HR 748, Coronavirus Aid, Relief, and Economic Security Act (CARES)
Here is the third major piece of federal legislation enacted to address the coronavirus pandemic. Below are highlights of the new law that may affect you, your businesses, and your employees now, soon, and later.
Now:
• Can defer paying fifty percent (50%) of Social Security payroll tax due for 2020 and 2021.
• Can immediately monetize tax losses.
• Extends the federal tax filing deadline to July 15.
• Foreclosure of federally-backed home mortgages blocked for at least 60 days.
• Evictions banned at properties connected to the federal government.
Soon:
• Small Business Administration (“SBA”) loans and grants that apply to businesses negatively affected by the coronavirus and Covid-19, including but not limited to, hotels, restaurants, and non-profits.
o Provides $350 billion in small business loans for businesses with less than 500 employees, including self-employed, to pay for payroll, rent, and utilities; loans become grants if loans are used as such (maximum loan of $10 million).
o Increases SBA Express loans amounts from $325,000 to $1 million and reduces time to receive loan.
o Increases eligibility for Economic Injury Disaster Loans (“EIDL”), including to sole proprietorships and private non-profits; removes requirement for loan guarantees on amounts less than $200,000; authorizes $10,000 advance when qualified and requested, which may not require repayment.
• Allocates $150 billion to support hospitals and healthcare workers; outlines accelerated payments for rural hospitals and those serving vulnerable populations (i.e., children’s hospitals) when elective procedures are suspended.
• Large employers can receive loans from the Secretary of the Treasury.
o $454 billion available, with conditions, including:
– Must keep 90% of workforce through September and no outsourcing or moving overseas for two years.
– May not break union agreements and must stay neutral if union attempts to unionize.
– Executive pay and benefits limited; no ability to repurchase stock or pay dividends.
• Tax rebate checks of $1200 per adult whose most recent Adjusted Gross Income is no more than $75,000 (filed singly), $112,500 (filed as head of household), or $150,000 (filed married jointly). Payment amount decreases as AGI increases above the limits. Qualifying adults will receive $500 per child under age 17 for whom a child tax credit was claimed on most recent taxes. This is a tax credit for 2020.
• Increased unemployment eligibility, maximum time to receive unemployment (39 weeks v. 26 weeks), payments increased by $600 per week. Freelance and contract workers may receive benefits.
Later:
• Fifty-percent (50%) employee retention tax credit against what employers pay in Social Security payroll taxes, up to $10,000 per employee.
Martin Browne attorneys are on hand to answer your questions and provide guidance on how to navigate these critical issues. Contact us at (937) 324-5541 or www.martinbrowne.com.