The CARES Act is a two trillion dollar stimulus bill. The bill was passed by the Senate last night and awaits passage by the House. If you're interested in how a bill passes and have some free time here is a blast from the past.
We are advising clients to consult with an employment attorney for specific questions as they are specialists. Our goal is to relay information to you as we receive it. We are not attorneys and this is not legal advice for your business.
The bill is extensive and more details will be coming out in the next few days. Because the bill has not yet been finalized, changes to the bill could occur. Below is a brief summary of what is currently in the bill and how it affects small businesses:
The bill provides increased funding for your state’s unemployment benefits and additional funding for businesses to help sustain operations during this crisis.
Emergency unemployment compensation will be increasing by as much as $600 per week. Great news for any of your staff members who will be on unemployment.
There are a number of SBA Loans available to businesses. A frequent question we are receiving is about loan forgiveness. It appears portions of the SBA loans would be forgivable for amounts paid for staff payroll, sick leave, family leave and other overhead expenses between Feb 15th and June 6, 2020.
This bill allows for a withdrawal from your retirement funds up to $100,000 in 2020 without paying a penalty. We do not recommend this option unless it is a last resort.
Businesses can defer payments of their employer share of Social Security until December 31, 2020. This is a portion of the payroll tax you pay as an employer on your and your staff’s wages.
There is a one-time federal income tax rebate for individuals in 2020. The rebate would be $1,200 for individuals and $2,400 for married couples, but would be reduced for individuals making more than $75,000 and married couples making more than $150,000. In addition, a rebate of $500 is available for each child.
If you are interested in a more detailed overview of the bill, here is a helpful podcast by the Wall Street Journal.
Unemployment Question Update
A common question we are receiving regarding the bill that passed last week (Families First Coronavirus Response Act) is if businesses would be responsible for the sick leave and family leave if the staff is already on unemployment. Based on a webinar we attended this week by a large law firm, they believe the answer is no, businesses would not be responsible for the additional benefits for employees on unemployment. You would be responsible for these benefits once staff become re-employed.