HIGH FIVE FOR YOUR 2020 BUSINESS TAXES—New Laws Bring Relief

Renner Business News; January 18, 2021–Joan M. Renner, CPA, CGMA

To address devastating losses from the COVID-19 pandemic, new laws will bring businesses some relief on their 2020 federal tax returns. The CARES Act has loosened limits on deducting 2020 business interest and net operating losses, and the Consolidated Appropriations Act of 2021 (CAA) has clarified favorable tax treatment for PPP forgiveness.

Here’s a rundown of five high points you may see on your 2020 tax return.

  1. Your PPP will not be taxed. The CARES Act created forgivable loans to small employers under the Paycheck Protection Program (PPP) to pay payroll and other specific costs. Section 1106(i) of the CARES Act provides that any PPP loan forgiveness shall be excluded from gross income.
  2. Expenses paid by PPP will be deductible. Initially, the IRS announced that no deduction would be allowed for otherwise deductible expenses to the extent they were used to obtain PPP forgiveness. Disallowing these deductions could leave a business owing a boatload of tax with no cash left to pay it.
    Fortunately, the CAA clarified Congress’ intent that expenses qualifying for PPP forgiveness are deductible. The CAA says “no deduction shall be denied or reduced, no tax attribute shall be reduced, and no basis increase shall be denied by reason of the exclusion from gross income” of a PPP loan effective for taxable years ending after March 27, 2020.
  3. NOLs can be carried back for a refund. A Net Operating Loss (NOL) arises when business deductions for the year are more than business income for the year. NOLs arising in 2020 can be carried back five years and used to offset prior year income to get a refund of taxes previously paid. Previously, NOLs arising after 2017 could only be carried forward. The CARES Act opens up not only 2020 losses, but also 2019 and 2018 losses, for this five-year carryback, providing much-needed cash to businesses that paid taxes in previous years.
    The CARES Act also allows more loss to be applied to each year. Previously, not only were NOLs arising in 2018, 2019 and 2020 limited to being carried forward, when you did get to apply them in a future year, you could only offset up to 80% of taxable income. The CARES Act removed the 80% limit on the amount of income that can be offset by an NOL for 2018, 2019 and 2020. Now, the NOL deduction for 2018, 2019 and 2020 can offset up to 100% of income. The 80% limit comes back in 2021.
  4. NOLs created in 2020 can be carried forward. Previously, unused Net Operating Losses expired if not used to offset future income within 20 years. The CARES Act eliminated the 20-year expiration for NOL carryovers. Now, unused losses can be carried forward indefinitely, until they can be used to offset future income.
  5. More business interest can be deducted. Previously, a business’ deduction for business interest was generally limited to 30% of adjusted taxable income plus business interest income plus floor plan interest. Any business interest expense above that was not deductible on the current year return, but could be carried forward to future years without any expiration. The CARES Act temporarily raises the limit on how much business interest can be deducted in one year, allowing businesses to deduct business interest up to 50% of adjusted taxable income for 2019 and 2020.

Note:  Your state may not conform to these tax benefits.

You may not see the above federal tax benefits on your state tax return if you operate in Virginia, Florida, California and other states that only adopt federal changes as of a specific date, or not at all.  You will only see these tax benefits on your state tax return to the extent your state adopts the federal tax law changes. The effect on your tax return in these states may be significant.

If you operate in the District of Columbia, Maryland, New York, Pennsylvania and other states that adopt federal tax law changes as they occur, your state will probably adopt the tax benefits discussed above. No guarantees. The Comptroller of Maryland is allowed to decide not to conform to new tax law changes if the effect on the state budget would be more than $5 million.

To determine whether your state will adopt the above federal tax benefits, it’s vital that you consult your tax advisor about the rules in your state. Official guidance may take some time.

There are many more details related to the high points discussed in this article. 

There are also many more details contained in the new legislation. New federal tax guidance will be provided by the Secretary of the Treasury. This information is intended to be a summary of the basics and is not a substitute for individual advice. For specific information about how these provisions apply to you, contact your finance professional.

