On April 8, 2020, attorney Stan Doida, and former member of Law Bank, presented to the LawBank member community of independent lawyers on the CARES ACT. In this presentation, Stan provided an overview of the CARES Act and how it can be used by businesses and entrepreneurs to offset the economic impact of the COVID-19 crisis.
On March 27, 2020, Congress approved a $2 trillion stimulus package known as the Coronavirus Aid, Relief, and Economic Security Act or the “CARES Act.” The idea behind this bipartisan stimulus package was to provide direct economic assistance for small businesses and families to preserve American jobs, help to cover expenses for small businesses, and to provide support to local governments. The CARES Act is 880 pages long and Stan’s helpful overview shed light on the most salient aspects for the benefit of LawBank’s small law firm members and their clients.
In this webinar, information was provided about how small businesses, including small law firms, are eligible for the Paycheck Protection Program (PPP) which allows them to continue to cover overhead expenses such as payroll. The PPP is essentially free money for businesses that have been affected by the COVID-19 pandemic and will help with payment of up to eight weeks of payroll expenses including health insurance, payroll taxes, and state taxes. Stan was clear in his presentation that the PPP program cannot be used to cover the expenses of independent contractors and that the timeframe for calculation of payroll costs will be one year before the loan term or around April 1, 2019 to March 31, 2020. In lieu of a PPP loan, the CARES Act allows for small business employers to capitalize on a payroll tax credit that can help provide them immediate cash. In addition, it would allow business owners to defer the payment of payroll taxes (50% due by 12/31/21 and 50% due by 12/31/22).
Stan moved on to cover the general loan terms of the CARES Act as well as who will be considered an eligible loan recipient. He discussed the Colorado Stay-at-Home order which limited the businesses that can remain open at this time to those that are considered essential. This order has affected industries disproportionately with the finances of restaurants and bars being greatly impacted.
The attendees of this webinar were provided with an analysis of the CARES Act as of April 8, 2020. Stan acknowledged that this information is changing constantly as the federal government continues to react to the COVID-19 circumstances.
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