COVID-19 Resources for Small Businesses and Individuals

Resources for Additional Information & Assistance

• SBA - Local Assistance Directory

• Small Business Development Centers - Webinars & Materials

• U.S. Senate - Small Business Owner's Guide to the CARES Act

• SBA - Disaster Loan Assistance

• SBA - Paycheck Protection Program (PPP) 

NC Rapid Recovery Loan

The deadline for applying for a NC Rapid Recovery Loan is Oct. 15, 2020. The loans are available to any NC-based small biz impacted by COVID that began operations before March 23. Loans are available for up to $250K with a 10 year loan term. More than $35 million in rapid recovery relief loans have been provided statewide to date.

Loans are subject to availability, so apply for yours through Mountain BizWorks asap. 

NC Job Retention Grant

The N.C. Job Retention Grant may be able to offer assistance if your business or non-profit has experienced interruption due to the coronavirus pandemic, and you have not already received funds from the federal Paycheck Protection Program (PPP), the federal Main Street Lending Program, or the North Carolina Rapid Recovery Loan Program. Please click here to learn about eligibility requirements, frequently asked questions and to find the link for the application form.  

Applications are being accepted from now until the application deadline of Tuesday, September 1, 2020 at 11:59pm.  No applications will be awarded prior to the September 1 deadline and no applications will be accepted after the deadline. 

The maximum Job Retention Grant amount may be up to two months of the company's average payroll monthly costs from 2019, plus an additional 25% of that amount, though the grant won't exceed $250,000.

Webinars are offered on August 13th at 2pm and August 17th at 11am to walk potential applicants through the program and answer questions. Click on the link of your preferred time to register.

Email your questions or comments to the JRG team at [email protected].

If we can be of any assistance, please do not hesitate to reach out to us!  We are always happy to help!

NC COVID-19 Recovery Act Tax 1Q-2020 Credit

The Division of Employment Security announced June 30, 2020 that under North Carolina’s COVID-19 Recovery Act (S.L. 2020-3), employers will receive a tax credit towards their contribution to the state’s Unemployment Insurance Fund. The credit is equal to the amount of your contribution to the fund for the first quarter of 2020.

You do not need to do anything to receive this credit other than to file your 1Q2020 Tax and Wage Report. You must file your report to receive the credit.

If you have made a payment for the first quarter, that amount will automatically be applied to any contributions due for the second quarter of 2020. If the amount of your credit is higher than the contribution you owe, the difference will be refunded.

Please note that any outstanding employer bills for the first quarter of 2020 are no longer due and will be cancelled.

If you have questions about this tax credit, please contact the Division of Employment Security at 919-707-1150 or [email protected].

Tax Credits for Covid-affected Businesses

If your business declined by 50% or more since the quarantine began, and if you did not receive a PPP loan, you may be eligible for Employee Retention Tax Credits of up to $5,000 per employee.

The IRS is just now rolling out the rules, and you can learn more by visiting their website at https://www.irs.gov/coronavirus/employee-retention-credit or calling your payroll preparer. Clients needing assistance can call us at 828-258-2323.

The CARES Act

The new Coronavirus Aid, Relief and Economic Security Act (CARES Act) will inject more than $2 trillion into the US economy. The 880 page bill will impact all parts of society, offering small business assistance, aid to local governments, healthcare, additional unemployment benefits, retirement fund rule relaxation, and changes to tax law.  Here are some highlights of this complex economic stimulus package:

Tax Cuts for business

• A 50 percent payroll refundable tax credit is available to businesses affected by the coronavirus if they keep employees on the payroll while their operations are fully or partially suspended due to government orders.
• Delayed payment of employer share of payroll taxes (6.2%)
• Carry back net operating losses (NOLs) for 2018, 2019  or 2020, and removes 80% limitation,
• Repeals excess business loss limitation for 2018, 2019 and 2020,
• Increases permitted interest deduction for 2019 and 2020,
• Write-off improvements to the interior of non-residential buildings immediately, rather than over a 39-year period.

