Congress authorizes $2.2 trillion economic aid packageRoss Martin
In the wake of global economic downturn resulting from COVID-19, Congress has passed and the President has signed a $2.2 trillion economic aid package to forestall further devastation to the American economy. The legislation is called the Coronavirus Aid, Relief, and Economic Security Act, or CARES.
Under the legislation, businesses with fewer than 500 employees that were in operation on February 15th are eligible to receive up to $10 million in federally-backed financing for operational costs like payroll, healthcare, insurance, rent/mortgage, utilities, and debt obligations. Repayment of such funds shall be deferred, with significant portions eligible for complete forgiveness.
Additionally, the legislation implements a number of tax benefits intended to minimize the harm that may result from retaining employees and continuing to operate in these uncertain times. These measures include suspension of certain penalties, payroll tax deferral, tax credit for retaining employees, and liberalized net operating loss carryback rules.
Further, small businesses that have suffered a substantial economic injury (unable to meet obligation and pay ordinary and necessary operating expenses) are eligible to receive up to $2 million in need-based financing under the Small Business Association’s Disaster Loan Assistance Program.
For the benefit of American workers, Congress has also passed the Families First Coronavirus Response Act, or FFCRA. Under the FFCRA, businesses with fewer than 500 employees are required to provide 2 weeks of emergency paid sick leave to all full-time workers. Further, workers who have been employed for 30 days or more are entitled to 12 weeks paid leave to provide care for a family member due to illness or school closure. Employers are entitled to have these costs reimbursed by the federal government.
The entire country has been declared a disaster area due to the COVID-19 outbreak. Thus, if you operate a business with fewer than 500 employees, these new pieces of legislation are likely to affect you. Graves Garrett is a trusted advisor in navigating complex federal laws and regulations and we encourage you to contact us in assessing the impact on you or your business and in maximizing available relief.