Coronavirus Relief Bill and It’s Impact On You

home office desk
Photo: Stuart Green

Business Relief

The details of the bill are not readily available (at the moment!), below are some items for you to begin reviewing/gathering.

Please review and gather the appropriate information, suggestions are noted below. NOTE: THIS DOES NOT MEAN APPLY NOW or by doing all of this, you will get a loan! Rather be more informed and be ready when the final details come out.

SBA Disaster Loan Assistance: Review your state/county for disaster notification (although every county in the US should fall under here).

SBA Disaster Loan application: Three-step loan process application for up to $2,000,000.

CDC and Work Environment Items: Interim guidance on office duties.

While the Program is being “built” with the SBA and banks, it is suggested you begin the process of gathering your information, which will include:

  1. Personal financial statement: This is a “personal balance sheet” as of a specific date. This would be done as of the last date of a month/year. This lists out your personal assets less your personal liabilities. Be sure to include the net value of any business and real estate you may own, less any mortgages, personal debts, credit cards, “IOU’s”, taxes due, etc. the net result is ‘Net Worth’. Any business owner that owns >20% should expect to complete this too.
  2. Request for transcript of personal/business tax returns: Form 4506-T – presumably this will be for 2019 (if filed), 2018, 2017 & 2016. You will have to complete this for EACH business you are applying for the loan and personally. Any business owner that owns less than 20 percent should expect to complete this too.
  3. Business financial statements: Profit and loss – 12/31/19 year to date, 2/28/2020 year to date (IF AVAILABLE AND COMPLETE). Do not use a middle of the month date, ALWAYS USE A MONTH END/YEAR END. Make sure to include your accounts receivable AND payables at the respective balance sheet dates.
  4. Schedule of liabilities that ties out to the debt on your balance sheet of #1 and #4  above, and the principal due by year. For example, you have a five-year car loan, your monthly payments are $500 a month, the interest rate is approximately 5 percent. You’d make payments of $500 x 12 = $6000; however, that includes the interest of approx. $750 – $1200 depending on the outstanding loan balance.
  5. Detailed income statement by month, over the past 24 months. This will help you complete applications and know what your monthly revenues and applicable expenses are.
  6. Make sure you have copies of your tax returns for the past three years (please check your portal, if they need to be updated, please let us know).
SBA Workbook 2019 screenshot
Click to open/download. This document may automatically download to your downloads folder.

I have assisted you hereby creating a SBA Workbook for you to get ready for your banker’s requests. See the “How To” tab for instructions to aid you in preparing this information. This document may automatically download to your downloads folder. Check there if it does not open in a new window.

I strongly suggest you call your banker and start the process by beginning with asking for any of your current loans to be “converted” to interest only for the next 3-6 months. If you don’t ask, you won’t get!

What should you do?

Review your expenses, identify what can be reduced, and define what can be deferred or now eliminated, if need be.

If you have any questions during this process, need assistance in computing the respective schedules, please contact us.

Please note as a licensed CPA firm, we will have to issue a report with any financial statement that comes out of our office for you. If you have historically engaged us to prepare a business tax return, this is not part of preparing that tax return. The same applies to a personal financial statement.


2019 Federal (and most state) Income Taxes: If you owe a balance on your 2019 return, we are advising to file your return in mid-June, as the new due date has MOVED to July 15, 2020, as is any payments that are due with that return (previously April 15, 2020).

You do NOT need to file an extension, this is an automatic deferral of the due date. (Note to check your states, some have not yet confirmed this process, as the governments may be on “lockdowns” and cannot go to work to vote on a local/state bill!). Most likely, something else will pass at the federal level between now and July 15. Therefore, we advise to NOT file at this time.

If you are due a refund, go ahead and file to get your money in your pocket to pay your bills.

“Corona Checks”: Depending on your income you may receive a direct deposit check for up to $1200 single and $2400 married couple – income below $75,000 (single) and $150,000 (married). The income limit is defined as ADJUSTED GROSS INCOME from your personal income tax returns, as filed. At present, if you were above these amounts in 2018 and 2019 and now will be below, that has not been taken into account in this bill. Look for additional assistance (possible) in future updated bills. Expect these checks at the END OF APRIL.

