Small business tax resources for coronavirus

Get updates on the government assistance programs and available aid for small business owners.

Latest update: A second round of relief is coming. Read below.

Questions about aid for individuals and families?

Visit our resource center for individuals & families

Want help with taxes, bookkeeping, or payroll? Meet Block Advisors. Your small business partner.

Resource Hub

January 08, 2021

4 CARES Act small business temporary assistance programs

December 30, 2020

Main Street Lending Program serves as an alternative to PPP funds

Load More
UPDATED 12/28/2020

Second relief bill and small business taxes

New Relief Measures are Coming for Small Businesses

Finally, some good news for small business owners. You’ve been hit especially hard during the pandemic, but more aid is available to help keep you afloat. The new COVID-19 relief bill includes $325 billion in new small business support. This much-needed lifeline includes:

  • An extended, forgivable Paycheck Protection Program (PPP), with dedicated set-asides for very small businesses and expanded eligibility for 501(c)(6) nonprofits
  • New Economic Disaster Loans (EIDL) Grants for businesses in low-income communities
  • SBA debt-relief payments and enhancements to SBA lending
  • Dedicated funding for live venues, independent movie theaters and cultural institutions.

Need help understanding how the new relief bill might benefit you? Our Block Advisors small business certified tax pros can help you make sense of it all.

 

A Second Wave of PPP is Available

It’s being called the “PPP Second Draw,” meaning if you previously received a PPP loan, you have a second chance at funding with the renewed program. New loans are available if:

  • You’ve used all prior PPP funds
  • Have fewer than 300 employees
  • Can show losses of at least 25% over the prior year’s quarter

Didn’t Take a PPP Loan in the Spring? You Can Apply Now

If you have not previously received PPP funding, you are also eligible to apply. Loans of up to $2 million are available for businesses with less than 500 employees, sole proprietors, independent contractors and eligible self-employed individuals.

New Relief Priorities for Underserved Communities

Minority-owned small businesses have been disproportionately affected by the pandemic. Recognizing this, the new PPP relief package prioritizes underserved communities, earmarking funds for minority and women-owned businesses as well as non-profits.

To guarantee funding is available for truly small and underserved businesses, $40 billion is set aside (for loans up to $250,000) for small businesses with up to 10 employees and businesses located in low to moderate-income areas.

New Economic Injury Disaster Loan Program Measures for Those Hardest Hit

The Economic Injury Disaster Loan Program (EIDL) was intended to get money quickly to small business owners to alleviate cash flow issues caused by the pandemic. The new bill will ensure money is quickly distributed to the hardest-hit by:

  • Targeting the $10,000 advance to low-income communities;
  • Permitting small businesses in low-income communities that received an EIDL advance to receive additional funds, up to $10,000;
  • Extending the covered period for emergency EIDL grants through Dec. 31, 2021;
  • Allowing more flexibility for the SBA to verify grant applications and extending the time for SBA to approve and disperse emergency EIDL grants from three to 21 days;
  • Authorizing an additional $20 billion for emergency EIDL grants.

New SBA Lending Policies with Lower Fees and Increased Loan Amounts

In addition to traditional Small Business Administration (SBA) funding programs, the CARES Act established several temporary programs to address the COVID-19 pandemic. New policies will ensure lower fees and increased loan limits and government guarantees. The current bill is also designed to help small businesses in low-income communities. For more details or to see if you qualify for SBA assistance, visit sba.gov.

How You Can Secure New Funding

Loan applications can be submitted with banks and approved financial lenders.

Even if you applied before and were denied, this new bill includes new funding so try again. Loan applications can be submitted with banks and approved financial lenders. This new round of funding also has set-asides for community lenders to assist hard-to-reach communities and unbanked or underbanked small businesses.

The Impact to Your 2020 Small Business Taxes

So, how does this all impact your 2020 taxes?