More about COVID-19-related relief for small employers:

The Consolidated Appropriations Act of 2021 (CAA) allows hard-hit small businesses a second PPP draw.

New Act Extends Emergency Leave Credit for Employers—Including Self-Employed.

©2021 Renner and Company, CPA, P.C. All Rights Reserved.

Empty Nonprofit Daycare hit hard by Covid 19

New Law Allows PPP Second Draw for Hard-Hit Charities

Renner Nonprofit News; January 13, 2021—Joan M. Renner, CPA, CGMA

The Consolidated Appropriations Act of 2021 (CAA) includes a number of provisions to help small employers affected by the pandemic. One of the biggest features is the expansion of the Paycheck Protection Program (PPP) originally created by the CARES Act.  The new law extends the time to apply, provides for a second PPP loan for hard-hit small organizations and adds more entities to the list of eligible organizations, including organizations exempt under Section 501(c)(6).

Who qualifies for a second PPP?

The new law offers a second PPP loan of up to $2 million for certain hard-hit entities. Borrowers that previously received a PPP loan can receive one “PPP Second Draw Loan” if the entity:

  • Is a business, nonprofit, veterans’ organization or self-employed individual, now including certain 501(c)(6) organizations, destination marketing organizations, housing cooperatives and news organizations,
  • Has 300 or fewer employees,
  • Has used, or will use, the full amount of the prior PPP loan before the expected date of the disbursement of the second PPP,
  • Has had at least a 25% reduction in gross receipts in any quarter of 2020 compared to the same quarter of 2019,
  • Is not primarily engaged in political or lobbying activities,
  • Did not receive a grant under the Shuttered Venue Operator Grant program,
  • Is not ineligible for SBA loans in general under 13 CFR 120.110, and
  • Has no board member that is a resident of the People’s Republic of China.

Organizations must have been in operation on Feb. 1, 2020 to receive a PPP loan as well as a second draw.

Churches and religious organizations are not excluded.

The new law affirms the sense of Congress that organizations principally engaged in teaching, instructing, counseling or indoctrinating religion or religious beliefs should not be considered ineligible for initial and second draw PPP loans.

Nonprofits should use the organization’s gross receipts to calculate their reduction in revenue.

How much can businesses receive?

The loan amount is still 2½ times the average monthly payroll costs paid or incurred. Now, the borrower can calculate using either 2019 payroll or payroll in the 12-month period leading up to the date of the loan, which is basically 2020.

Seasonal employers can base their loan amount on payroll costs for any 12-week period between Feb. 15, 2019, and Feb. 15, 2020, for loans made on or after Dec. 27, 2020. Your organization qualifies as a seasonal employer if you either 1) operate for seven months or less during any calendar year, or 2) during the preceding calendar year, you had a slow six-month period during which your gross receipts were one-third or less than the other six-month period.

How will the loan be forgiven?

The loan will be forgiven if the borrower spends the proceeds on eligible costs during the forgiveness period. Eligible costs include payroll costs such as wages, retirement contributions and health insurance, and non-payroll costs for rent, mortgage interest and utilities. At least 60% of the expenditures qualifying for loan forgiveness still must be payroll costs.

The new law clarifies that eligible payroll costs include other types of group insurance such as group life, disability, vision and dental insurance. Wage limitations contained in the CARES Act continue.

The new law also clarifies that eligible non-payroll costs include software, cloud computing services and certain costs to protect workers from COVID-19. Non-payroll costs now include the cost of essential or perishable goods ordered before or during the covered period.

The expanded forgivable expenses may be used by any borrower whose PPP loan has not been forgiven by Dec. 27, 2020.

Is PPP forgiveness reduced by an EIDL advance?

No, an Economic Industry Disaster Loan (EIDL) advance does not reduce PPP forgiveness. The new law made this retroactive.  Borrowers are to be made whole if their loan forgiveness was previously reduced by the amount of their EIDL advance.

What period of time is used to calculate costs for forgiveness?

