May 4, 2020

Other Aid Available To U.S., Canadian Businesses During COVID-19

In the event a U.S. business does not want, or cannot get access to either the U.S. Small Business Administrations’ Paycheck Protection program or the Federal Reserve’s Main Street Lending Program, it should consider other options to obtain federal aid during the COVID-19 pandemic. These include:

  • The Employee Retention Tax Credit, which is a $5,000 tax credit per employee for businesses who have been shut down or experienced a 50 percent drop in gross receipts. Last week, the Internal Revenue Service issued additional information about this program, which is available here. (Interested companies also can click here for the U.S. Chamber of Commerce’s guide to this program, and magazine has more information here.)
  • The SBA’s Economic Injury Disaster Loan (EIDL) Program, which provides grants of up to $10,000 for businesses. SBA’s information about the program is available here.
  • The IRS also has issued guidance for the CARES Act’s net operating loss (NOL) carryback provision. This provision allows companies to use tax losses from 2018, 2019, and 2020 to offset income from the prior five years. A new tax deadline extension also builds on prior IRS guidance and now allows firms to delay certain estimated tax payments. Per the IRS, “any individual or corporation that has a quarterly estimated tax payment due on or after April 1, 2020, and before July 15, 2020, can wait until July 15 to make that payment, without penalty.” A press release on the IRS action can be found here, and the guidance document can be found here. The IRS has announced it will be accepting claims by fax, rather than hard-copy mailing, for net operating loss refunds. More information on the temporary faxing process can be found here.

For more information on these programs, and for other important advice on how to lead and manage through this crisis, MSCI recommends visiting BDO’s COVID-19 portal, available here. Information about the Canadian government’s financial and economic support programs is here.