ILBA INFORMATION UPDATE MARCH 27, 2020
COVID 19 Disruption Friday, March 27, 2020
Revision, as of 3/26/2020 – State clarifies: No Golf
State officials have reversed their decision and now prohibit golf courses from opening. Golf course maintenance is permitted, along with carry-out food service.
Rep. Meier: Bars, Restaurants, and Hotels Impacted by COVID-19 Have Until April 1 to Apply for Grant Program:
Illinois State Representative, District 108, Charlie Meier stated: “If you’re a bar, restaurant or hotel in need of immediate assistance to help meet payroll, pay rent, train your employees or want to update your technology to meet the demands of delivery and curbside pick-up, this grant may give you the boost you need to help stay open and competitive during these difficult times. This grant will pay for many other things critical to the operations of bars, restaurants, and hotels. I encourage you to take the time to apply by April 1.”
$2 Trillion Relief Package passes both Chambers of Congress….The CARES Act (H. R. 748), the largest disaster relief package ever conceived by Congress, unanimously passed the Senate late Wednesday night and the House today, providing $2 trillion intended to address the economic impact of the COVID-19 crisis. See below for important information. The Committee for a Responsible Federal Budget also has a good breakdown.
- Paycheck Protection Program – $349 billion in cash flow assistance through 100% federally guaranteed loans to small businesses and nonprofit organizations during this emergency. The program can be retroactive to February 15, 2020, so employees can return onto payrolls. The loan’s covered period is February 15 to June 30, 2020. The expected forgiveness amount can be expended on payroll costs, payments of interest on a mortgage obligation, rent obligations, and utility payments. No personal guarantee or collateral is required for the loan. The maximum loan amount must be the lesser of two and a half months payroll or $10,000,000 and only small businesses that employ less than 500 employees are eligible for Paycheck Protection Program and SBA Loan Forgiveness. The borrower is eligible for loan forgiveness equal to the amount spent by the borrower during an eight-week period after the origination date of the loan on payroll costs, interest payment on any mortgage incurred prior to February 15, 2020, payment of rent on any lease in force prior to February 15, 2020, and payment on any utility for which service began before February 15, 2020.
- Qualified Improvement Property – As part of a correction of an error in the Tax Cuts and Jobs Act, businesses will be able to immediately write off costs associated with improving facilities instead of having to depreciate those improvements over the 39-year life of the building.
- Payroll Tax Deferral – Employers can defer payment on their share of Social Security taxes through 2020. Half of the deferred taxes must be paid by December 31, 2021, and the other half by December 31, 2022.
- Employee Retention Tax Credit – Employers are allowed a refundable credit against applicable employment taxes equal to 50 percent of qualifying wages up to $10,000, for a maximum credit of $5,000. Eligible employers include those forced to entirely or partially suspend operations because of COVID-19 or those experiencing a significant decline in gross receipts because of COVID-19.
- Modifications for Net Operating Losses – The provision provides that a loss from 2018, 2019, or 2020 can be carried back five years.