Borrowers may select any PPP forgiveness period between 8 to 24 weeks, beginning on the date the loan proceeds are disbursed. After the end of the selected forgiveness period, the borrower must apply to the lender for forgiveness.

Forgiveness will still be reduced if the borrower has cut hourly wages by more than 25% or if the borrower has reduced the number of full-time equivalent employees. Safe harbors for these will continue.

What is the deadline for applying?

The new law extends the period for making PPP loans through March 31, 2021. Contact your bank to discuss its timeline for accepting PPP loan applications.

There are many details contained in the new legislation. New guidance will be provided by the Secretary of the Treasury and the SBA. This information is intended to be a summary of the basics and is not a substitute for individual advice. For specific information about how these provisions apply to you, contact your finance professional.

Questions about your PPP?  Contact us for assistance.

©2021 Renner and Company, CPA, P.C. All Rights Reserved.

Man Applying for PPP Second Draw

New Law Allows PPP Second Draw for Hard-Hit Small Businesses

Renner Business News; January 13, 2021—Joan M. Renner, CPA, CGMA

The Consolidated Appropriations Act of 2021 (CAA) includes a number of provisions to help small employers affected by the pandemic. One of the biggest features is the expansion of the Paycheck Protection Program (PPP) originally created by the CARES Act.   The new law extends the time to apply, provides for a second PPP loan for hard-hit small businesses and adds more entities to the list of eligible organizations.

Who qualifies for a second PPP?

The new law offers a second PPP loan of up to $2 million for certain hard-hit small businesses.  Borrowers that previously received a PPP loan can receive one “PPP Second Draw Loan” if the entity:

  • Is a business, nonprofit or self-employed individual,
  • Has 300 or fewer employees,
  • Has used, or will use, the full amount of the prior PPP loan before the expected date of the disbursement of the second PPP,
  • Has had at least a 25% reduction in gross receipts in any quarter of 2020 compared to the same quarter of 2019,
  • Is not primarily engaged in political or lobbying activities,
  • Did not receive a grant under the Shuttered Venue Operator Grant program,
  • Is not ineligible for SBA loans in general under 13 CFR 120.110, and
  • Is not owned 20% or more by an entity formed or operating in the People’s Republic of China and has no board member that is a resident of the People’s Republic of China.

Businesses must have been in operation on Feb. 1, 2020 to receive a PPP loan as well as a second draw. The new law excludes publicly traded companies.

How much can businesses receive?

The loan amount is still 2½ times the average monthly payroll costs paid or incurred. Now, the borrower can calculate using either 2019 payroll or payroll in the 12-month period leading up to the date of the loan, which is basically 2020. Accommodation and food service businesses assigned to NAICS code 72 can use 3½ times average monthly payroll costs.

Seasonal businesses can base their loan amount on payroll costs for any 12-week period between Feb. 15, 2019, and Feb. 15, 2020, for loans made on or after Dec. 27, 2020.

How will the loan be forgiven?

The loan will be forgiven if the borrower spends the proceeds on eligible costs during the forgiveness period. Eligible costs include payroll costs such as wages, retirement contributions and health insurance, and non-payroll costs for rent, mortgage interest and utilities. At least 60% of the expenditures qualifying for loan forgiveness still must be payroll costs.

The new law clarifies that eligible payroll costs include other types of group insurance such as group life, disability, vision and dental insurance. Wage limitations contained in the CARES Act continue.

The new law also clarifies that eligible non-payroll costs include software, cloud computing services and certain costs to protect workers from COVID-19.  Non-payroll costs now include the cost of essential or perishable goods ordered before or during the covered period.

The expanded forgivable expenses may be used by any borrower whose PPP loan has not been forgiven by Dec. 27, 2020.

Is PPP forgiveness reduced by an EIDL advance?

No, an Economic Industry Disaster Loan (EIDL) advance does not reduce PPP forgiveness. The new law made this retroactive.  Borrowers are to be made whole if their loan forgiveness was previously reduced by the amount of their EIDL advance.

