For the time being, we are continuing to alternate through the office Monday-Friday. We plan on continuing this schedule through the end of April. So far, we feel that this schedule is working successfully by allowing us to stay on top of the most important mail, compliance, AR and AP, but also minimizing the risk of exposure.
As I’m sure you have heard already, Congress has passed the Coronavirus Aid, Relief and Economic Security (CARES) Act, a $2.2 trillion economic stimulus bill which includes a number of programs and provisions that will help support wineries as they cope with the current crisis.
Below please find a brief description of the various aspects of CARES that we received from the Wine Institute News Alert on 3/26. We have taken the initiative of familiarizing ourselves with the process of applying for aid. If you plan on applying for aid but have not done so yet and would like help, please let us know:
CARES ACT PROVISIONS FOR WINERIES:
Small Business Paycheck Protection Program
This SBA loan forgiveness program is meant to help small businesses (fewer than 500 employees) impacted by the pandemic and economic downturn to make payroll and cover other expenses from Feb. 15 to June 30. Notably, small businesses may take out loans up to $10 million—limited to a formula tied to payroll costs—and can cover employees making up to $100,000 per year. Loans may be forgiven if a firm uses the loan for payroll, interest payments on mortgages, rent, and utilities.
Employee Retention Tax Credit
Employers are eligible for a 50% refundable payroll tax credit on wages paid up to $10,000 per employee during the crisis. It would be available to employers whose businesses were disrupted due to virus-related shutdowns and firms experiencing a decrease in gross receipts of 50% or more when compared to the same quarter last year.
Deferral of Payroll Taxes
Employer-side Social Security payroll tax payments may be delayed until Jan. 1, 2021, with 50% owed on Dec. 31, 2021 and the other half owed on Dec. 31, 2022.
Expanded Net Operating Loss (NOL) Provisions
Firms may take net operating losses (NOLs) earned in 2018, 2019, or 2020 and carry back those losses five years. The NOL limit of 80% of taxable income is also suspended, so firms may use NOLs they have to fully offset their taxable income. The bill also modifies loss limitations for non-corporate taxpayers, including rules governing excess farm losses.
Expanded Net Interest Deduction
The net interest deduction limitation, which currently limits businesses’ ability to deduct interest paid on their tax returns to 30% of earnings before interest, tax, depreciation, and amortization (EBITDA), has been expanded to 50% of EBITDA for 2019 and 2020.