Tax Cuts for Individuals

• Most US residents will receive a $1,200 rebate/credit check, with additional $500 per child.
• Penalties waived for tapping retirement funds early; distributions will be taxed over a 3-year period or amount can be recontributed without contribution limits,
• Required Minimum Distribution (RMD) rules for retirement accounts waived for 2020,
• $300 above-the-line charitable cash deduction allowed for 2020 for taxpayers who take the standard deduction,
• Increased income limitation on charitable contributions
• Exclude up to $5,250 in employer payments of student loans from employee’s taxable income.

What the CARES Act says about RMDs

The CARES Act waives required minimum distributions (RMDs) from certain defined contribution plans and individual retirement accounts (IRAs) for the 2020 tax year. This will not only give your portfolio the potential to grow in value but will also lower your taxable income and related tax liability for the 2020 tax year.

Have you already taken your 2020 RMD?  Under normal circumstances, RMDs are not eligible for rollovers; however, the CARES Act will allow you to roll over your 2020 RMD to an IRA or other eligible retirement plan to avoid paying tax on that initial distribution under limited circumstances. If you took your RMD anytime from Feb. 1 through May 15, you have until August 31, 2020 to roll over that distribution and avoid paying tax on that amount.  This waiver includes any retirement account subject to RMDs, such as IRAs, 401(k)s, Roth 401(k)s and inherited accounts.

Roth IRA Conversion
Another opportunity to consider in conjunction with the waiver of 2020 RMDs is the conversion of a traditional IRA to a Roth IRA. This is a particularly beneficial strategy now, because not only could your 2020 taxable income be reduced (due to the absence of the 2020 RMD in addition to other potential losses as a result of the current economic environment), but also the tax effect of the conversion will be lower when the value of the assets in the account being converted are depressed.
There are two main advantages of a Roth IRA versus a traditional IRA.

•  Roth IRAs have no minimum distribution requirements, so you can leave the assets in your account to continue to grow tax free even after you reach age 72. Additionally, if you’re fortunate enough to not need the cash flow during your own retirement, this would be a great opportunity to leave those assets to your heirs.
• Any withdrawals you decide to take in the future would be tax free, unlike traditional IRAs, which are subject to ordinary income rates in the year of withdrawal. 

We want to remind you that these opportunities are still available.  As always, reach out to us at 828-258-2323 if you would like assistance.

Funds for Small Businesses, non-profits, sole proprietors and self-employed

• The Paycheck Protection Program will provide loans up to 2.5 times the borrower’s average monthly payroll costs. It will cover payroll costs (up to annual amounts of $100,000), continuation of group health care benefits, employee salaries, commissions, or similar compensation, mortgage payments, rent, utilities and interest on any other debt obligations incurred before the covered period. Loan forgiveness is available if most of the funds are spent on employees. No collateral is required, maximum interest rate of 4%, maximum term of 10 years, no interest or principal payments required for 6 months, loans will be made by banks. Applications open April 3 for small businesses and April 10 for all others.  The deadline has been extended to August 8, 2020.

***There have been some revisions to the PPP program since its inception.  Please visit the U.S. Dept. of the Treasury website by clicking here for the most up-to-date information.

• SBA EIDL Program offers low interest (3.75%) emergency loans of up to $2 million to pay expenses that could have been met if the disaster had not occurred. Advance grants of $10,000 are available within 3 days of filing the application, which can be done online with the SBA here. You can apply for both the PPP and EIDL program, but they need to be for different purposes.

• NC Rapid Recovery Loans provide bridge loan financing up to $50,000 with 0% interest and no payments for 6 months, then 48 months at 5.5%. Apply for these at Mountain BizWorks

• One Buncombe Fund provides loans of up to $10,000 to help meet immediate expenses and bridge to federal aid or get back to business. 4% interest with no payments due for 6 months, then 36 months at 5.5% interest. Apply through Mountain BizWorks.

For more details about any of these tax cuts or loans, please visit our website at CLKCPA.com or give us a call at 828-258-2323.