CARES Act and PPP
CARES Act and The Paycheck Protection Program for Small BusinessesOn Friday, March 27, President Trump signed the Coronavirus Aid, Relief and Economic Security (CARES) Act into law. It designated $350 billion to help small businesses keep their employees working. The Paycheck Protection Program was created under the CARES Act to provide federally guaranteed loans to help small businesses maintain payroll and pay certain other expenses. The loans offered through this program are up to 100 percent forgivable if the business maintains payroll.Business owners will be able to apply for these loans at any lending institution that is approved to participate in the program through the existing U.S. Small Business Administration (SBA) 7(a) lending program and additional lenders approved by the U.S. Department of the Treasury. The SBA has many well-established lending partners including many community banks.
The Small Business Administration (SBA), in consultation with the Department of the Treasury, intends to provide timely additional guidance to address borrower and lender questions concerning the implementation of the Paycheck Protection Program (PPP), established by section1102 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act or the Act). This document will be updated on a regular basis.
Borrowers and lenders may rely on the guidance provided in this document as SBA’s interpretation of the CARES Act and of the Paycheck Protection Program Interim Final Rule.
Find PPP program details and other SBA coronavirus relief programs at www.sba.gov/coronavirus.
Recently, the Treasury Department issued more details on the paycheck protection program and made a loan application available for download. Visit the Treasury's website to download this application pdf.
The Paycheck Protection Program prioritizes millions of Americans employed by small businesses by authorizing up to $349 billion toward job retention and certain other expenses.
Small businesses and eligible nonprofit organizations, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards.
- For a top-line overview of the program CLICK HERE
- If you’re a lender, more information can be found HERE
- If you’re a borrower, more information can be found HERE
- The application for borrowers can be found HERE
For more information, visit the U.S. Treasury Department website.
Guide to Employee Retention Tax Credit
Download the U.S. Chamber's guide to the Employee Retention Tax Credit.
Who is eligible?
Private employers, including non-profits, carrying on a trade or business in 2020 that:
- Have operations partially or fully suspended as a result of orders from a governmental authority due to COVID-19, or
- Experience a decline in gross receipts by more than 50% in a quarter compared to the same quarter in 2019 (eligibility ends when gross receipts in a quarter exceed 80% compared to the same 2019 quarter)
With respect to tax-exempt organizations under 501(c) of the tax code, the requirement to be partially or fully suspended applies to all operations of the organization.
Employers who receive a Paycheck Protection Program (PPP) loan are not eligible for a tax credit. To learn more about PPP loans, visit uschamber.com/sbloans.
How much is the tax credit?
This new employee retention tax credit is a 50% tax credit for the first $10,000 of compensation, including the employer portion of health benefits, for each eligible employee.
- Compensation does not include paid sick or family leave for which the employer is reimbursed under the Families First Coronavirus Response Act
- The credit only applies to wages paid after March 12, 2020 and before January 1, 2021
Which employees count toward eligibility?
- For employers with more than 100 employees: Full-time employees who are (i) being paid but (ii) not providing service due to either a full or partial shutdown or a reduction in gross receipts count toward eligibility
- For employers with 100 or fewer full-time employees: All employees, regardless of whether those employees are providing service, count toward eligibility
- Employers may not claim the same employee for this credit and the Work Opportunity Tax Credit for the same period. In addition, employers may not claim the same wages for an employee under this credit and also under the employer credit in section 45S for FMLA
How is the credit paid?
The refundable credit is applied against the employer portion of payroll taxes. The Treasury Department will develop a process for employers to receive an advance payment of the tax credit.
The Internal Revenue Service will issue further guidance and mange the ERTC process. Please contact the IRS with specific questions.
Guide to Paid Leave Programs
Download the U.S. Chamber's employers guide to Paid Leave Programs.