What every small retailer needs to know about the Cares act passed by the us senate on march 25, 2020

A coronavirus bill was passed by the Senate on Wednesday.  The House has not yet passed the bill so some of these summary statements could change.  Your can read the full bill HERE. A summary of important points in included below, compliments of CRA vendor partner Genesis Marketing.


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Division A, Sec. 1102.7(a) LOAN PROGRAM--Small Business Interruption Loans
Businesses with fewer than 500 employees will obtain Small Business Administration  (SBA) loans through their local lender guaranteed by the federal government up to four times their monthly costs for payroll, mortgage or rent payments, utilities and "other debt obligations" in place before March 1, 2020.
Loan payments on these loans will be deferred for up to one full year. Lenders will have "delegated authority [from the SBA] to make and approve loans based on an evaluation of eligibility of the borrower [that may] only consider whether the borrower (i) was in operation on March 1, 2020; and (ii) had employees for whom the borrower paid salaries and payroll taxes."

Division A, Sec. 1105. LOAN FORGIVENESS
There may be possible loan forgiveness--An eligible recipient shall be eligible for forgiveness of indebtedness on a covered 7(a) loan in an amount equal to the cost of maintaining payroll continuity during the covered period. You will need to discuss this with your local lender during the loan process.

Division B, Title I, Section 2101--Rebates and Other Individual Provisions
Eligible individuals will receive advance payments on credits against their 2020 income tax filings equal to the lesser of their 2020 federal income tax liability or $1,200 for a single ($2,400 for joint return filers). Even if their actual tax ends up being less than the initial advance that they receive at this time, at least $600 will be granted ($1,200 for joint return filers). In other words, a partial repayment may be required if the advance is too much. In addition, $500 will be added to the advance payments for each dependent listed on taxpayers' 2018 Form 1040 tax returns. Single individuals with adjusted gross income greater than $75,000 ($150,000) for joint return filers) will receive smaller advance payments.

Division B, Title I, Section 2103--Delay of Estimated Tax Payments for Individuals
Installment tax payments for 2020 estimated taxes, typically due before October 15, 2020, are postponed without penalty until that date.

Division B, Title I, Section 2103--Special Rules for Use of Retirement Funds
Individuals will be permitted to receive "coronavirus-related distributions" from their retirement funds (up to $100,000) without incurring the 10% early distribution penalty. Coronavirus-related distributions are authorized for individuals diagnosed with COVID-19, their spouse or dependents, and others "who experience financial consequences as a result of being quarantined, being furloughed or laid off or having hours reduced, [and] being unable to work due to lack of child care," plus "other factors as determined by the Secretary of the Treasury." The distributions will be reportable as taxable income, but may be spread over three years.

Division B, Title II, Section 2201--Delay of Estimated Tax Payments for Corporations
Installment tax payments for 2020 estimated corporate taxes, typically due before October 15, 2020, are postponed without penalty until that date.

Division B, Title II, Section 2202--Delay of Payment of Employer Payroll Taxes
With respect to the employers' share of the FICA tax (7.65% of gross wages) due for the period starting with the signing of the law through December 31, 2020, payment may be deferred until December 31, 2021 (for at least the first 50% of the amount deferred), and December 31, 2022, for any remaining balance. For self-employed individuals who pay the full 15.3% SECA tax, 7.65% (50% of that amount) may be similarly deferred.

This summary was provided as a service to the clients of Genesis Marketing Group, LLC, based on the information contained in the above link available March 26, 2020. We are strictly providing this as a courtesy; we are not, nor do we claim to be tax or legal professionals, so therefore this is for informational purposes only, We recommend that you contact your tax professional and local bank to see if you qualify and how you can take advantage of this information.