What period of time is used to calculate costs for forgiveness?

Borrowers may select any PPP forgiveness period between 8 to 24 weeks, beginning on the date the loan proceeds are disbursed. After the end of the selected forgiveness period, the borrower must apply to the lender for forgiveness.

Forgiveness will still be reduced if the borrower has cut hourly wages by more than 25% or if the borrower has reduced the number of full-time equivalent employees. Safe harbors for these will continue.

What is the deadline for applying?

The new law extends the period for making PPP loans through March 31, 2021. Contact your bank to discuss its timeline for accepting PPP loan applications.

There are many details contained in the new legislation. New guidance will be provided by the Secretary of the Treasury and the SBA. This information is intended to be a summary of the basics and is not a substitute for individual advice. For specific information about how these provisions apply to you, contact your finance professional.

Questions about your PPP?  Contact us for assistance.

©2021 Renner and Company, CPA, P.C. All Rights Reserved.

New Law Expands PPP to Many Associations

Renner Nonprofit News; January 12, 2021—Joan M. Renner, CPA, CGMA

The Consolidated Appropriations Act of 2021 (CAA) includes a number of provisions to help small employers affected by the pandemic. One of the biggest features is the expansion of the Paycheck Protection Program (PPP) originally created by the CARES Act.   The new law extends the time to apply, provides for a second PPP loan for hard-hit small businesses and nonprofits and finally adds more entities to the list of eligible organizations, including associations.

Organizations exempt under Section 501(c)(6) of the Internal Revenue Code are now eligible if they pass a few limitations. For a 501(c)(6) organization to be eligible for a PPP loan, the organization must:

  • Have fewer than 300 employees,
  • Not be a professional sports league,
  • Not have the purpose of participating in a political campaign or conducting other political activity,
  • Not receive more than 15% of its receipts from lobbying activities,
  • Not engage in lobbying activities comprising more than 15% of the total activities of the organization, and
  • Not have spent more than $1 million on lobbying activities during the most recent tax year that ended prior to Feb. 15, 2020.

None of the proceeds may be used for federal, state or local lobbying wages or other lobbying expenses.

The SBA will issue a new loan application form that will shed more light on the SBA’s requirements.

The loan amount is 2½ times the average monthly payroll costs paid or incurred, either in 2019, or in the year before the date of the loan.

The loan will be forgiven if the borrower spends the proceeds on eligible costs during the forgiveness period. Eligible costs include payroll, health insurance, rent, interest and utilities. The new law clarifies that eligible costs also include other types of group insurance such as group life, disability, vision and dental insurance. Eligible costs also include software, cloud computing services and certain costs to protect workers from COVID-19.

At least 60% of the expenditures qualifying for loan forgiveness must be payroll costs.

Borrowers may select any forgiveness period between 8 to 24 weeks, beginning on the date the loan proceeds are disbursed. After the end of the selected forgiveness period, the borrower must apply to the lender for forgiveness.

The new law extends the period for making PPP loans through March 31, 2021. Contact your bank to discuss their timeline for accepting PPP loan applications.

There are many details contained in the new legislation. This information is intended to be a summary of the basics and is not a substitute for individual advice. For specific information about how these provisions apply to you, contact your finance professional.

©2021 Renner and Company, CPA, P.C. All Rights Reserved.

New Act Extends Emergency Leave Credit for Employers— Including Self-Employed

Renner Business News; January 11, 2021—Joan M. Renner, CPA, CGMA

The Consolidated Appropriations Act of 2021 (CAA) includes a number of provisions to help small employers affected by the pandemic. If you have had employees who were unable to work due to COVID-19 illness, quarantine or school closings, the Families First Coronavirus Response Act (FFCRA) funds up to 12 weeks of their emergency leave through refundable payroll tax credits.

Time Extended to Use Emergency Leave Credits

The new law extends the period of time for employers to take advantage of those payroll tax credits in the FFCRA. The credits were set to expire Dec. 31, 2020. The CAA now gives employers through March 31, 2021 to provide the emergency leave and use the credits.

