On Friday, March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The new law provides extensive relief to small businesses and individuals to combat the economic hardships caused by the COVID-19 pandemic. Small businesses have the opportunity to apply for loans that will be forgiven in full if certain conditions are met, and certain business-friendly tax changes were also enacted. Many individuals will receive tax credits in the form of rebate checks, and rules surrounding unemployment insurance were relaxed to include more workers.
Key Provisions of the CARES Act:
1. Paycheck Protection Program (PPP) Loans:
- Forgivable Loans: Small businesses can apply for PPP loans, which can be forgiven if used for eligible expenses, including payroll costs, rent, utilities, and mortgage interest.
- Eligibility: Businesses with 500 or fewer employees, including sole proprietors, independent contractors, and self-employed individuals, can apply for these loans.
2. Economic Injury Disaster Loans (EIDL):
- Advance Grants: Eligible businesses can receive up to $10,000 in advance grants, which do not need to be repaid, even if the loan application is denied.
- Low-Interest Loans: Businesses can access low-interest loans to cover working capital needs.
3. Tax Changes:
- Employee Retention Credit: A refundable payroll tax credit is available for 50% of wages paid by eligible employers to certain employees during the COVID-19 crisis.
- Deferred Payroll Taxes: Employers can defer payment of the employer share of Social Security tax.
4. Individual Relief:
- Rebate Checks: Many individuals will receive tax credits in the form of rebate checks. The amount varies based on income and filing status.
- Expanded Unemployment Benefits: Unemployment insurance rules have been relaxed to include more workers, and benefits have been increased and extended.
How to Apply and Get Assistance:
Businesses and individuals seeking relief under the CARES Act should act promptly to understand their eligibility and application requirements. For more detailed information and personalized assistance, please refer to our latest Client Alert or contact our team at Gesmer Updegrove LLP.
Our experienced attorneys, including Joe Laferrera, Aaron Kriss, and Sean Gilligan, are available to provide guidance on navigating the complexities of the CARES Act. We can assist with loan applications, understanding tax implications, and accessing individual benefits.
We are committed to helping our clients through these challenging times by providing the resources and support needed to access the relief offered by the CARES Act. Please reach out to us for more information and tailored assistance.
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At Gesmer Updegrove LLP, we are dedicated to supporting you through these unprecedented times and ensuring you have the tools and information necessary to sustain and grow your business.