CARES Act and Other COVID-19 Business Resources

CARES Act and Other COVID-19 Business Resources

TREASURY DEPARTMENT NEWS

Paycheck Protection Program (PPP)

The Treasury and Small Business Association (SBA) expect to have the Paycheck Protection program up and running by April 3, and expect businesses will be able to go to a participating SBA 7(a) lender, bank, or credit union to apply for a loan with same-day approval. The loans will be forgiven as long as funds are used to keep employees on payroll and for certain other expenses. The program provides capital to businesses without collateral, personal guarantees, or SBA fees. More details here.

You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. You should consult with your local lender as to whether it is participating in the program.

Starting April 3, 2020, small businesses and sole proprietorships can apply. Starting April 10, 2020, independent contractors and self-employed individuals can apply. We encourage you to apply as quickly as you can because there is a funding cap.

Employee Retention Credit

The Employee Retention Credit is a refundable tax credit, available to all employers, regardless of business size, and covers up to 50 percent of up to $10,000 in wages.

Click here for answers to a number of questions such as how the credit is calculated, which wages qualify, etc.

Click here for instructions on how eligible employers may receive the credit plus the new Form 7200 (Advance Payment of Employer Credits due to COVID-19).

Unemployment for the Self-Employed

According the PA Office of Unemployment Compensation, the federal CARES Act will provide unemployment benefits to the self-employed, gig workers, and other individuals who previously were not eligible for unemployment. Special instructions will be provided to these individuals.

Click here to apply.

 

PENNSYLVANIA WORKING CAPITAL RESOURCE

Pennsylvania COVID-19 Working Capital Access Program (CWCA)

The COVID-19 CWCA Program is administered by the Pennsylvania Industrial Development Authority (PIDA) and provides critical working capital financing to small businesses that are adversely impacted by the COVID-19 outbreak. Learn more here.

All CWCA loan applications must be submitted through a Certified Economic Development Organization (CEDO). For the list of CEDO’s operating within Pennsylvania, please refer to the CEDO webpage.

 

IRS NEWS

Net Operating Losses

The Tax Cuts and Jobs Act (TCJA) has been temporarily updated under the CARES Act to remove the taxable income limitation so that net operating losses (NOL) fully offset all taxable income for 2018, 2019 and 2020. For these years, NOLs can be carried back five tax years.

Payroll Tax Deferral

Under the CARES Act, taxpayers can defer paying the employer portion of Social Security payroll taxes through the end of 2020, with all 2020 deferred amounts due in two equal installments, one in December 2021, the other in December 2022.

Note that deferral is not available to employers receiving loan forgiveness through the Payroll Protection Program.

Employment Taxes

On April 1, the IRS issued Notice 2020-22, which waives additions to tax for employers required to pay qualified sick/family leave wages as mandated by the Families First Coronavirus Response Act (FFCRA). The notice applies to deposits of employment taxes (including withheld income taxes, FICA taxes, and Railroad Retirement Act taxes). The notice also applies to employment tax deposits reduced in anticipation of the credits with respect to the period beginning on March 13, 2020 (the date the president declared a disaster) and ending December 31, 2020.

 

SMALL BUSINESS ASSOCIATION LOAN RESOURCES

SBA Economic Injury Disaster Loan

The SBA is offering low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of COVID-19.

The CARES Act expanded access to the Economic Injury Disaster Loans program to businesses with fewer than 500 employees, sole proprietorships and independent contractors.

Learn more and apply here.

Express Bridge Loan (EBL) Pilot Program

According to the SBA, the EBL Pilot Program allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 with less paperwork. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan. If a small business has an urgent need for cash while waiting for decision and disbursement on Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan. Learn more here.

SBA Express Loans

The CARES Act increases the maximum SBA Express loan (a loan usually processed in 36 hours) for impacted businesses from $350,000 to $1 million through December 31, 2020.

Small Business Debt Relief Programs

For small businesses with current non-disaster SBA loans, under the CARES Act, the SBA will cover all loan payments on these loans, including principal, interest and fees, for six months. This relief will also be available to new borrowers who take out loans within six months of March 27, 2020. PPP Loans and EIDLs are not eligible for this debt-relief program.

The loans eligible for this relief include those guaranteed by the SBA, such as the SBA Business Loan Program (including the Community Advantage Pilot Program, but excluding PPP Loans) or Title V of the Small Business Investment Act. Loans made by an intermediary to a small business using loans or grants received under the SBA’s Microloan Program are also eligible.

 

 

 

 

 

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