The Economic Injury Disaster Loan (EIDL) program provides low-interest disaster loans of up to $2 million for small businesses. Small businesses are defined as businesses with 500 employees or less, or businesses that are considered small under Small Business Administration (SBA) Size Standards. These loans have a maximum 30-year repayment term. Click here to see if your business is eligible to apply for an EIDL.
The Paycheck Protection Program is designed to help small businesses keep employees on their payrolls. The Paycheck Protection Program allows SBA-approved lenders to provide forgivable loans of up to $10 million for small businesses and not-for-profit organizations affected by the pandemic. These loans are guaranteed 100 percent by the SBA. Approved lenders can begin processing applications today, and the program will be available until June 30, 2020. Click here to see if your business is eligible, find approved lenders, and apply for a loan.
The CARES Act also includes the following provisions:
- Creates the Employer Retention Tax Credit that is 50 percent of up to $10,000 in wages paid by an eligible business which has been impacted by the COVID-19 pandemic (this credit is not available to businesses who have received a Small Business Interruption Loan);
- Carrybacks for net operating loss that can offset income for the tax years 2018 to 2020;
- Deferment of payment for the employer portion of payroll taxes until the end of 2020, with the payment of the first half of the deferred amount due on December 31, 2021, and the second half on December 31, 2022;
- Allows taxpayers who are subject to interest limitation rules to deduct business interest expense for up to 50 percent of adjusted taxable income (ATI) for the 2018 and 2019 tax years (this provision does not include partnerships, which are still limited to 30 percent of ATI);
- Provides advance refunding of credits to offset the amount an employer has paid to employees in emergency sick paid leave, family and medical leave as required by the Families First Coronavirus Response Act.