FFCRA provided for sick pay for the first two weeks and then family leave for up to 10 additional weeks. Employees unable to work due to school closings were entitled to leave paid at two-thirds of their regular pay up to $200 per day. Employees unable to work due to COVID-19 illness or quarantine were entitled to full pay up to $511 per day for 10 days.

While the CAA extends the amount of time employers have to take the credit, it does not increase the amount of emergency leave provided under the FFCRA. Once a worker has used the two weeks of sick leave and 10 weeks of family leave originally provided for in the FFCRA, no additional credit is available for that employee.

The FFCRA applies to private employers, including nonprofits, with fewer than 500 employees and certain public employers.

Self-Employed Individuals Can Base Credit on 2019 Income

A self-employed individual unable to work due to school closing or illness related to COVID-19 can also get this credit against his or her 2020 self-employment tax. The amount of the credit is based on the individual’s average income per day. The CAA clarifies that a self-employed individual may elect to use his or her 2019 self-employment income to compute his or her average daily self-employment income.

For example, a self-employed person unable to work during 2020 due to school closing, can take a credit of two-thirds of his or her average daily 2019 income for up to the two weeks of emergency sick leave and the 10 weeks of emergency family leave provided by the FFCRA.

Emergency Leave Wages Can’t be Used for PPP

Remember that your emergency sick and family leave wages can not be used to calculate your PPP forgiveness. The same applies to the self-employed. Don’t take the credit using earnings that you used for your PPP forgiveness.

There are many details contained in the new legislation. This information is intended to be a summary of the basics and is not a substitute for individual advice. For specific information about how these provisions apply to you, contact your finance professional.

©2021 Renner and Company, CPA, P.C. All Rights Reserved.

New Act Extends Emergency Leave Credit for Employers— Including Nonprofits

Renner Nonprofit News; January 11, 2021—Joan M. Renner, CPA, CGMA

The Consolidated Appropriations Act of 2021 (CAA) includes a number of provisions to help small employers affected by the pandemic. If you have had employees who were unable to work due to COVID-19 illness, quarantine or school closings, the Families First Coronavirus Response Act (FFCRA) funds up to 12 weeks of their emergency leave through refundable payroll tax credits for small employers, including nonprofits.

Time Extended to Use Emergency Leave Credits

The new law extends the period of time for employers to take advantage of those payroll tax credits in the FFCRA. The credits were set to expire on Dec. 31, 2020. The CAA gives employers until March 31, 2021 to provide the emergency leave and use the credits.

FFCRA provided for sick pay for the first two weeks and then family leave for up to 10 additional weeks. Employees unable to work due to school closings were entitled to leave paid at two-thirds of their regular pay up to $200 per day. Employees unable to work due to COVID-19 illness or quarantine were entitled to full pay up to $511 per day for 10 days.

While the CAA extends the amount of time employers have to take the credit, it does not increase the amount of emergency leave provided under the FFCRA. Once a worker has used the two weeks of sick leave and 10 weeks of family leave originally provided for in the FFCRA, no additional credit is available for that employee.

The FFCRA applies to private employers, including nonprofits, with fewer than 500 employees and certain public employers.

Emergency Leave Wages Can’t be Used for PPP

Remember that your emergency sick and family leave wages can not be used to calculate your PPP forgiveness.

There are many details contained in the new legislation. This information is intended to be a summary of the basics and is not a substitute for individual advice. For specific information about how these provisions apply to you, contact your finance professional.

©2021 Renner and Company, CPA, P.C. All Rights Reserved.

Paycheck Protection Program – Self-employed Not Left Out

Renner Business News; April 27, 2020—Joan M. Renner, CPA, CGMA

A new COVID-19 relief package is expected to provide $310 billion additional Paycheck Protection Program (PPP) funding very soon to help small businesses and charities amid the COVID-19 crisis.

Organizations can use PPP loans to pay rent, payroll, utilities and existing mortgage interest. After eight weeks, they can request loan forgiveness.

