Support for Businesses and Non-Profit Organizations



The Senate has put together this guide to help small business owners, non-profits and other employers better understand the major programs and initiatives in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

 

What other support is there for small businesses?

Refundable tax credits are available for private-sector employers that are required to offer coronavirus-related paid leave to employees. The IRS will be posting information soon on these credits on its website (www.irs.gov), including information on how to obtain advance payment of these credits.

An employee retention tax credit is available for struggling businesses that are not eligible or choose not to participate in the new SBA Paycheck Protection Program. Any business that has been forced to fully or partially suspend operations, or that has seen a significant drop in revenue is eligible for a 50-percent credit for wages paid to furloughed or reduced-hour employees. For businesses with 100 employees or less, the credit is based on all wages paid, regardless of whether an employee is furloughed. There is an overall limit on wages per employee of $10,000. The credit can be claimed against the businesses’ quarterly payroll tax liability and is fully refundable to the extent of the excess. There will also be options to receive advance payments. Small business owners should watch for information at www.irs.gov and talk to their payroll service provider, as applicable. 

 

What type of assistance will independent contractors be eligible for?

Refundable tax credits are available for independent contractors who would have qualified for coronavirus-related paid leave if they were employees. The IRS will be posting information soon on these credits on its website www.irs.gov, including information on how to claim these credits.

50 percent of certain self-employment taxes are deferred through the end of 2020. Deferred taxes will not become due until the end of 2021 and end of 2022, with 50% of the liability being paid at each date.

 

What other assistance is there for non-profits?

Certain tax-exempt organizations that have been forced to fully or partially suspend operations, or that have seen a significant drop in revenue are eligible for a 50 percent credit for wages paid to furloughed or reduced-hour employees. Organizations that participate in the SBA Paycheck Protection Loan Program are not eligible for the credit. For organizations with 100 employees or less, the credit is based on all wages paid, regardless of whether an employee is furloughed. There is an overall limit on wages per employee of $10,000. The credit can be claimed against the organization’s quarterly payroll tax liability and if fully refundable to the extent of the excess. There will also be options to receive advance payments.