WASHINGTON, D.C. (WKBW) — Congressman Brian Higgins is looking to connect small business owners with resources to help them weather the storm created by the COVID-19 pandemic.
On Wednesday, Rep. Higgins' office released the following information regarding the Coronavirus Aid, Relief, and Economy Security (CARES) Act.
Paycheck Protection Program
The CARES Act included $350 billion in financial assistance called the Paycheck Protection Program, which acts as a bridge for businesses that retain employees and their salaries.
Who is eligible for the Paycheck Protection Program?
Small Business, 501(c)(3) non-profit organizations, 501(c)(19) veterans organizations, tribal businesses, sole proprietors, independent contractors, self-employed individuals.
What are the terms of the program?
Zero-fee loans of up to $10 million. The loan will be eligible for forgiveness for expenses of up to 8 weeks of average payroll and related costs if the organization retains employees and their salary levels.
Further guidance on the Paycheck Protection Program from the Treasury Department is available at: https://home.treasury.gov/system/files/136/PPP--Fact-Sheet.pdf [home.treasury.gov]
Economic Injury Disaster Loans & Emergency Economic Injury Grants
The CARES Act included $10 billion for Economic Injury Disaster Loans (EIDL) and Emergency Economic Injury Grants, programs for small businesses that experienced significant economic injury and are located in a declared disaster area, which includes the entire state of New York.
Who is eligible for an Economic Injury Disaster Loan?
The following entities with 500 or fewer employees: small businesses, sole proprietorships (with or without employees), independent contractors, cooperatives and employee owned businesses, tribal small businesses, small business concerns and small agricultural cooperatives that meet the applicable size standard for SBA, as well as most private non-profits of any size.
What is the difference between an Economic Injury Disaster Loan and an Emergency Economic Grant?
An Economic Injury Disaster Loan (EIDL) is a 30-year loan of up to $2 million with an interest rate up to 3.75% for businesses and 2.75% for non-profits to help pay for disaster-related expenses. An Emergency Economic Injury Grant is an immediate advance of up to $10,000 received within 3 days of applying for an EIDL that does not need to be repaid, even if the business fails to qualify for the EIDL.
Can my business qualify for both programs?
Business may qualify for both the Paycheck Protection Program and Economic Injury Disaster Loans/Grants. However, they must be used for different purposes, and any advance amount received under the Emergency Economic Injury Grant Program would be subtracted from the amount forgiven in the Paycheck Protection Program.
Local Small Business Development Centers can provide Western New York businesses with additional guidance. For Erie County visit: https://sbdc.buffalostate.edu/ [sbdc.buffalostate.edu] or call: 716-878-4030. In Niagara County go to: http://niagarasbdc.org [niagarasbdc.org] or call 716-210-2515.
Employee Retention Tax Credit
The CARES Act created an Employee Retention Tax Credit, a refundable payroll tax credit for 50 percent of wages paid by eligible employers to certain employees during the COVID-19 crisis.
Who is eligible for the Employee Retention Tax Credit?
Employers, including non-profits, whose operations have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings. The credit is also provided to employers who have experienced a greater than 50 percent reduction in quarterly receipts, measured on a year-over-year basis. The credit is not available to employers receiving assistance through the Paycheck Protection Program. The credit is provided through December 31, 2020.
Which wages are eligible to apply to the credit?
Wages of employees who are furloughed or face reduced hours as a result of their employer’s closure or economic hardship. For employers with 100 or fewer fulltime employees, all employee wages are eligible, regardless of whether an employee is furloughed. The credit is provided for wages and compensation, including health benefits, and is provided for the first $10,000 in wages and compensation paid by the employer to an eligible employee. Wages do not include those taken into account for purposes of the payroll credits for required paid sick leave or required paid family leave, nor for wages taken into account for the employer credit for paid family and medical leave.
Additional information on the Employee Retention Tax Credit will be available at: www.irs.gov/coronavirus [irs.gov].