COVID-19 Resource Page – Business and Tax Responsive Measures

We know a good thing when we see it! Although Schell Bray has posted some great summaries and discussions of certain business and tax measures taken in response to COVID-19, there are a lot of other helpful resources out there. We are posting this COVID-19 Resource Page to share links to some useful sources of additional information and details about certain of the COVID-19 business and tax related measures. Schell Bray is pleased to provide important resources on business and tax measures to help you and your business through COVID-19. Information changes rapidly, so please check these resources regularly for news and updates.

General Resources

Bloomberg Tax has taken down its paywall to provide access to all its tax and legal coronavirus coverage. Bloomberg Tax has made an extensive collection of news, summaries, webinars and roadmap tools available. Coverage extends beyond federal tax, and includes state tax, other legal matters, and Small Business Administration programs.

The US Chamber of Commerce website has numerous guides, toolkits and other resources helpful to businesses.

Small Business Administration (“SBA”) Loan Programs

The original funding for the EIDL and PPP programs lapsed of April 16 and the SBA stopped accepting applications under either program. On April 24, legislation was enacted to add $310 billion to the programs. Of the $310 billion, $250 billion replenishes the PPP program with $60 billion of this amount slated for community banks and Community Development Financial Institutions. The SBA resumed accepting PPP applications on April 27. $60 billion of the $310 billion is to replenish the EIDL program. After replenishment, the SBA was initially accepting new EIDL applications only for agricultural businesses. As of June 15, the SBA is accepting new EIDL applications for loans and grants to both qualified small businesses and US agricultural businesses. This resource page will be updated for future developments under the SBA programs.

The PPP loan program shut down on June 30, 2020. However, the Senate (on June 30) and the House of Representatives (on July 1) unanimously passed legislation to extend the PPP application deadline until August 8, 2020. It is expected that President Trump will sign the measure over the July 4th weekend. The PPP loan program had approximately $130 billion of unallocated funds remaining when it shut down on June 30.

Economic Injury Disaster Loan (“EIDL”) Program

  • SBA website description of EIDL Loan and Grant.
  • EIDL Loan and Grant Application – The SBA changed the EIDL application on March 30 and now uses a streamlined application that allows an applicant to apply for both an EIDL loan and an EIDL grant in one application. EIDL loans do not have a forgiveness component, but EIDL grants do not require repayment. Applications are submitted online and no third party lender is involved in this process. Applicants that applied before March 30 and have not received a loan number are encouraged to re-apply using the new streamlined application.
  • EIDL Loan and Grant Application for qualified small businesses and agricultural businesses.

Paycheck Protection Program (“PPP” Loans)

  • On June 5, the Paycheck Protection Program Flexibility Act of 2020 (the “Flexibility Act”) was signed into law. The Flexibility Act relaxes certain requirements relating to the use of forgivable PPP funds including (i) an extension of the period during which PPP loan proceeds may be used to pay eligible expenses from 8 weeks to 24 weeks (or until December 31, 2020, if earlier), and (ii) a reduction in the percentage of the borrowed funds that must be used for payroll expenses from 75% to 60%. The Flexibility Act also relaxed the requirements with respect to restoring full time equivalent employees, permits PPP loans that are not forgiven to be repaid over 5 years rather than 2 years, and allows PPP borrowers to continue to take advantage of payroll tax deferrals even after the PPP loan is forgiven. This ADP posting summarizes key aspects of the Flexibility Act. Only certain of the SBA resources listed below have been updated to reflect changes made by the Flexibility Act.
  • SBA website information regarding eligibility, loan details and forgiveness.
  • PPP Borrower Application Form – Paycheck Protection Program loans are available only through third party lenders. Applicants cannot submit these applications directly to the SBA. The application form should be submitted to the applicant’s primary bank for approval and submission to the SBA. The Borrower Application Form has been updated to reflect the Flexibility Act. As originally enacted, the last day on which a lender could obtain an SBA loan number for a PPP loan was June 30, 2020. This deadline will be extended to August 8, 2020 once the legislation passed by Congress extending the date is signed into law by the president.
  • SBA FAQs for Lenders and Borrowers under the PPP – Link to downloadable .pdf of FAQs to be updated on a regular basis by the SBA and Department of the Treasury
  • SBA PPP Loan Forgiveness Application – A PPP borrower must apply for forgiveness of its PPP loan by completing this application as directed in the provided instructions, and submitting it to the Lender. Borrowers may also complete this application electronically through their Lender.
  • Certification safe harbor for loans under $2 million – PPP borrowers were required to certify that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” In the above FAQs (#31), the SBA reminded borrowers to consider whether the certification had been made in good faith and provided that any borrower who repaid the PPP loan by May 7, 2020 (extended to May 14 by FAQ 43, and then to May 18 by FAQ 47) would be considered to have made the certification in good faith. On May 13, the SBA issued FAQ 46 stating that any borrower that received a PPP loan with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith. All PPP loans in excess of $2 million will be reviewed, and if the SBA determines that there was not adequate basis for the certification, no enforcement action will be taken against the borrower if the loan is repaid after receiving notification from the SBA.
  • SBA Guidance on How to Calculate PPP Loan Amount by Business Type
  • SBA Interim Final Rule giving lenders and applicants additional guidance regarding the PPP program. Revisions to first interim final rule to conform key provisions to the Flexibility Act.
  • Schell Bray PPP Informational Zoom Conference with Erica Parker, Senior Vice President at Pinnacle Financial Partners.
  • Schell Bray PPP Follow-up Informational Zoom Conference with Erica Parker, Senior Vice President at Pinnacle Financial Partners.
  • U.S. Chamber of Commerce Small Business Guide and Checklist offering a concise explanation of the PPP loan program for small businesses.
  • The CARES Act provides that borrowers do not have taxable income with respect to the portion of the PPP loan that is forgiven. However the IRS has clarified that the borrower cannot take an income tax deduction for qualified expenses paid with forgiven loan proceeds (e.g., wages, rent, utilities and mortgage interest).

