In the turbulent wake of the COVID-19 disaster, and make no mistake it is a natural disaster as real as hurricane, earthquake or tornado, the federal government, together with state and local governments, has enacted a variety of measures that are available to help small businesses weather the storm. The problem is, the federal legislation alone consists of 880 pages, with references and overlaps with Internal Revenue, Small Business Association and Banking Codes.
Benefits available to small to mid-size companies
The federal package provides a mix of benefits for small to mid-size companies with 500 employees or fewer. Qualifying businesses have access to federally guaranteed loans of up to $1,000,000 that can be used to maintain payroll and ordinary business expenses like rent, utilities, mortgage payments or interest on debts, even if businesses are temporarily closed. When it comes to payroll security, the legislation covers salary, sick leave, severance, health benefits, and state and local payroll-related taxes. These loans are non-recourse, require no collateral and best of all, under specified circumstances, the debt will be forgiven in full. Think about what an additional million dollars can do to help you keep your small business afloat.
Additional industry-specific benefits are also available. For instance, revisions to the IRS Code provide substantial new benefits to real estate businesses. Under the existing tax code, depreciation losses will only shelter the first $500,000 of a married couple’s nonbusiness income, such as capital gains from investments. The result is that people can enjoy big tax breaks stemming from only-on-paper losses, even if they enjoy big cash profits in the real world. The new stimulus bill lifts the $500,000 restriction for three years — this year, and two retroactive years — a boon for couples with more than $500,000 in annual capital gains or income from sources other than their business.
If you have questions, please contact us
Now is not the time to try and navigate the breakers alone. The attorneys at Scarinci Hollenbeck are thoroughly familiar with every aspect of the new legislation and are ready to stand by your side to make sure your small business achieves the maximum potential benefits available. If you have any questions or if you would like to discuss the matter further, please contact me, Don Pepe, or a member of Scarinci Hollenbeck's at 201-896-4100.