The CARES Act signed into law by the President on March 27, 2020, gives important relief to small businesses effective by the COVID-19 pandemic. Our attorneys have read the Act and are available to guide you through the relevant relief options available for your business. Some of the most important and immediate relief available are summarized below.
Employer’s share of Payroll Taxes
Effective March 27, 2020 – if an employer is current on all estimated Payroll Tax payments the employer may defer all future payments until January 1, 2021. This can provide immediate financial relief to your business.
Corporate Taxes Due
Any estimated income tax payments of a corporation due between March 27, 2020 through October 15, 2020, are deferred without interest or penalty until October 15, 2020.
SBA Economic Injury Disaster Loans
Small businesses can apply for Economic Injury Disaster Loans (EIDL) right now at https://www.sba.gov/disaster/apply-for-disaster-loan/index.html. Additionally you can apply for an emergency EIDL Advance of up to $10,000 and that application is also available now and the above link.
- Loans have a repayment term of 10 years interest rate not to exceed 4%
- Loan payments may be deferred for up to 1 year
- EIDL Advances of up to $10,000 – may not have to be repaid (so long as funds are used for an approved purpose), even if SBA loan is ultimately denied.
- Certain amounts of loan debt on application, can be converted to a grant not needing to be repaid.
- Up to 8 weeks of payroll expenses
- Up to 8 weeks of utilities
- Up to 8 weeks of mortgage or rent expenses
- Forgiven loan amounts are excluded from the taxpayer’s taxable income
- Maximum loan amounts are determined by multiplying the monthly average payroll expenses for the previous 12 months by 2.5 or $10,000,000 – whichever is less.
The CARES Act is an enormous aid package that provides much needed help to businesses effected by the COVID-19 coronavirus pandemic. If your business needs financial assistance contact our office and ask to speak to one of our attorneys about how the CARES Act can help your business.