Other Business Relief Resources

Certain Tax-Related and Employee Leave Measures

Tax Filing and Payment Extensions

Emergency Sick Leave and Family/Medical Leave

Employee Retention Tax Credit and Deferral of Employment Tax Payments

Other Tax Provisions of the Coronavirus Aid, Relief and Economic Security (CARES) Act

  • Economic Impact Payments – The IRS’s Economic Impact Payment Information Center provides details about eligibility and the payment process for payments of refundable tax credits of up to $1,200 for individual filers and $2,400 for married couples filing jointly, and the additional $500 for each qualifying child. These credits are phased out for taxpayers with adjusted gross income over $75,000/$150,000 and eliminated for taxpayers who made more than $99,000 (individuals) and $198,000 (married filing jointly). Forbes has created a calculator to help individuals estimate the amount of their payments.
  • Waiver of 10% Early Withdrawal Penalty and Required Minimum Distributions and Increase of Loan Amounts from Retirement Accounts and PlansThe Reformed Broker, the blog of financial advisor and “FinTwit” personality Josh Brown, has an accessible Q&A format post discussing the provisions of the CARES Act permitting affected individuals to withdraw up to $100,000 from a qualified retirement account without incurring the 10% early withdrawal penalty, waiver of RMDs and the higher loan amount ($100,000) from qualified plans. The IRS has published FAQs on coronavirus-related relief for retirement plans and IRAs implemented under the CARES Act.
  • Temporary $300 Above the Line Charitable Contribution Deduction and Relaxation of LimitationsA posting on the North Carolina Center for Nonprofits website includes a brief description of the $300 charitable deduction allowable to non-itemizers in 2020 and the relaxation of the 60% and 10% income limitations on charitable contribution deductions for individuals and corporations, respectively.
  • Changes to the Net Operating Loss and Business Interest Expense Deduction Limitations Enacted by the TCJAPWC has published a detailed advisory about the CARES Act provisions permitting businesses to carryback certain NOLs for 5 years, eliminating the 80% taxable income limit on NOLs, and temporarily increasing the Section 163(j) limitation on business interest expense deduction from 30% to 50%. The IRS has published guidance on claiming the NOL relief offered under the CARES Act and a “do-over” of prior elections out of the Section 163(j) limitation.

Other COVID-19 Related Tax Relief

  • In response to the COVID-19 pandemic, Notice 2020-39 provides relief to Qualified Opportunity Funds and their investors with respect to certain requirements, including a 2 year extension of the period during which businesses financed by a Qualified Opportunity Fund may expend cash and an extension of the 180-day period during which certain investors may invest qualified capital gains.
  • IRS FAQs for nonresident individuals and certain non-US businesses with employees impacted by COVID-19 emergency travel disruptions. Tax relief under which 60 consecutive calendar days (beginning between February 1 and April 1) of presence and/or activities in the US will be disregarded for purposes of determining certain US income tax consequences. Additional details relating to certain individual taxpayers set forth in Revenue Procedure 2020-20 (individuals and the substantial presence test for residency) and Revenue Procedure 2020-27 (waiver of certain requirements for the foreign earned income exclusion).

Helping Employees and Workers