SENATE PASSES MASSIVE BAILOUT FOR INDIVIDUALS AND BUSINESSES
This week, the Senate passed the CARES Act, which provides widespread economic relief due to the economic destruction caused by the COVID-19 outbreak. The main provisions of the bill are listed below:
- One-time rebate checks equal to $1,200 per adult and $500 per child for those with adjusted gross income (AGI) below $75,000 (single) and $150,000 (joint). AGI is based on their last filed income tax returns. Those who did not file in 2018 or 2019, should consider filing one or both years immediately, even if they have no income.
- $500 billion in a fund to help distressed businesses, cities and states. Includes $50 billion for passenger airlines, $8 billion for cargo airlines, $17 billion for firms deemed important for national security, and $425 billion for other businesses, cities and states.
- $570 billion in small business relief, including deferment of payroll taxes, a 5-year carryback for net operating losses, tax credits for retaining employees during the shut-down, “forgivable loans” for spending on payroll, rent and utilities, and other business tax breaks.
- Individual tax breaks including waiver of the 10% penalty for early withdrawal of up to $100,000 in retirement funds for COVID-related purposes, waiver of the minimum required distribution from IRAs and retirement plans for 2020, and enhanced charitable contribution deductions.
- More details to come as this moves through Congress and on to President Trump’s desk for signature.
Our Key Takeaway: This is one of the first small business-friendly measures in a very long time. All businesses, including nonprofits, should pay close attention to the benefits available. You may learn about these changes long before your payroll service provider does and need to be proactive in seeing that your payroll taxes are appropriately deferred. You should also quickly determine whether your estimated tax payments can be reduced under the Cares Act, and take other measures to fully avail yourself of the relief to which you are entitled. Please do not hesitate to email or call us if you have any specific questions.