  • Money received from your forgivable PPP loan will not be included in your gross income at the federal level.
    • You will need to check your state to determine if the forgiven loan will be taxable on your state tax return.
  • You can deduct qualifying expenses paid with the proceeds of a forgiven PPP loan or emergency EIDL grants. Good news: this overrides previous IRS guidance.
  • In addition to payroll, mortgage interest, rent or lease payments and utilities, forgivable PPP expenses have been expanded to include:
    • Personal Protective Equipment (PPE) and investments in adapting your business to comply with health and safety guidelines;
    • Operational expenses for payments on software and other items for HR and accounting needs;
    • Essential supplier costs to keep your business open, including perishable goods;
    • Property damage as the result of public disturbances that aren’t covered by insurance.
  • If you provided paid sick leave and paid family and medical leave in 2020, your employer tax credits can be extended through March 31, 2021.
  • The employee retention tax credit is a refundable tax credit against certain employment taxes. The new bill extends and expands this credit.
  • In addition, self-employed individuals can use their average daily self-employment income from 2019, rather than 2020, for purposes of computing the paid sick leave and paid family and medical leave credits.

We know this information is complicated, but you don’t have to go it alone. We’re here to help.

Our small business tax professional certification is awarded by Block Advisors, a part of H&R Block, based upon successful completion of proprietary training. Our Block Advisors small business services are available at participating Block Advisors and H&R Block offices nationwide.

UPDATED 04/10/2020

CARES Act Business Assistance

Paycheck Protection Program

Congress has approved an additional $310 Billion in funding for this high-demand loan program. Take note: the new Paycheck Protection Program funds are expected to be allocated quickly. Contact your lender to apply right away.

This program helps businesses cover payroll and other costs. Businesses with fewer than 500 employees are eligible to borrow up to $10 million. Applications currently suspended until additional funding is available. Read below for additional assistance still available to small businesses.

The loan can be used for:

  • Salaries for employees and independent
  • Contractors making less than $100,000 annually
  • Certain health benefits
  • Mortgage interest, rent and utilities
  • Interest on other debts

Good news:

These loans are 100% guaranteed without collateral or a personal guarantee. And, if you use the loan for permitted purposes, the balance is forgiven. So, if you follow the rules, this is more of a grant than a loan!

Employee Retention Credit

This credit provides a payroll tax credit of 50% per employee for wages paid March 13 – December 31, 2020.

Your business qualifies if you:

  • Had to fully or partially suspend operations due to a COVID-19 shutdown order
  • Your business has declined by more than 50% year over year

Payroll Tax Postponement

If you employ others or you’re self-employed, you can defer paying your company’s share of social security contributions.

Economic Injury Disaster Loan

Traditionally reserved for businesses in regions declared disaster areas, this loan is now available to businesses in all 50 states.

  • Paid sick leave for employees
  • Payroll
  • Increased operating costs
  • Rent or mortgage payments
  • Repaying obligations that can’t be met due to revenue loss

Small Business Administration Loan Relief

Already have an SBA loan?
The SBA will cover your principle and interest payments for 6 months.

Find more information about the benefits for small businesses


Small business coronavirus FAQs

UPDATED 12/29/2020

New coronavirus relief and small business taxes

I’m a small business owner. Does this new legislation impact me?
Will this funding actually go to small businesses?
How do I apply for small business financial aid?
Can small businesses get other types of help if they have part-time employees?
Will receiving aid impact my taxes?
UPDATED 12/29/2020

Paycheck Protection Program

What is the Paycheck Protection Program (“PPP”)?
Can I get another PPP loan if I already received one?
What if I was denied for PPP funding the first time around?
What size business can qualify for a PPP loan?
What can the loan be used for?
What is the maximum size of the loan?
What will the loan terms be?
How do I gain access to the PPP?
How does PPP work for a sole proprietorship?
I plan on applying for a loan from the PPP. I have an S-Corp and I am the only employee. Where can I find my payroll expenses on my corporate tax return?
Do small farms qualify for getting help as a small business?