Below are some high-level bullet points about the legislation that was signed on Friday. Much of the bill is geared towards helping employers keep their employees working. As such, a few of the credits are related to payroll taxes, and we’d advise you to work with your payroll provider to make sure you get credit if you keep employees on. Also, the SBA has opened up a paycheck protection program to provide loans specifically for purposes of payroll, rent, utilities (all the expenses to keep the business running). As long as you use the proceeds of the loan for those costs, the loan will become forgivable (it essentially becomes a government grant to make your payroll). To learn more about these loans, please these information prepared by the U.S. Chamber of Commerce.
Key Provisions for Individuals, Businesses and Other Employers
Individuals
- Recovery rebates of up to $1,200 for singles, $1,200 for heads of households and $2,400 for married couples filing jointly — plus $500 per qualifying child — subject to income-based phaseouts starting at $75,000, $122,500 and $150,000, respectively
- Expansion of unemployment benefits, including for self-employed and gig-economy workers
- Waiver of the 10% penalty on COVID-19-related early distributions from IRAs, 401(k)s and certain other retirement plans
- Waiver of required minimum distribution rules for IRAs, 401(k)s and certain other retirement plans
- Expansion of charitable contribution tax deductions
- Exclusion for certain employer payments of student loans
Businesses and Other Employers
- Retention tax credit for eligible employers that continue to pay employee wages while their operations are fully or partially suspended as a result of certain COVID-19-related government orders
- Deferral of the employer portion of payments of certain payroll taxes
- Modification of net operating loss (NOL) and limitation on losses rules
- Modification of the deduction limitation on business interest
- Qualified improvement property technical correction, allowing qualifying interior improvements of buildings to be immediately expensed rather than depreciated over 15 years
- Expansion of the ways the Small Business Administration (SBA) can help small businesses