Brown Brothers Harriman (BBH) continues to monitor changes to legislation and program rules as they come out. The details discussed in this article are accurate as of April 5, 2020.
Business owners are anxiously awaiting the final details of the $2 trillion stimulus package. Though the stimulus is expected to offer several benefits to small businesses, there are a number of opportunities available to business owners right now:
- Disaster Assistance Loans for Businesses: Between January 1, 2020, and December 31, 2020, the U.S. Small Business Administration (SBA) is offering Economic Injury Disaster Loans (EIDL) of up to $2 million to businesses suffering economic injury as a result of COVID-19. Loans carry interest rates of 3.75% and a term as long as 30 years. These loans are made directly by the SBA.
- Families First Coronavirus Response Act (FFCRA): Private employers with fewer than 500 employees (including part-time employees, but not independent contractors) are required to provide their employees with paid sick leave or expanded family and medical leave for reasons related to COVID-19.1 These companies are eligible for dollar-for-dollar reimbursement of wages paid to employees for paid sick leave, as well as family and medical leave (including caring for a child) in the form of payroll tax credits.
- Deferred Federal Income Tax: Corporate taxpayers who file and pay 2019 federal income taxes on April 15 or who pay estimated taxes on April 15, regardless of the amount owed, will have their deadlines automatically extended until July 15, 2020. We recommend contacting your tax advisor to discuss further.2
- State-Level Tax Deferrals and Loan Assistance Funds: Many states have provided tax relief, including extensions on filing as well as extensions on paying taxes, and history suggests more states will follow suit. Similarly, several states have established supplementary funds to support their local economy. We recommend consulting your state’s website for further information and discussing state-specific options with your tax advisor.
Many clients have asked for additional information on the SBA’s disaster assistance loans and the FFCRA to understand if and how these might apply to them. As follows is additional background on these opportunities.