How New Aspects of CARES Act can affect Utah Businesses and Workers
Just before the new year turned, Congress passed another version of the CARES Act, legislation that is meant to bring some relief to the millions of Americans that have been affected by the pandemic response.
With businesses still struggling and many families still navigating choppy financial waters, the billions of dollars that have been released by the government to help with COVID-19 related concerns will likely be of great relief to you and your employees.
There are many components to the CARES Act’s latest round that need to be unpacked to better understand their impact. We’re sharing act reviews from trusted news sources and a leading financial magazine to give you some idea of what to expect for both business and personal finances. We’ll also detail what First Utah Bank can offer with the new round of the Paycheck Protection Program (PPP) lending.
How businesses can find relief
Of course, one of the most public elements of the CARES Act is well underway – the distribution of stimulus checks to eligible U.S. residents.
According to a review of the CARES Act by CNN, there are also three unemployment funding aspects: a $300 enhancement to regular benefits through March 14, an expansion of the Pandemic Unemployment Assistance program to gig workers and independent contractors, and the Pandemic Emergency Unemployment Compensation program for people who have state benefits ending during this timeframe.
For small businesses, there are several relief efforts to consider. One is the revival of the PPP, which in its second round will be for businesses with fewer than 300 employees that saw decreases of 25% or more during most of 2020. The program includes an additional $12 billion earmarked for minority-owned businesses.
Another aspect that affects businesses concerns payroll taxes. Owners now have their deadline to increase employees’ withholding extended from April 30, 2021 to Dec. 31, 2021.
A look at IRAs and other retirement plans
The online site PlanAdviser also details some changes concerning retirement plan sponsors, with the biggest change being that qualified sponsors can avoid a partial plan termination for employees who were laid off or have been furloughed. As they explain, it means that companies can re-hire without fear of the plans being terminated in part.
The AARP website also details some changes with retirement savings, and there is definitely good news lurking in those details. People with Individual Retirement Accounts (IRAs) can skip the required minimum distributions. The amount that you can place in an IRA is the same, but there have been some raises on income limits deducting a traditional IRA or contributing to a Roth IRA, according to the article.
Other potential benefits for businesses and workers
One interesting aspect of the new CARES provisions is the help for the entertainment and tourism industries. According to CNN, there is a $15 billion grant program for museums, live venues and theaters, if they have lost a minimum of 25% of their income. The money is earmarked for payroll, rent, PPE and utilities.
If you or someone one you know has a child care business, there’s also specified relief as part of the act. A total of $10 billion is dedicated to that industry alone. There’s also an additional $3 billion being added to the established $175 billion fund for health care providers and hospitals who may have suffered financially due to the pandemic response.
The CARES Act also brings additional relief for people who may have their rental properties affected. The plan features $25 billion that is dedicated to rental assistance for people who have been out of work due to the pandemic response. The Supplemental Nutrition Assistance Program (SNAP) has also been expanded for the next six months with benefits being raised by 15%, while food banks and pantries are receiving an extra $400 million to provide their services for those suffering food emergencies.
Ready to help Utah businesses with PPP lending
As your hometown bank, First Utah Bank is once again a part of the PPP program as part of the CARES Act. Many of the original aspects of these loans from the federal Small Business Association (SBA) are the same as the first round earlier in 2020, but the SBA is still releasing new guidance on the program.
The SBA notes that loans are to be used to keep workforces employed while the pandemic continues. The loan forgiveness element of the PPP does still come with some requirements from businesses who receive the loans.
From the 8- to 24- week period that’s a part of the program, the money in the loan needs to be spent on payroll costs and other eligible business expenses, with 60 percent at least being dedicated to payroll. Employee and compensation levels also have to be maintained during the time of the loan.
We can help you navigate the applications for these loans as part of First Utah Bank’s own response to the pandemic. To find out more about this round of PPP loans, go to our dedicated website for this effort, or call us at 801-308-2265.