Many of you have likely heard of, or become familiar with yet another new piece of legislation related to COVID-19 – The CARES Act. This law was signed by President Trump on Friday, March 27, 2020.
It is important to understand the provisions of this Act as well as the Families First Coronavirus Response Act (FFCRA) before making decisions related to payroll costs and staffing. Some businesses may benefit more from the CARES Act and others may see greater benefit from the FFCRA.
The CARES Act is aimed at providing relief for businesses that have been negatively impacted by the coronavirus outbreak. Some of the key measures for businesses include:
- Small Business Loans – $350 billion is being dedicated to preventing layoffs and business closures. Companies with less than 500 employees can receive assistance in the form of a loan that may be forgiven if the employer maintains payroll (Payroll Protection Program).
- Unemployment – The program provides $250 billion for extended unemployment insurance. It offers workers an additional $600 per week for four months on top of what state programs pay.
- Payroll taxes – Allows deferral of the employer share of 2020 federal payroll taxes until 2021 and 2022.
Most provisions are an either/or proposition and no “double-dipping” is permitted. Please contact your CPA, banker or other advisor to learn more about the Paycheck Protection Program (PPP).
Small Business Guide and Checklist