Navigating Small Business COVID Relief: Tax Breaks, Loans, and Grants
The COVID-19 pandemic has caused major disruptions in the global economy, forcing governments worldwide to provide relief measures for small businesses. While the various relief plans available can offer significant support, it can also be overwhelming to manage them all. This article aims to provide clarity and guidance to small business owners through the available tax breaks, loans, and grants.
Tax Breaks
Small businesses can benefit from numerous tax breaks provided by the government as part of the relief packages. A few of the significant tax breaks available are:
Employee Retention Credit – This credit is available for businesses that continue to pay their employees during the pandemic. Eligible businesses can claim a refundable credit of up to $5,000 per employee.
Deferral of Payroll Taxes – To provide financial relief to businesses, the CARES act has deferred the employer portion of the social security tax. Businesses can defer the payment of social security tax on wages and self-employment tax up to December 31, 2020.
Net Operating Loss Carry-Backs – Net operating losses for years 2018, 2019, and 2020 can now be carried back for up to five years. It helps small businesses to obtain a refund of previously paid taxes and provide a significant cash flow boost.
Loans
The government has provided several loan programs for small businesses to help them maintain their operations during the pandemic. Below are the popular loan programs:
Paycheck Protection Program – This program provides forgivable loans to small businesses that retain employees, restore cut wages, or make up for employee layoffs. The program has strict requirements and guidelines for loan forgiveness.
Economic Injury Disaster Loan – This loan provides low-interest loans of up to $2 million to small businesses that have suffered because of the pandemic. The loan requires no collateral, and the interest rates are low at 3.75% for small businesses and 2.75% for non-profits.
Grants
Grant programs have been established to help small businesses retain their workforce, cover their rental expenses, or pay their bills. Some popular grants are:
Shuttered Venue Operators Grant Program – This grant program provides assistance to operators of live venues, museums, and theaters that have been fully or partly closed because of COVID-19.
Restaurant Revitalization Fund – This is a one-time grant program for businesses from the restaurant industry that suffered a significant loss in revenue due to the pandemic. The program offers up to $10 million per entity.
Conclusion
Navigating the various relief measures provided by the government during the pandemic can be overwhelming for small businesses. Understanding the tax breaks, loans, and grants available to them can help them make informed decisions and obtain the maximum benefits. We hope that this article has provided a comprehensive guide to small business owners on how to navigate the relief measures available and continue to thrive during these unprecedented times.
(Note: Do you have knowledge or insights to share? Unlock new opportunities and expand your reach by joining our authors team. Click Registration to join us and share your expertise with our readers.)
Speech tips:
Please note that any statements involving politics will not be approved.