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Covid-19 Information

CARES Act Changes for Businesses and Individuals


Payment Protection Program (PPP) Loans

The program would provide cash-flow assistance through 100 percent federally guaranteed loans to employers who maintain their payroll during this emergency. If employers maintain their payroll, the loans would be forgiven, which would help workers remain employed, as well as help affected small businesses and our economy to snap-back quicker after the crisis. PPP has a host of attractive features, such as forgiveness of up to 8 weeks of payroll based on employee retention and salary levels, no SBA fees and at least six months of deferral with maximum deferrals of up to a year. Small businesses and other eligible entities will be able to apply if they were harmed by COVID-19 between February 15, 2020 and June 30, 2020. This program is retroactive to February 15, 2020, in order to help bring workers who may have already been laid off back onto payrolls. Loans are available through June 30, 2020.

How much can I get?

  • Depending on your business’s situation, the loan size will be calculated in different ways.
    • Maximum loan is $10 million
    • 4% Interest rate
    • 10-year term
    • $0 loan fees, $0 prepayments

How do I apply for a PPP Loan?

  • Ask your banker/lender
    • All current SBA 7(a) lenders are eligible lenders for PPP. The Department of Treasury will also be in charge of authorizing new lenders, including non-bank lenders, to help meet the needs of small business owners. 

How is forgiveness calculated?

  • Forgiveness on a covered loan is equal to the sum of the costs listed below incurred during the covered 8-week period compared to the previous year or time period, proportionate to maintaining employees and wages
    • Payroll costs plus
    • Plus Interest on any covered mortgage obligation (not including any prepayment or payment of principal on a covered mortgage obligation)
    • Plus any payment on any covered rent obligation
    • Plus and any covered utility payment.  

How do I apply for forgiveness of the PPP loan?

  • Apply through your banker/lender. You will need:
    • Documentation verifying the number of employees on payroll and pay rates, including IRS payroll tax filings and State income, payroll and unemployment insurance filings 
    • Documentation verifying payments on covered mortgage obligations, lease obligations, and utilities.
    • Certification that the documentation provided is true and that the amount that is being forgiven was used in accordance with the program’s guidelines for use. 

What happens if any of the loan is not forgiven?

  • Any loan amounts not forgiven at the end of one year is carried forward as an ongoing loan with max terms of 10 years, at 4% max interest. Principal and interest will continue to be deferred, for a total of 6 months to a year after disbursement of the loan. The clock does not start again. 


In addition to the Payment Protection Program, the CARES act has also made some changes to the Economic Injury Disaster Loan which can be applied for on its own or in addition to the Payment Protection Program.


Economic Injury Disaster Loan – (EIDL)


  • Small businesses with generally:
    • Less than 500 employees
    • Less than $35 million in revenue


  • Maximum loan: $2 million
  • Advance up to $10,000 available within 3 days – see Economic Injury Disaster Loan below
  • 3.75% interest, up to 30 years
  • Used for financial obligations and operating expenses that could have been met had the disaster not occurred
  • Collateral: UCC lien against business assets
  • Personal Guarantee required for loans greater than $200,000 from 20% + owners and/or managing members of LLCs

Apply directly through the SBA: Apply Here

Must provide:
  • IRS form 4506T – tax transcript: Here
  • Personal financial statement: Here
  • Schedule of Liabilities: Here

May be requested after application:

  • Most recent Business tax return
  • Most recent Federal income tax return for principals, general partners or managing member and affiliates
  • Monthly sales figures:  Here
  • P&L, Balance Sheet


Economic Injury Disaster Loan Advance/Grant

  • Must first apply for SBA Economic Injury Disaster Loan (EIDL)
  • Apply for Loan Advance within three days of applying for Economic Injury Disaster loan*
    • *If you have already applied for an EIDL you can still apply for the grant, new EIDL loans seeking the grant should apply within 3 days of applying for the EIDL
  • Emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19
  • Upon successful application, funds made available within three days
  • $10,000 loan advance will not have to be repaid
  • If you apply for the an EIDL and receive the $10,000 advance but the EIDL is denied you will not have to repay the advance
  • If also applying for the Paycheck Protection Program (PPP), the EIDL grant will be subtracted from the amount from the paycheck protection loan that is forgivable