Initial funding, provided by the CARES Act, ran out within 14 days, leaving many applicants out in the cold, including many self-employed individuals.

Initially, when small businesses and charities worked through their PPP loan applications, they found that they could not count their independent contractors as eligible payroll. Independent contractors would have to apply for their own PPP loans as self-employed individuals. Details were not as clear on how the self-employed should apply and on what basis their loans could later be forgiven.

Recently, the SBA issued a new interim final rule providing additional guidance to help self-employed individuals apply for the Paycheck Protection Program and understand the basis for loan forgiveness.

Self-employed individuals can obtain PPP funding based on their 2019 net income and use it for income replacement, employee payroll costs, rent, business mortgage interest and utilities.

Many applicants worry that that the $310 billion of new PPP funding may go as fast as the first round did. However, the new relief package sets aside $60 billion for lending by community banks, often the institutions working most closely with small organizations.

Now is a good time to review the PPP rules for the self-employed.

Self-employed individuals include:

  • Sole proprietors who operate their own business
  • Independent contractors who provide services to businesses and nonprofits and receive a Form 1099 instead of a W-2
  • Businesses operating as single-owner LLCs

As a self-employed individual, you are eligible for a PPP loan if you—

  • Were in business on Feb. 15, 2020,
  • Had self-employment income for 2019,
  • Resided principally in the United States, and
  • Filed (or will file) Schedule C of Form 1040 for 2019.

As a self-employed individual, you calculate your loan amount as follows:

  1. Get your 2019 tax return done, or at least your 2019 Schedule C.
  2. Start with Schedule C, Line 31; Net profit or (loss).
  3. If Line 31 is negative or zero, and you have no W-2 employees, you are not eligible for a PPP loan.
  4. If Line 31 is negative or zero and you have W-2 employees, start with zero.
  5. If Line 31 is more than $100,000, reduce it to $100,000.
  6. Now you have a number between zero and $100,000.
  7. If you have no employees, skip to Line 13.
  8. If you have employees, add their 2019 Medicare wages. Add any pretax health insurance or other fringes excluded from Medicare wages.
  9. Cap each employee’s wages at $100,000. Remove employees whose principal place of residence is outside the U.S.
  10. Add 2019 health insurance contributions you paid for your employees from Schedule C, Line 14.
  11. Add retirement contributions you made for your employees from Schedule C, Line 19.
  12. Add state unemployment taxes you paid during 2019.
  13. Now you have 2019 net profit plus eligible payroll. Divide by 12 to get an average monthly figure.
  14. Multiply the average monthly figure by 2.5. This is your PPP loan amount.
  15. If you have an outstanding 2020 Economic Injury Disaster Loan excluding any advance amount that does not have to be repaid, and you want to refinance into your PPP, add it to your PPP loan amount.

Be prepared to provide the following documents with your PPP application:

  • Your 2019 Schedule C
  • Any 1099-MISC you received to support your reported income
  • One of the invoices you sent to your customers, a bank statement or other books that show you are self-employed and were in business on or around Feb. 15, 2020
  • 941 forms if you have employees
  • Your February payroll journal or similar documentation to show you were operating on Feb. 15, 2020
  • State unemployment returns if you have employees
  • Documentation for your retirement plan contributions for your employees
  • Invoices for the health insurance payments you made for your employees

As a self-employed individual, you may apply for forgiveness of your PPP loan after eight weeks, calculated as follows:

  1. Calculate eight weeks of owner income replacement based on your 2019 Schedule C net income. Take your 2019 Schedule C, Line 31, divide by 52 weeks and multiply by 8 weeks.
  2. Add employee payroll, health and retirement benefits as calculated above, paid during the 8-week period following loan origination.
  3. Add rent, utilities and interest on existing business mortgages paid during the 8-week period following loan origination, to the extent they were deductible on your 2019 Schedule C.
  4. Seventy-five percent of the amount forgiven must be attributable to payroll and owner’s compensation replacement.

