CARES Act Summary

A summary on provisions in the federal “CARES” Act for Small Business 

NOTE: This information was provided by the U.S. Chamber of Commerce.


Small Business “Paycheck Protection Program:”

  • New $349 billion lending program, modeled on existing SBA 7(a) program, with 100% government guarantee (as opposed to 75% guarantee for 7(a) loans).
  • Eligibility:
    • Small businesses as defined by SBA size standards (generally up to 500 employees, but up to 1,500 employees depending on the sector and certain sectors are based on revenue).
    • Businesses in the Accommodation and Food Services Sector (NAICS Code 72) are eligible with up to 500 employees at each location. o 501 (c)(3) non-profits with fewer than 500 employees.
    • Sole proprietors, the self-employed, and independent contractors.


  • Regulatory Streamlining:
    • SBA’s standard “no credit elsewhere” test is waived
    • All lenders (non-SBA lenders to be approved by Treasury and SBA) can provide loans
    • No personal guarantee or collateral required
    • Lenders defer fees, principal, and interest for no less than 6 months and no more than 1 year.


  • Maximum Loans: Generally, monthly payroll costs for 2 ½ months, not to exceed $10 million. Payroll costs exclude compensation paid to individuals, including the self-employed, above $100,000 a year.
  • Requirements: The employer certifies loan will be used to retain workers, maintain payroll, make mortgage or lease payments, and pay utilities.
  • Loan Forgiveness: The borrower shall have a portion of their loan forgiven in the amount equal to their payroll costs (not including costs for compensation above $100,000 annually), interest payments on mortgages, rent payments, and utility payments between February 15 and June 30, 2020. Loan forgiveness will be reduced if the borrower reduces employment by a ratio similar to their reduction in employment or if borrower reduces salaries and wages by more than 25%.
Paycheck Protection Program Guide & Checklist

Business Tax Provisions:

  • Employee retention credit for employers subject to closure due to COVID-19 (permits fully refundable 50% tax credit applicable to the employer’s share of payroll 5 taxes on wages up to $10,000 per employee; widely available with special rules for small employers).
  • Delay of payment of employer payroll taxes (defer payment of the employer share of the Social Security tax due between now and January 1, 2021 to December 31, 2021 (50% due) and December 31, 2020 (remaining due).
  • Modifications for net operating losses (for 2018, 2019, 2020, loss can be carried back 5 years, temporarily suspends 80% limitation; extends to pass-throughs, sole proprietors).
  • Accelerates ability of companies to recover AMT credits.
  • Modification of limitation on business interest (for 2019, 2020, increases 30% limitation to 50%).
  • Technical amendment regarding qualified improvement property.
  • Temporary exception from excise tax for alcohol used to produce hand sanitizer (for 2020).
Guide to Employee Retention Tax Credit

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