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.
Small Business Administration (“SBA”) Loan Programs
Economic Injury Disaster Loan (“EIDL”) Program
Funding for EIDL loans is still available and the SBA continues to accept loan applications from qualified small businesses, agricultural businesses and non-profit organizations.
The Consolidated Appropriations Act, 2021 signed into law on December 27, 2020 (the “CAA”) appropriated an additional $20 billion for EIDL funding and provides for a new EIDL grant program targeted to small businesses located in low-income communities that have suffered an economic loss of greater 30%. Eligible entities that did not receive the full $10,000 grant previously may request the remaining amount. Except for the targeted grant program created under the CAA, funding for the grants under the EIDL program has been depleted and such non-repayable grants are generally no longer available. The CAA also made certain changes and clarifications regarding the interaction of the EIDL and PPP program and the tax treatment of EIDL amounts.
- SBA website description of EIDL Loan and Grant and FAQs.
- EIDL Loan Application for qualified small businesses, non-profits and agricultural businesses.
- This advisory firm’s summary of the EIDL program updates under the CAA provides a useful overview of the new provisions.
Paycheck Protection Program (“PPP” Loans)
The Paycheck Protection Program initially launched under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), and the temporary program has been renewed and expanded under the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the “Economic Aid Act”) signed into law on December 27, 2020. Under the Economic Aid Act, eligible entities have another opportunity to apply for “first draw” loans, and certain entities that already received PPP loans may apply for a “second draw” PPP loan. In addition to previously receiving and using a first draw PPP loan, the eligibility for a second draw PPP loan also requires the borrower to have no more than 300 employees and be able to demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.
- SBA website description of the Paycheck Protection Program and top-line overviews of first draw loans and second draw loans.
- Interim Final Rules on first draw loans and second draw loans.
- Additional Interim Final Rules revising earlier rules to, among other things, allow individuals to calculate maximum loan amounts using gross income and remove certain eligibility restrictions.
- Application forms for first draw loans and second draw loans.
- FAQs on PPP loan forgiveness (last updated prior to the Economic Aid Act).
- A helpful overview of PPP second draw loans by Forbes.
- From February 24, 2021 through March 9, 2021, the SBA will offer PPP loans exclusively to businesses with fewer than 20 employees and sole proprietors. President Biden announced additional program changes to make access to PPP loans more equitable.
Grants for Shuttered Venue Operators
The CAA appropriated $15 billion for Shuttered Venue Operator Grants (SVOG) to be made by the SBA. Eligible persons/organizations meeting a number of requirements may apply for grants to pay qualifying expenses. Eligible entities and individuals include (i) a live venue operator or promoter, (ii) a theatrical producer, (iii) a live performing arts organization operator, (iv) a “relevant” museum operator, (v) a motion picture theater operator, and (vi) a talent representative. The amount of an SVOG is generally determined as a portion of the eligible person’s/entity’s revenue during 2019, capped at $10 million. SVOGs will be disbursed under priority guidelines with higher priority grants allocated to grantees with the greatest revenue loss. The American Rescue Plan Act enacted on March 11, 2021 appropriated an additional $1.25 billion to the SVOG program.
- This National Law Review article provides a more detailed summary of the SVOG Program
- The SBA website SVOG information, including tutorial videos about the SVOG Program
- Sign-up page for the SBA’s SVOG Application Informational Webinar on March 30, 2021 from 2:30 pm to 4:30 pm (EDT)
- SBA FAQs regarding the SOS Grant Program
- The SVOG application portal is slated to open April 8, 2021 and potential applicants can sign up on the portal website to be notified when the application process is available
Other Business Relief Resources
- The Federal Reserve’s Main Street Lending Program terminated on January 8, 2021. The below entries are retained for information purposes:
- Federal Reserve website information on the Main Street Lending Program – Including 4-year loans ($500,000 minimum) with one-year deferred interest and principal payments for qualifying borrowers. Loans are originated at local banks. Interested applicants should contact and apply through their local lenders.
- The Main Street Lending Program webpage of the Federal Reserve Bank of Boston has more specific information and resources with respect to the loans available under the Main Street Lending Program, including a general program overview, FAQs, and applicable forms and agreements.
- Effective October 30, 2020, the Federal Reserve Board adjusted the terms of the Main Street Lending Program to better target support to small businesses and non-profits. Among other terms, the minimum loan size has been reduced to $100,000 (formerly $250,000). The Federal Reserve announcement includes links to revised term sheets and FAQs.
- covidcap.com – A searchable website launched by CASE and CASEi3 at Duke University’s Fuqua School of Business to help any entrepreneur in the world, for-profit or nonprofit, struggling due to the economic impacts of COVID19, locate cash relief resources in their community.