When applying for PPP loan forgiveness, be prepared to provide—

  • Your 2019 Schedule C,
  • Quarterly 941 and State unemployment tax forms for 2020, and
  • Evidence of rent, mortgage interest and utility payments.

Learn more about the Paycheck Protection Program.

The Bill also provides $60 billion additional funding for SBA Economic Injury Disaster Loans and Grants. 

Read a summary of The Cares Act.

There are many details about the PPP for self-employed individuals contained in CARES Act, the SBA Interim Final Rule, the new funding bill and other official releases. This information is intended to be a summary of the basic provisions and is not a substitute for individual advice. For specific information about how these provisions apply to you, contact your finance professional.

©2020 Renner and Company, CPA, P.C. All Rights Reserved.

THE EMPLOYEE RETENTION CREDIT— How to Claim It

Renner Business News; April 14, 2020—Joan M. Renner, CPA, CGMA

The IRS has provided guidance for employers who want to take advantage of the Employee Retention Credit.  Small businesses and nonprofits experiencing economic hardship related to the COVID-19 crisis can claim a refundable credit for half the amount of wages paid to employees from March 13 through Dec. 31, 2020.

How do you actually get this credit? For qualified wages paid to employees during the first quarter, from March 13 through March 31, 2020, compute your credit of 50% of qualified wages and claim it on your second quarter payroll tax return, Form 941. The IRS says don’t claim the credit on your first quarter Form 941.

Of course, you’ll also claim your credit for 50% of second quarter qualified wages, paid from April 1 through June 30, 2020, on your second quarter Form 941. Get any excess credit refunded using Form 7200.

If you take the credit, you don’t have to pay in the payroll tax deposits and wait for a refund. Employers can reduce payroll tax deposits by the amount of the credit earned.

Employers of up to 100 employees get the credit on all wages and health benefits paid up to $10,000 per employee. Employers with more than 100 employees only get the credit on wages paid to employees who aren’t working because of COVID-19 cutbacks.

This credit does not apply to wages paid under the emergency sick leave and family leave provisions of the Families First Coronavirus Response Act. Employers are already receiving a credit for those wages.

Employers already receiving support through the Paycheck Protection Program are not eligible.

Read more about the CARES Act Provisions to help small businesses and nonprofits

Read more details about the CARES Act.

©2020 Renner and Company, CPA, P.C. All Rights Reserved.

THE CARES ACT—Help for Small Businesses and Nonprofits Amid COVID-19

Renner Business News; April 4, 2020—Joan M. Renner, CPA, CGMA

The CARES Act is still very new and, in some ways, its application is still being worked out.  However, business owners and nonprofit leaders should gain familiarity with the CARES Act to determine which provisions can help them, including:

  • The Paycheck Protection Program,
  • Emergency Economic Injury Grants,
  • Economic Injury Disaster Loans,
  • Employee Retention Credits and the
  • SBA Debt Relief Program.

To help with that, here’s a summary of the CARES Act and how it can help small businesses and nonprofits amid COVID-19. Ultimately, additional guidance will be available from the SBA, the U.S. Treasury, the IRS and your bank. For specific information about how the CARES Act will affect you, consult your financial professional.

©2020 Renner and Company, CPA, P.C. All Rights Reserved.

PAYCHECK PROTECTION PROGRAM APPLICATIONS NOW AVAILABLE

Renner Business News; April 1, 2020

The Department of Treasury has released the Paycheck Protection Program application 

The Paycheck Protection Program offers small businesses and 501(c)(3) charities a loan to pay employee salaries under $100,000, health insurance, rent, utilities and loan interest for eight weeks. If used for these purposes, borrowers may apply for forgiveness of the loan.

The SBA is administering the program through approved borrowers.

Eligible borrowers should begin the application process today.

Paycheck Protection Program Application

Supplemental Information 

Borrower Guide

For details on how the Paycheck Protection Program will apply to you, contact your financial professional.

©2020 Renner and Company, CPA, P.C. All Rights Reserved