Top 5 CARES Act Programs for Business
Post written by Grafton deButts, VP of Membership & Government Affairs
View the Chamber’s COVID-19 Resource Page here
Late into the night on Wednesday, the United States Senate passed the CARES Act. By all accounts by Friday evening the President will be signing this historic $2 trillion relief package for our businesses and for our workers. Information is starting to flow from Capital Hill on what is in this package. The US Chamber has provided a detailed summary of the bill and also provides many helpful resources to businesses seeking federal assistance.
Please find the highlights of US Chamber’s CARES Act summary below:
Small Business “Paycheck Protection Program:” A $349 billion lending program, modeled on existing SBA 7(a) program, with 100% government guarantee (as opposed to 75% guarantee for 7(a) loans). The borrower shall have a portion of their loan forgiven in the amount equal to their payroll costs (not including costs for compensation above $100,000 annually), interest payments on mortgages, rent payments, and utility payments between February 15 and June 30, 2020. Loan forgiveness will be reduced if the borrower reduces employment by a ratio similar to their reduction in employment or if borrower reduces salaries and wages by more than 25%.
Business Tax Provisions: Employee retention credit for employers is subject to closure due to COVID-19 (permits fully refundable 50% tax credit applicable to the employer’s share of payroll 5 taxes on wages up to $10,000 per employee; widely available with special rules for small employers). Delay of payment of employer payroll taxes (defer payment of the employer share of the Social Security tax due between now and January 1, 2021 to December 31, 2021 (50% due) and December 31, 2020 (remaining due).
Paid Leave Update: This includes changes made to the “Phase 2” Bill that was just enacted. Paid FMLA leave under FFCRA is capped at $200 per day and $10k in aggregate. Paid sick leave under the FFCRA is capped at $511 per day and $5,110 in aggregate; this amount drops to $200 per day and $2000 in aggregate for sick leave taken to care for a family member or because of a school closure. Workers who are laid off after March 1 but then rehired are eligible for paid FMLA leave. Employers can keep money they would have deposited for payroll taxes in anticipation of refunds from the Treasury for paid sick and paid FMLA leave provided to employees, including amounts that would have been refunded.
Unemployment Programs: Unemployment insurance will be extended by 13 weeks and include a four-month enhancement of benefits. Unemployment compensation is available for those not eligible for regular UI, including those who may have exhausted benefits.
Payments & Relief for Individuals: Direct payments to taxpayers equal to $1,200 per individual ($2,400 joint return) plus an additional $500 per child. Phased out for incomes above $75,000 ($150,000 joint).
Please continue to follow the Loudoun Chamber’s Facebook Page and check back regularly for new webinars coming soon to review the CARES Act and how your businesses may benefit.