What Does the CARES Act Mean for American Businesses?

The CARES Act offers aid to small business. Here is what small business owners need to know to take advantage of this aid.

What is the CARES Act?

The CARES Act is short for the Coronavirus Aid, Relief, and Economic Security Act. President Trump signed the bill into law on March 27, 2020. The stimulus package offers $2.1 trillion in aid to individuals and businesses. Some of this money is earmarked for small businesses.

Employee Retention Credit

While not limited to small businesses, the bill offers a refundable payroll tax credit of up to $10,000 of wages paid to an eligible employee during the crisis. The credit is available to both for-profit and non-profit businesses whose operations have been disrupted by government restrictions that have resulted in a full or partial suspension of their business operations. The credit is also available to business whose quarterly receipts are down by 50% or more on a year-over-year basis.

The wages of employees who were either furloughed or whose hours have been reduced are eligible for the credit. For employers with 100 or fewer employees, all employee wages for full time employees are eligible regardless of whether the employee was furloughed.

Credits: Thestreet

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