Student Loans:  Any federal student loan (not one you have with a private bank) is eligible for loan deferment. Contact your student loan service and confirm before you stop paying. Write down who you spoke to, the date and time, their full name/title, and then follow up with them that the loan is deferred. I suggest you follow up with an email documenting your call and what was discussed on the deferral. DO NOT ASSUME it is deferred, not paying AND NOT communicating, is the worst thing you can do. I also suggest you inquire if interest is accruing or being stopped during this period. Your federal student loans SHOULD not accrue interest. Employers can also pay up to $5250 of an employee’s student loan and not count that as income for the employee.

Required Minimum Distributions: At the moment, you are not required to take an RMD out of your plan for 2020.

Pension Plan Distribution: As a last resort, if you have to, you can take out up to $100,000 of your pension plan early, without the 10-percent penalty, as long as it was withdrawn because of the outbreak (definition here will be interesting when it is made clearer, as it is presently “you, a spouse or dependent tested positive or you experienced a variety of other negative economic consequences”). Employees can “self-certify” they are qualified to pull money from a workplace plan, and the tax is due over three years and any money redeposited over three years is not taxable. Those that have the finances, may want to review any ROTH conversions in Q3 2020.

401k Loans: Employees can take out twice the loans allowed for 6 months if your plan has a loan provision (usually capped at $50,000). New emergency relief allows a $100,000 loan if needed.

Charitable Deductions: For 2020, if you do not itemize, an “above the line” deduction for $300 is allowed (capped). In addition, you can donate up to 100 percent of your adjusted gross income (AGI), if your AGI is $1,000,000, you can donate up to $1,000,000 to a public charity. You can NOT donate to your donor-advised fund for the 100-percent deduction. Donations for the 100-percent rule must be made directly to the public charity. The old charity rules apply for donor-advised funds and private foundations. Any donation “not deductible” or over your income limits, will be carried forward into future years.

Renters: If your landlord’s mortgage is backed by Fannie, Freddie, or any other federal entity, there is a four-month moratorium in place for evections. MAKE SURE YOU TALK TO YOUR LANDLORD before you stop paying your rent!

Mortgage: If your mortgage is financed through a U.S. Government agency (think FANNIE/FREDDY), your mortgage payment may be deferred several months now, until the sooner of the (i) sale of the property, (ii) final due date of your mortgage. BE AWARE that if your mortgage expires in the next 3-5 years, you will now have a larger balloon payment due sooner (you may still have a balloon due if your mortgage isn’t going to expire for over 5 years).


Overall: Freeze all non-essential expenses, cut executive/owners compensation, discontinue all travel and meetings, and use web-based meetings/platforms instead. Delaying which course of action to take or a slow reduction of expenses can be deadly to your business now.

Small Business Loans Up to $10,000,000: Potentially forgivable loans if the business spends the funds during an eight-week period after the origination date on the following items:

  1. Payroll costs;
  2. Interest payment on any mortgage incurred prior to February 15, 2020;
  3. Payment of rent on any lease in force prior to February 15, 2020; and
  4. Payment on any utility for which service began prior to February 15, 2020.

Loan forgiveness will be reduced for certain employee reductions, such as layoffs or wage reductions. Wages are subject to annual caps. Final rules and regulations are due from the SBA within 15 days.

Net Operating Losses (NOL): Have been revised to enable you to carryback five (5) years and to reduce the income limitation. You can now deduct the full NOL against prior period incomes. If losses were incurred in 2018 (and if 2019 filed), you can amend prior returns for additional NOL’s now.

Charitable Deductions: Like the individuals above, an increased threshold will be allowed. Now corporations may make up to 25 percent of the income limitations.

Payroll Taxes: Payroll taxes, specifically the employer Social Security tax of 6.2 percent of wages paid, are due each pay cycle (depending on your payroll amounts). With the new CARES Act, the COMPANY portion of the Social Security tax may be a deferred payment over the following two years, with half due by December 31, 2021, and the remaining portion by December 31, 2022. AT THE MOMENT WE ARE ADVISING AGAINST THIS DEFERRAL UNTIL ADDITIONAL GUIDANCE IS PROVIDED RE: YOUR PERSONAL LIABILITY AS A TRUSTEE OF THESE FUNDS.

Paid Sick Leave: The CARE Act introduces a tax credit for certain employers subject to closure due to COVID-19. The credit is applicable against employment taxes for each calendar quarter equal to 50 percent of qualified wages for each employee per quarter. The wages taken into account for all calendar quarters are limited to $10,000. The employer must take into account any credits received from Families First Coronavirus Response Act (FFCRA) in calculating eligible wages.

