In response to the COVID-19 pandemic

In response to the COVID-19 pandemic, the recently passed CARES act has a number of provisions available to both businesses and individuals during this difficult time. Below are select highlights that pertain to many small and mid-sized businesses as well as the individual takeaways. If loans are needed, we believe the best place to start is with the SBA https://disasterloan.sba.gov/ela/and the AZ Commerce Authority https://www.azcommerce.com/covid-19/business-financial-support/ as both have loans available for businesses. Please keep in mind the Federal and Arizona Governments are issuing legislation daily. Some provisions are changing daily, so please confirm all information in this e-mail as you are navigating the process.
Also please visit our website, AZCPAS.com for the SBA flowchart on the Three Step Loan Process on Disaster Loans.

CARES ACT HIGHLIGHTS

Businesses:
•Small Business Loans:
Paycheck Protection Loans
Fully Guaranteed by the federal government
Limit of the lesser of
• 2.5x average monthly payroll costs during the 1 year period before the date on which the loan is made OR
• $10 Million
10-year term max, with max of 4% interest
Fees are waived and no personal guarantee required
These paycheck protection loans can be forgiven on a tax-free basis if certain requirements are met. Forgiveness limited to certain business expenses paid within the 8-week period starting with the date of the loan.

•Employee Retention Credit
One-year credit against employers 6.2% share of Social Security portion of payroll tax
Must have been fully or partially suspended during any calendar quarter in 2020 due to government orders, or business remaining open, but gross receipts were 50% less than what they were for the same quarter for 2019.

•Delay of payment of employer payroll tax and Self-Employment Tax
6.2% share of Social Security portion of payroll tax due at end of 2020 can be delayed until end of 2021 and 2022. Limitations apply.

•Qualified Improvement Property Fix
Long and short of it: qualified improvement property (including leasehold improvements) are now 15-year class property and eligible for bonus depreciation. Note: AZ does not conform to this at this time.

Individuals:
•Stimulus checks to individuals to be out by end of year 2020
$1,200 per person, $500 per child, with income limitations (Phaseout begins at $75,000 AGI Single and $150,000 AGI Head of Household)

•Penalty free retirement distributions allowed of up to $100k in 2020 for those impacted directly by COVID-19
Distribution can be repaid over a three-year period
Income can be recognized over a three-year period

•RMD’s requirements from retirement plans suspended for 2020

•An above the line deduction allowed for non-itemizing taxpayers who donate to charity.

Additional resources for individuals and business owners:

Benefits Finder: https://www.benefits.gov/about-us

Disaster Loan Assistance: https://disasterloan.sba.gov/ela/

IRS: https://www.irs.gov/coronavirus

AZ Resources: https://arizonatogether.org/

AZ Unemployment: https://des.az.gov/services/coronavirus