The Covid-19 Economic Relief Package was approved on Monday, March 30th. This unprecedented $2 trillion dollar stimulus package may be incredibly beneficial for our clients, especially business owners. Here are some of the more significant points you should know:
- Single-households that earn $75,000 or less a year (as per their latest tax return) will be supplied with a one-time payment of $1,200.
- Couples who earn $150,000 annually will receive a one-time payment of $2,400 with an additional $500 per child within that household.
- These benefits are capped around the $99,000 income level and tapper between $75,000 and $100,000.
Small business protection and aid is a major component of the stimulus package. The key points include:
- Businesses and nonprofits with 500 or fewer employees are generally eligible for assistance. Further, self-employed workers and gig workers also qualify. Qualified borrowers must have been in business before February 15, and must have paid employee salaries and payroll taxes or contractors.
- The program is meant to ensure that businesses have the funds to pay their employees and to prevent layoffs. Loans offered through the program are forgivable, if used for their intended purpose: As long as a business receiving a loan maintains the average size of its workforce, it will only need to pay back the interest accrued, and the principal will effectively become a grant.
- Businesses can receive loans up to $10 million at up to 4% interest rates, depending on how much they paid their employees between January 1 and February 29.
- Loans are provided through banks, credit unions, and other lenders, and are guaranteed by the Small Business Administration. Loan applications should be submitted through lenders who are partnered with the Small Business Administration.
Link to the 2020 Stimulus bill: https://www.documentcloud.org/documents/6819206-CARES-ACT-FINAL-TEXT.html