An eligible employer is one that:
(a) was carrying on a trade or business during the calendar year 2020; and
(b) with respect to any calendar quarter for which;
(i) operation is fully or partially suspended due to orders from an appropriate government authority limiting commerce, travel, or group meeting due to COVID-19; or
(ii) in which there has been a significant decline in gross receipts.

Beginning in the first calendar quarter after 12/31/2019, a decline in gross receipts occurs if the entity has less than 50 percent gross receipts in a quarter compared to the same quarter in the prior year, and ending with the calendar quarter for which gross receipts are greater than 80 percent of the same calendar quarter in the prior year.

Families First Coronavirus Response Act (FFCRA or Act): FFCRA provides that employers with fewer than 500 employees (and all public sector employers) are required to provide paid sick leave of two (2) weeks for full-time employees due to an isolation or quarantine order or advisory, or are experiencing symptoms, or caring for a family member or for a child whose school or care provider is closed due to public emergency.

Further, such employers are required to provide up to 12 weeks of job-protected leave to employees to care for a child whose school or care provider is closed. Employers would be required to pay two-thirds of the wages of these employees, not to exceed $200 per day and $10,000 in aggregate.

Since the majority of our clients are comprised of businesses with fewer than 500 workers, these provisions will be a major benefit to employees impacted by COVID-19. The Labor Department is authorized to exclude certain healthcare providers and small businesses with fewer than 50 employees. In order to fund these benefits, employers may claim a 10 percent refundable payroll tax credit on wages associated with paid sick and medical leave as required in the bill, as well as expenditures associated with additional health benefit contributions. Any additional wages paid due to the leave requirement will not be subject to the employer portion of the payroll tax.

Construction Industry

You may have been lax in the past about getting change orders signed in a timely manner. Keep in mind, “Joe PM” who would sign the CO for you on Monday, may not be employed/show up to work on Monday. Someone else may take over for Joe PM who doesn’t know the scope of the CO you discussed and agreed to with Joe PM.


  1. Ensure your CO’s are signed and documented.
  2. Consider partial workweeks if you have to reduce costs.
  3. If you are going with a 20-30-percent labor reduction, consider a four-day workweek.
  4. Review job sites for applicable social distancing, clean job site, etc.
  5. Be cognizant of materials purchased coming from overseas and new delays in delivery.
  6. Review contracts for force majeure clauses and your own delay clauses.
  7. Expect new construction projects to slide/move out before starting.
  8. If a job does stop, review your mobility clause/costs and don’t forget to include in any new contracts and/or additional billings for the related items.



  1. Be sure to maintain adequate staffing for your projects in a timely manner.
  2. Review new orders for the financial strength of customers and their ability to pay you.
  3. Review and update the payment terms of certain customers.
  4. Continue to stress safety standards and review current hygiene within your plant.
  5. Consider additional “wipe-down time” as needed between shifts and/or update wash areas for staff.
  6. Review workload further out than normal, plan a 60-120 work calendar to manage staff needs in light of school closures (and how their parents may or may not be able to work).
  7. Discuss with vendors revised payment terms as needed.
  8. Review with landlords any rent due and if there are any grace periods they may be offering.



Now, more than ever, communicating with all those that are impacted and with other decision-makers is vital. No one is experiencing this business slowdown alone, to some degree we are all affected by this.

Talk with your bankers. Talk with your insurance agents. Talk with your attorneys. And, talk with your accountant to see what avenues you need to drive down and what advice your professional advisors can help you from not turning down!

Do not go down this path alone. Being stubborn today to ask for directions, you’ll simply drive yourself and your business to a dead end.

Make sure you check in with your employees to see how they are dealing with all of this personally and let them know, they are not going through this along.

As your work worlds have changed significantly and overnight, for the most part, think about what you will do differently when this passes.

  • Are there different safety measures you will use, different office policies?
  • What applications can you utilize effectively now companywide that will help you in the long-run?
  • Are there truly unnecessary costs that can be cut and the capital be deployed in another avenue that either makes you more money or saves you time?
  • What opportunity is lying just out of your reach now?
  • Is it time to reach a little further?

This will pass. And soon, we will be better for it!