Coronavirus Aid, Relief, and Economic Security (CARES) Act
IFB President Richard Guebert Jr. applauds Congress and the Trump Administration for their rapid response to write and pass the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
(April 23, 2020) Congress has approved an additional $484 billion in coronavirus relief for small businesses. Farmers are eligible to apply for the Paycheck Protection Program and the Economic Injury Disaster Loan Program. The CARES Act provided a lot of flexibility for the USDA to develop programs to assist farmers. Read details of the USDA’s Coronavirus Food Assistance Program on our USDA page.
Small Business Administration
- The SBA COVID-19 webpage details programs, eligibility requirements, and paperwork.
- (May 13, 2020) The Community Bankers Association of Illinois discusses Small Business Administration financial programs available to help navigate these difficult times.
- (May 7, 2020) The SBA recently released details about their programs and considerations for farmers and the agricultural industry. Watch a presentation with the SBA where they walk through the information.
Paycheck Protection Program (PPP)
- (June 17, 2020) The Small Business Administration has released revisions to recent interim rules regarding the Paycheck Protection Program as well as new PPP forgiveness applications and instructions:
According to the SBA, the EZ version of the forgiveness application for applies to borrowers that:
- Are self-employed and have no employees; OR
- Did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number of hours of their employees; OR
- Experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of their employees by more than 25%.
Farmers and ranchers should consult with their accountant, tax preparer, and/or financial advisor about the PPP application and loan forgiveness form to ensure all the proper documentation has been completed and reviewed.
- (June 5, 2020) President Trump signed the Paycheck Protection Program Flexibility Act of 2020, which includes corrections that AFBF requested for the program, including:
- Extending the loan forgiveness period to include costs incurred over 24 weeks after a loan is issued or through December 31st.
- Establishing a minimum loan maturity period of five years, instead of the current 2-year deadline.
Additional provisions were included. Farmers and ranchers should consult with their accountant, tax preparer, and/or financial advisor about the PPP application and loan forgiveness form to ensure all the proper documentation has been completed and reviewed.
- (May 18, 2020) The Small Business Administration released loan forgiveness guidance and the application for borrowers to apply for loan forgiveness. Borrowers are responsible for initiating the forgiveness request with lenders and can do so in mid-June. If this application is not received, the entire PPP amount received will continue to be treated as a loan. According to the SBA, the form and instructions include:
- Options to calculate payroll using an “alternative payroll covered period”,
- Flexibility to include payroll and non-payroll expenses paid or incurred during the eight-week period,
- Step-by-step instructions for performing calculations required by CARES Act,
- Borrower-friendly implementation of rehiring requirements, and
- A new exemption for good faith efforts at rehiring.
Farmers and ranchers should consult with their accountant, tax preparer and/or financial advisor about the PPP Loan Forgiveness Application form to ensure all the proper documentation has been completed.
You can access the instructions and application here.
- (May 14, 2020) The SBA has provided an update for farmers on the Paycheck Protection Program with additional details. Find that here.
- (May 14, 2020) The SBA has released a new FAQ, which addresses the good faith certification required for the PPP loan. You can find that here.
- Farmers can find eligible lenders here. Applications are made through a lender.
- (April 28, 2020) The SBA released an updated Frequently-Asked-Questions about the PPP.
- (April 26, 2020) Guidance for farmers interested in PPP who file an IRS Schedule F.
- (April 24, 2020) The SBA released an updated Frequently-Asked-Questions about the PPP.
- (April 23, 2020) Illinois Farm Business Farm Management (FBFM) Association provided an example application for the PPP as a helpful tool for farmers interested in applying.
- (April 16, 2020) The UIUC FarmDoc team reviewed the PPP and the April 14th interim rule and you can watch their presentation here, or view slides here.
- (April 7, 2020) USDA will update their PPP FAQ, including questions around ag eligibility, here.
Economic Injury Disaster Loan Program (EIDL)
- (May 14, 2020) The SBA has provided an update for farmers on the Economic Injury Disaster Loan Program. Find that here.
- (May 5, 2020) The SBA provided more details to USDA on farmer eligibility for EIDL. Find that here.
- (May 4, 2020) Farmers Eligible to Apply for EIDL. Applications are made ONLINE- those can be found here.
- The EIDL Program website can be found here.
- EIDL Fact Sheet for Illinois
A helpful FAQ document on direct payments for U.S. Citizens from Congresswoman Lauren Underwood’s office.
Financial Assistance for Farm Bureau Organizations
- Small Business Administration Business Loan Resources
- A Guide to the Resources for Nonprofit Organizations
- Coronavirus Tax Relief for Businesses and Tax-Exempt Entities
- Frequently asked questions about carrybacks of NOLs for taxpayers who have had Section 965 inclusions
- CARES Act provides tax relief to insurers
- Tax implications of the CARES Act
As we navigate these new waters, remember our financial auditors will want to understand all steps taken and review the corresponding documentation
Charitable Giving/Taxable Impacts in the CARES Act
- Cash Gifts – Individuals may deduct $300 above-the-line. This charitable deduction enables a taxpayer who is one of the 90% who take the standard deduction to also benefit from his or her charitable gifts. The $300 above-the-line deduction must be gifts of cash by a nonitemizer, and may not be to a donor advised fund or supporting organization.
- 100% Charitable Deduction Limit – The usual deduction limit for cash gifts to public charities is 60% of adjusted gross income (AGI). For 2020, gifts of cash to charity (excluding donor advised funds and supporting organizations) are deductible to 100% of AGI. The gift may be for any charitable purpose and is not limited to gifts for Coronavirus relief.
- Required Minimum Distribution (RMD) Waiver – The RMD is waived for IRA and other qualified retirement plan owners for the year 2020. This provision will permit IRA and other qualified retirement plan owners to retain funds in their IRAs. Because the markets declined substantially after the current RMD was calculated based on the plan value on December 31, 2019, Congress determined that it was beneficial to waive the RMD for 2020.