What is Available to You and Your Business in the Coronavirus Aid, Relief & Economic Security (CARES) Act?

There is power in knowledge and preparation during these unprecedented and uncertain times. At TRP Sumner, it is our goal to give our clients and the communities we serve guidance and solutions to help combat the effects of COVID-19 on their business and personal lives.

On Friday, March 27, 2020, President Trump signed a bipartisan $2 trillion economic relief plan that will offer aid to American households and businesses. Below is a list of some of the major highlights of this relief plan.

BUSINESSES

Paycheck Protection Program

• Establishes loans up to a maximum of $10 million with a maximum interest rate of 4%.
• Allowable uses of these loans include payroll support, such as employee salaries, paid sick or medical leave, insurance premiums, and mortgage, rent, and utility payments.
• This loan program waives any collateral and personal guarantee requirements as well as establishes that the borrower shall be eligible for loan forgiveness.
• Loan forgiveness shall be equal to the amount spent by the borrower during an 8-week period after the loan origination date on payroll costs, interest payment on mortgages incurred after February 15, 2020, payment of rent on any lease in force prior to February 15, 2020, and payment on any utility for which service began before February 15, 2020.
• Canceled indebtedness resulting from loans underneath the Paycheck Protection Program will not be included in the borrower’s taxable income.

Employee retention credit – This is a refundable payroll tax credit for 50% of wages paid by employers to employees during the COVID-19 crisis.

Delay of payment of employer payroll taxes – This provision allows employers and self-employed individuals to defer payment of the employer share of the Social Security tax they otherwise are responsible for paying to the federal government.

Modification for net operating losses – Net operating losses that are normally allowed to only be carried forward may now be carried back for 5 years, if the loss was incurred during the 2018, 2019, or 2020 tax years.

INDIVIDUALS

• Stimulus payments – Most adults will receive $1,200 plus an additional $500 per qualifying child under age 16. Married couples with no children earning $150,000 or less will receive a total of $2,400.
• Student loans – There will be automatic suspensions until September 30th for any student loan held by the federal government. To know if your loan qualifies, check your online account in the coming weeks to see if your loan service provider has reset their billing systems.
• Retirement accounts – No one will have to take required minimum distributions from IRAs or other retirement accounts in 2020. You may withdraw up to $100,000 this year without the usual 10% penalty. Income taxes on distributions may also be spread out over 3 years from the date of the distribution.
• Unemployment benefits – A Pandemic Unemployment Assistance program is available to workers not traditionally covered by unemployment, such as self-employed individuals and independent contractors. Also, part of the relief plan is expanded unemployment compensation benefits to workers who have experienced a reduction of work hours or who have been laid off.

These are only a few of the highlights in the Coronavirus Aid, Relief and Economic Security (CARES) Act. In the coming days, we will be publishing more in-depth and comprehensive information related to the provisions of the economic relief plan. Please look for our emails containing the latest updates. For more information or any questions, you may also call one of our three locations.

Providing quality service even during challenging times is a priority for us at TRP Sumner. Be Well!