- North Carolina COVID-19 Rapid Recovery Loan Program – The application deadline for the program was October 15, 2020. The NC Rapid Recovery Loan Program announced on September 15 that the program has expanded its services to reach more NC businesses in need of loans. Qualifying business criteria have been expanded, the loan cap has been increased to $250,000 (originally $50,000), no payments are required and interest accrues at 0.25% for the first 18 months of the loan, and the repayment period has been extended to 8½ years (from 5 years).
- RETOOLNC Grant Program – The RETOOLNC Grant application portal has been closed but may be reactivated if funds become available after assessment of all submitted applications. As of December 24, 2020, nearly $7 million in grants had been disbursed. On October 1, 2020, Governor Cooper announced a new grant program launched by the NC Department of Administration to provide $12 million in grants to minority and women-owned businesses impacted by COVID-19. Certified HUB (Historically Underutilized Businesses) and DBE (Disadvantaged Business Enterprise) firms with 50 or fewer employees and annual revenue not exceeding $1.5 million (per 2019 tax filings) can apply for a grant online beginning Monday, October 5th. The base grant amount is $10,000 (larger grants may be made depending on operating expenses) and applications will be reviewed in the order received until funds are exhausted.
- The Guilford CARES Small Business Assistance Grant Program is offering one-time grants of up to $10,000 to qualifying small businesses impacted by the COVID-19 pandemic due to Stay At Home Orders. The Guilford CARES grant program application period is now closed.
- IRS FAQs regarding the CARES Act Relief Fund provide that a business receiving a state or local government grant funded from the CARES Act Relief Fund generally cannot exclude the grant from gross income.
- NC Triad Lights-On COVID Recovery Loan Program – This program, sponsored by the Piedmont Triad Regional Development Council, offers interest-free, 5-year non-forgivable loans (from $2,500 to $50,000) to small and mid-sized businesses in the NC Triad area whose revenue has been impacted by the COVID-19 pandemic. Applications can be submitted through a streamlined, online process.
- The North Carolina Department of Administration maintains and updates a Summary of COVID-19 Funding & Resources for Small Business Owners listing various federal, state and local programs.
Certain Tax-Related and Employee Leave Measures
Tax Filing and Payment Extensions, E-Signatures on Certain Forms
- On March 17, 2021, the IRS announced that federal 2020 individual income tax return filing and tax payment deadlines will be automatically extended from April 15, 2021 to May 17, 2021. On March 18, the NC Department of Revenue announced that the date for filing 2020 NC individual income tax returns will be automatically extended until May 17, 2021. Although NC tax payments made by May 17 will not incur any penalty, interest on any NC income tax due will accrue interest unless state law is changed.
- Schell Bray posting on Tax Filing and Payment Extensions for 2019 including links to IRS and NCDOR notices. The July 15, 2020 extended filing and payment due date for 2019 returns has passed.
- IRS FAQs on Filing and Payment Deadlines
- The IRS approved the temporary use of e-signatures for certain forms through December 31, 2020. The IRS subsequently added more approved forms and extended the period until June 30, 2021.
Emergency Sick Leave and Family/Medical Leave
- Schell Bray posting on the Families First Coronavirus Response Act (FFCRA)– Emergency Paid Sick Leave, Emergency Family and Medical Leave Expansion and Related Tax Credits.
- The leave requirements of the FFCRA expired on December 31, 2021. However, the CAA extends the refundable payroll tax credits for paid sick and family leave under the FFCRA through the end of March 2021 to employers who voluntarily provide such leave through March 31, 2021.
Employee Retention Tax Credit and Deferral of Employment Tax Payments
- IRS Explanation of the Employee Retention Tax Credit – A refundable tax credit of up to $5,000 per employee with respect to wages paid after March 12, 2020 and before January 1, 2021 by an eligible employer whose business has been financially impacted by COVID-19.
- The CAA extends the Employee Retention Tax Credit until July 1, 2021 and expands the credit. EY has published a Tax News Update summarizing the modifications to the Employee Retention Tax Credit and certain other credits.
- IRS Guidance on the Employee Retention Tax Credit including clarification regarding the retroactive repeal of rule initially making the credit unavailable to borrowers under the PPP loan program.
Other Tax Provisions of the Coronavirus Aid, Relief and Economic Security (CARES) Act and the Consolidated Appropriations Act, 2021 (CAA)
Temporary Above the Line Charitable Contribution Deduction and Relaxation of Limitations
- A posting on the North Carolina Center for Nonprofits website includes a brief description of the $300 charitable deduction allowable under the CARES Act to non-itemizers in 2020 and the relaxation of the 60% and 10% income limitations on charitable contribution deductions for individuals and corporations, respectively.
- The CAA extends the deduction through 2021, doubles the deduction for married filers to $600 and carries over the relaxation of the 60% and 10% income limitations.
- Under the CAA, business meals from a restaurant will be 100% deductible for 2021 and 2022 (rather than 50% deductible as otherwise required).
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. The IRS provided additional relief in Notice 2021-10.