Employee retention credit for employers

  • Refundable payroll tax credit for up to 50% of qualifying wages paid

  • Eligible Employers
    • Fully or partially suspended as a result of government orders limiting commerce, travel, or group meetings, or:
    • Employers who have experienced a greater than 50% reduction in quarterly receipts, measured on a year-over year basis
    • The credit is not available to employers receiving Small Business Interruption Loans under Sec. 1102 of the Act

  • Eligible Employees
    • If employer had an average number of full-time employees in 2019 of 100 or fewer, all employee wages are eligible
    • For larger employers only the wages of employees who are furloughed or face reduced hours as a result of their employers’ closure or reduced gross receipts are eligible for the credit

  • Qualifying Wages
    • Wages included health benefits and is capped at the first $10,000 in wages paid by the employer to an eligible employee
    • Wages do not include amounts taken into account for purposes of the payroll credits, for required paid sick leave or required paid family leave in the Families First Coronavirus Act (part of P.L. 116-127) (Act Sec. 2301(c)(3)(A)), nor for wages taken into account for the Code Sec. 45S employer credit for paid family and medical leave. (Act Sec. 2301(h)(2))
    • The Credit applies to wages paid after 3/12/20 and before 1/1/21


Delay of payment of employer payroll taxes

Individual Recovery Rebate

Retirement plan changes

Unemployment Changes


The information contained herein is general in nature and based on authorities that are subject to change. NW Accounting Professionals, LLC guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. NW Accounting Professionals, LLC assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations.

  • Allows taxpayers to defer paying employer portion of social security taxes through the end of 2020
    • 50% of the deferred tax will be due 12/31/21
    • 50% of the deferred tax will be due 12/31/22
    • The above rules won't apply to any taxpayer which has had indebtedness forgiven under Act Sec. 1106 with respect to a loan under Small Business Act Sec. 7(a)(36), as added by Act Sec. 1102, or indebtedness forgiven under Act Sec. 1109. (Act Sec. 2302(a)(3))

  • An eligible individual is allowed an income tax credit for 2020 equal to the sum of: (1) $1,200 ($2,400 for eligible individuals filing a joint return) plus (2) $500 for each qualifying child of the taxpayer
  • The amount of the credit is reduced (but not below zero) by 5% of the taxpayer's adjusted gross income (AGI) in excess of: (1) $150,000 for a joint return, (2) $112,500 for a head of household, and (3) $75,000 for all other taxpayers.
  • Advanced payment of Credit
  • Eligibility for advanced payment of the credit will be based on the 2019 tax return. If your 2019 tax return has not been filed, it will be based the 2018 tax return.
    • If you are ineligible for the credit based on your 2018 or 2019 tax return but are eligible when the 2020 tax return is filed, you will receive the refundable credit on your 2020 tax return.
  • 10% early withdrawal penalty does not apply to up to $100,000 of Coronavirus-related distributions
    • A coronavirus-related distribution is any distribution made on or after January 1, 2020, and before December 31, 2020, from an eligible retirement plan (defined in Code Sec. 402(c)(8)(B)), made to a qualified individual.
    • Qualified Individual is an individual who is:
      • who is diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 (COVID-19) by a test approved by the Centers for Disease Control and Prevention (CDC)
      • whose spouse or dependent (as defined in Code Sec. 152) is diagnosed with such virus or disease by such a test, or
      • who experiences adverse financial consequences as a result of being quarantined, being furloughed or laid off or having work hours reduced due to such virus or disease, being unable to work due to lack of child care due to such virus or disease, closing or reducing hours of a business owned or operated by the individual due to such virus or disease, or other factors as determined by the Secretary of the Treasury.
    • Amounts distributed under this provision can be paid back to the account within 3 years and be exempted from tax by qualifying as a rollover
    • Alternatively, the tax on distributions can be spread over the 3 years
  • Required Minimum Distribution waived for 2020
    • If you are subject to required minimum distributions, you are not required to take them in 2020.