On Friday March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act (CARES) act into law which among other things, infused $349 billion of loan funds to the SBA. Additionally, there are some major changes to tax law which we have outlined below.
SBA Loan Program
These new SBA loan amounts are generally limited to approximately 2.5 months of payroll/ operating expenses. The SBA loans may be conditionally forgiven provided they are used for payroll and other specific operating costs of a business.
You can apply for these loans by going to www.sba.gov/disaster.
Our trusted colleagues at Whitman Breed Abbott Morgan have written an excellent analysis regarding these SBA loans. Click here for their analysis
Tax Updates
Our tax research and update partner Thomson Reuters has provided great insight regarding the many relevant tax updates associated with the CARES Act which we are passing along.
Relevant individual tax updates include the below and can be found here:
- $1,200 stimulus rebate
- Waiver of 10% penalty on early IRA withdrawals due to COVID-19
- RMD requirement waived for 2020
- $300 above the line deduction for charitable giving
Relevant business tax updates include the below can be found here:
- Employee retention tax credit
- Delay of ‘employer side’ payroll tax deposits
- 5 year net operating loss carryback
- Interest expense income limitation increased
- Technical correction of 15-year qualified improvement property
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