Payroll Implications of the CARES Act for Manufacturers
Estimated at over $2.2 trillion, the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 is the single most expensive legislation in U.S. history. The CARES act was implemented rather quickly when it was signed into law by President Trump in March of 2020. It was intended to provide much needed economic support to businesses and individuals negatively impacted by the coronavirus pandemic. Andy Bertke and Ellen Juram, both tax directors at Barnes Dennig, recently hosted a webinar in which they discussed some of the key impacts of the CARES Act for manufacturers to maximize the benefits and minimize their tax burden.
Check out our previous blog for some of the most notable tax implications for manufacturers of the CARES Act.
Payroll Tax Deferral
Employers and self-employed individuals can ease their economic burdens by deferring the employer share of social security taxes that they would have paid from March 27, 2020 to December 31, 2020. Currently this is just a deferral of payment, but will the executive orders issued by Trump eliminate this future obligation?
The Families First Coronavirus Response Act (FFRCA) introduced the paid sick leave and paid expanded family and medical leave credits and the CARES Act introduced the employee retention credit. These credits are designed to incentivize employers for not furloughing their employees. Is your company eligible for either of these credits?
Payroll Protection Program (PPP) Loan Forgiveness
With the CARES Act came about the Payroll Protection Program, which is a 1% loan for small businesses with a 2-year repayment period. The loan may be forgiven if certain criteria are met. Banks are expected to have begun accepting loan forgiveness applications as of August 10, 2020. Should your company be applying for loan forgiveness early? Utilize Barnes Dennig’s Quick Forgiveness Application Readiness test to assess if ready.
Have a question about how your manufacturing organization is leveraging the CARES Act, maximizing PPP loan forgiveness, or ideas for minimizing your tax burden? Talk with a member of our COVID-19 Advisory Team or one of our manufacturing industry experts. If you’d like to see the webinar for yourself, you can access it here – you can also download the slides.
Have a PPP loan of $2 million or less, and targeting the 8-week period? Take our PPP Loan Forgiveness Quick Test, and we’ll contact you with recommended next steps.
With a client service team dedicated to the manufacturing industry, we help manufacturers maximize the resources they can control and prepare for the conditions they cannot. Learn more about our dedicated Manufacturing team here.
Our international tax team receives specialized training focused on international tax and accounting matters for businesses, and we participate in internationally minded organizations so that we can provide introductions and resources for our clients. Learn more about our International assurance and tax practices.