed into law providing much needed relief to small businesses… There is a lot of information in the bill the key points are below…
Extra unemployment payments: The $260 billion estimated cost is subject to change based on the number of people filing for unemployment.
The bill makes major changes to unemployment assistance, increasing the benefits and broadening who is eligible. States will still continue to pay unemployment to people who qualify. That amount varies state by state, as does the amount of time people are allowed to claim it.
Gig workers and freelancers: Typically, self-employed people, freelancers and contractors can't apply for unemployment. This bill creates a new, temporary Pandemic Unemployment Assistance program through the end of this year to help people who lose work as a direct result of the public health emergency.
Student loans: Employers can provide up to $5,250 in tax-free student loan repayment benefits. That means an employer could contribute to loan payments and workers wouldn't have to include that money as income.
Emergency grants: The bill provides $10 billion for grants of up to $10,000 to provide emergency funds for small businesses to cover immediate operating costs.
Small Business Loans: There is $350 billion allocated for the Small Business Administration to provide loans of up to $10 million per business. Any portion of that loan used to maintain payroll, keep workers on the books or pay for rent, mortgage and existing debt could be forgiven, provided workers stay employed through the end of June.
Special Rules for Using Retirement Funds for Coronavirus costs: A distribution from a qualified retirement plan can be taken without the 10% penalty to anyone experiencing adverse financial consequences as a result of the Coronavirus. However, the withdrawal doesn’t escape income taxes but allows the taxpayer to spread the taxable income over a 3 year period beginning with 2020. Also, the taxpayer can avoid taxation if he/she repays the retirement plan with in three years of receiving the distribution.
Employee Retention Credit: One year only credit against an employer’s 6.2% share of Social security taxes for any business that is forced to close it’s operations but continues to pay it’s employees during the shutdown.
Delay of Payment of Employer Payroll Tax and Self Employment Tax: Allows employers to delay payment on their 2020 6.2% employer match portion of Social Security to 50% by the end of 2021 and 50% by the end of 2022. But note, that this provision is not available to any business that takes out a payroll protection loan that is forgiven. See the Small business loan section above.
There is a great deal of information and we can list out all the details here, so please contact our office if have any questions or need assistance.
source:NPR.org and Forbes