CARES Act Explained imaginetime empowers teams to manage work, share - - PowerPoint PPT Presentation
CARES Act Explained imaginetime empowers teams to manage work, share tasks, April 1st, 2020 track time & due dates, and generate insightful reports. Hosted By: Katie Thomas, CPA Live Webinar With | Special Guest Introduction Katie
imaginetime empowers teams to manage work, share tasks, track time & due dates, and generate insightful reports.
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advice or opinions.
financial, or tax advice in any particular circumstance or fact situation.
Amid an unprecedented public health and economic disaster, President Trump has signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law. The $2 trillion stimulus package provides much needed relief to small businesses as they navigate the extraordinary challenges resulting from the coronavirus pandemic.
Source: Estimates for third relief bill based on bill text, committee and administration numbers. Credit: Audrey Carlsen/NPR
The Economic Injury Disaster Loan (EIDL) program provides small businesses with working capital loans of up to $2 million to help overcome the temporary loss of revenue.
without employees, or as an independent contractor; or
Your business must be directly affected by COVID-19 to qualify.
These loans may be used to pay:
in order to keep payments affordable, up to a maximum of 30 years. Payment terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
however, applicants must have a credit history acceptable to SBA.
to $200,000 are not required.
excess of that amount.
within 3 days of applying for a disaster loan.
under the SBA Disaster Loan Program. If approved for a loan under the Paycheck Protection Program, this grant is deducted from the loan forgiveness amount.
application process.
application online is 2 hours and 10 minutes.
closing documents.
The Paycheck Protection Program provides federally-guaranteed loans up to a maximum amount of $10 million to eligible businesses, which can be partially forgivable.
Businesses and nonprofits that employ not more than the greater of:
size standard for the business’s primary North American Industry Classification System (NAICS) code. The applicant must not have received another SBA loan for the same purposes (i.e. no “double-dipping”).
the PPP loan, you can refinance the disaster loan with the PPP loan.
leave, and insurance premiums;
loan.
2.5x the average total monthly payroll costs during 2019.
The outstanding amount of a loan made under the SBA’s Disaster Loan Program between January 31, 2020, and the date
refinanced as part of this new program.
The lesser of $10,000,000
Not included:
borrower will be eligible for forgiveness and cancellation of indebtedness for up to the full principal amount of such loan.
The amount eligible for forgiveness is equal to the total costs spent during the covered period for qualified expenses such as:
leave, and insurance premiums;
period.
are rehired and/or wage reductions return to acceptable limits prior to June 30, 2020.
1. ABC Co. had $2.4 million of total payroll costs for 2019. ABC Co.’s average monthly payroll costs were thus $200,000. ABC Co. is eligible for a Paycheck Protection Loan equal to the lesser of: $500,000, or $10 million. 2. During the first 8 weeks after ABC Co. borrows $500,000, it incurs payroll costs, mortgage interest, and utilities of $450,000. The $450,000 is eligible for forgiveness, and the remaining $50,000 loan is deferred for at least six months and up to a year. 3. ABC Co. had 35 full-time employees during the 8-week period after it borrows $500,000. During the period February 15 – June 30, 2019, it had 50; just as it did from January 1, 2020 through February 29, 2020. The loan forgiveness of $450,000 must be reduced by 15/50 or 30% or $135,000.
The following documentation is required for loan forgiveness:
including IRS payroll tax filings and state income, payroll and unemployment insurance filings.
amount considered for forgiveness was used appropriately under Paycheck Protection Program guidelines.
approve PPP loans under Section 7(a).
with no loan fees or prepayment penalties.
financial institution. If they are not an SBA-approved lender, you can find
accepting applications from small businesses and specific nonprofit
individuals can apply.
Corporations
Property
and maintain salary during the rest of 2020.
and is done on a calendar quarter basis. It applies only to wages paid after March 12, 2020 and before January 1, 2021.
An employer who was carrying on a trade or business during 2020 and satisfies for ANY calendar quarter in 2020:
government authority limiting commerce, travel, or group meetings due to COVID-19.
OR
quarter in the prior year, and continuing until
in the prior year.
“Qualified wages” are dependent on the number of full-time employees:
services during a quarter in which you pass the furlough test or drop in receipts test.
during a quarter in which the furloughed test or any the “drop in receipts” test.
employee is $5,000 ($10,000 x 50%).
sick leave or qualified family leave under the Families First Coronavirus Response Act (FFCRA) and the employment provisions within the FFCRA.
been paid for working an equivalent duration during the last 30 days.
eligible for this credit.
payroll taxes through the end of 2020.
Employers that obtain Paycheck Protection Program (PPP) loans are not eligible for deferred payments.
amend or modify tax returns dating back to 2013.
tax years after December 31, 2021.
The limit has been increased from 30% to 50% of the taxpayer's adjusted taxable income for 2019 and 2020. For 2020, you can elect to use adjusted taxable income for 2019.
assign it a 15-year depreciable life, thereby preventing QIP from being treated as “qualified property” eligible for bonus depreciation.
QIP, thereby allowing it to be characterized as “qualified property” eligible for bonus depreciation. This correction is effective retroactively as if it had been included in the TCJA.
takes leave for reasons of quarantine, self-quarantine, or symptoms/diagnosis and at $200 per employee per day if the employee takes leave to care for a quarantined individual, for qualifying child care reasons, or to care for an employee’s own substantially similar condition.
the employer is required to pay for the applicable quarter. This credit is capped at $200 per employee per day, up to a maximum amount of $10,000 per employee.
“expedited advance”, but the process has not yet been established.
The CARES Act modifies FFCRA’s FMLA employee coverage rule by allowing employees who were laid off by an employer on or after March 1, 2020 to qualify for emergency paid FMLA leave if they are later rehired by the same employer. A rehired employee must have worked for the employer for at least 30 of the last 60 calendar days prior to layoff.