Understanding The CARES Act: What You Need To Know

By now, you’re aware of the government’s efforts to assist small businesses struggling due to the COVID-19 pandemic. Congress’ passing of the $2.2 trillion CARES Act was only the beginning of the relief efforts to come.

How Will The CARES Act Help Small Businesses?

Part of the CARES Act is designed to provide extensive loan relief options for small businesses. One of these, the Employee Retention Credit, provides assistance to eligible employers impacted by either partial or total shutdown or a reduction of gross receipts due to COVID-19.

In order to qualify for the Employee Retention Credit, you may be required to submit Form 941 to reflect your first Quarter Federal employment tax returns. Your bank may request this in order to have an accurate record of your payroll when assessing your credit qualifications. 

Form 941 is required for reporting any income, social security and Medicare taxes withheld by the employer from employee wages. This form also reflects the employer’s portion of social security and Medicare tax.

Please note the IRS deadline for filing Form 941 is April 30th, 2020. 

What Else Should You Know Before Applying? 

Applying for relief is easier if you’re prepared and know what to expect. Being organized and having the information required will make the process smoother.  

Don’t forget, you’re not the only one filing for assistance. There will be a lot of people applying for loans, so be prepared for website crashes and mail delays. Being aware can help prevent additional frustrations.

Have all the information you’ll need prepared ahead of time. To ensure the loan process goes smoothly means being organized. Make you have the following information:

  • Business details (start date, mailing address, EIN)
  • 1st Quarter IRS Form 941 to reflect the Employer’s Quarterly Federal Income Tax Return
  • Expense information to help determine loan size, including salaries of employees exceeding $100,000
  • 2019 profit/loss and balance sheet

Starting a business is hard enough, having to keep it floating during an unprecedented situation is even harder. PayWow is here to assist with your payroll questions and concerns now more than ever. Please don’t hesitate to contact our US-based support team anytime!

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