Provisions for Employers
Paycheck Protection Program: Small businesses and eligible nonprofits with fewer than 500 employees, as well as self-employed and independent contractor individuals, may qualify for a loan up to $10 million determined by 8 weeks of prior average payroll plus an additional 25% of that amount. Loan payments will be deferred for six months.
If workforce is maintained, SBA will forgive the portion of the loan proceeds that are used to cover the first 8 weeks of payroll and certain other expenses following loan origination.
* Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.
More information: https://www.sba.gov/funding-programs/loans/paycheck-protection-program#section-header-2
Economic Injury Disaster Loans and Loan Advance: small business owners in all U.S. states are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000 to help overcome the temporary loss of revenue they are experiencing. Funds will be made available within three days of a successful application, and this loan advance will not have to be repaid.
Link to Apply: https://covid19relief.sba.gov/#/
SBA Debt Relief: under this program SBA will pay the principal and interest of new SBA 7(a) loans issued before Sep/27/2020. The SBA will pay the principal and interest of current 7(a) loans for a period of six months.
SBA Express Bridge Loans: allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 in loans with fast turnaround. These can be term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan.
Link to find an Express Bridge Loan Lender: https://www.sba.gov/local-assistance/find/?type=SBA%20District%20Office&pageNumber=1
Business Tax Provisions:
· Employers are eligible for a 50 percent refundable payroll tax credit on wages paid up to $10,000 during the crisis. It would be available to employers whose businesses were disrupted due to virus-related shutdowns and firms experiencing a decrease in gross receipts of 50 percent or more when compared to the same quarter last year. The credit is available for employees retained but not currently working due to the crisis for firms with more than 100 employees, and for all employee wages for firms with 100 or fewer employees.
· Employer-side Social Security payroll tax payments may be delayed until January 1, 2021, with 50 percent owed on December 31, 2021 and the other half owed on December 31, 2022. The Social Security Trust Fund will be backfilled by general revenue in the interim period.
· Firms may take net operating losses (NOLs) earned in 2018, 2019, or 2020 and carry back those losses five years. The NOL limit of 80 percent of taxable income is also suspended, so firms may use NOLs they have to fully offset their taxable income. The bill also modifies loss limitations for non-corporate taxpayers, including rules governing excess farm losses, and makes a technical correction to the treatment of NOLs for the 2017 and 2018 tax years.
· Firms with tax credit carryforwards and previous alternative minimum tax (AMT) liability can claim larger refundable tax credits than they otherwise could.
· The net interest deduction limitation, which currently limits businesses’ ability to deduct interest paid on their tax returns to 30 percent of earnings before interest, tax, depreciation, and amortization (EBITDA), has been expanded to 50 percent of EBITDA for 2019 and 2020. This will help businesses increase liquidity if they have debt or must take on more debt during the crisis.
More Information: https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources
In Norther California, businesses can get help to fill out any of the loan/program applications through: https://nc.ecenterdirect.com/signup
Provisions for Workers
Extra Unemployment Payments: the bill adds $600 per week from the federal government on top of whatever base amount a worker receives from the state. The boosted payment will last for four months. The legislation also adds 13 weeks of unemployment insurance. The additional payment will be disbursed by the estates along with their standard rates.
Link to Apply for Unemployment: https://www.edd.ca.gov/unemployment/filing_a_claim.htm
Pandemic Unemployment Assistance: allows self-employed and contractors who lost work as a direct result of the public health emergency to apply for unemployment through the end of 2020.
Link to Apply for Unemployment: https://www.edd.ca.gov/unemployment/filing_a_claim.htm
Cash Payments: individuals earning up to $75,000 annually will received a $1,200 check payment. Payment phases down for individuals annually earning in between $75,000 and $99,000. And it disappears completely for individuals with annual earnings higher than $99,000.
Married couples filing jointly each receive a $1,200 check if joint annual earning is less than $150,000. Payment phases down for couples annually earning in between $150,000 and $198,000. And it disappears completely for couples with annual earnings higher than $198,000.
Families will get $500 per child.
