by Josh King, General Counsel, RealSelf
Last week, I wrote about things you can do to keep your practice running during this troubling time. Now, thanks to the passage of CARES Act—a $2 trillion coronavirus relief package—more resources are available. I wanted to briefly highlight the provisions that are focused on keeping America’s businesses going:
Small Business Loans
My earlier article mentioned SBA disaster loans, which offer quick, low-interest loans up to $2M. However, the CARES Act builds on this with the creation of the “Paycheck Protection Program.” This program offers loans covering 2.5x your monthly payroll cost (subject to some limitations), up to $10M. Most importantly, these loans can be forgiven—making them effectively grants—if you use the loan proceeds to keep your staff employed and pay expenses like rent and utilities.
If this program sounds like something you’d like to take advantage of, you should immediately talk to your bank. And note that you cannot take a Paycheck Protection loan AND an SBA disaster loan.
Employee Retention Credit
If your practice is suffering a 50% or greater revenue hit compared to the same quarter in 2019, you are eligible for a partial subsidy designed to help you keep your staff employed. Paid as a tax credit via the payroll tax system, this provision offers a 50% credit against wages, up to $10,000 per employee. It can cover wages paid between March 13, 2020 and the end of the year.
Payroll Tax Deferral
You can now defer the employer portion of Social Security payroll tax. And although these deferred taxes must be repaid — half in 2021 and half in 2022 — this provision offers an immediate savings of 6.2% in payroll expense.
Note that this is on top of the tax credit for sick leave and child care provided by the first COVID-19 stimulus bill (the Families First Act) and the push-back of tax reporting and estimated taxes by 90 days.
The information provided in this article does not, and is not intended to, constitute legal advice.
About the author
Josh King is the General Counsel for RealSelf, the web’s leading resource for consumers researching aesthetic procedures. Prior to joining RealSelf, he spent over a decade as Chief Legal Officer at Avvo, helping that consumer online legal resource grow from tiny startup to industry leader. Josh regularly speaks and writes on issues relating to digital media, communications, and professional ethics. He’s also been known to go on about bike commuting, politics, bourbon, and traveling. Read more of Josh’s thoughts on social media and the regulation of professional speech at his aptly titled blog, “Socially Awkward”.
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