Just before midnight on Wednesday, the U.S. Senate passed a $2 trillion plan aimed at rescuing the nation from the current economic and health crisis. The package is expected to pass the U.S. House of Representatives on Friday and be signed by President Trump.
Click here for a comprehensive summary* of the key elements most relevant to the grower and shipper community, which includes provisions related to agriculture and the food supply, business loans and business taxes. The highlights are detailed below:
- $9.5 BILLION dedicated disaster fund to help farmers who are experiencing COVID-related financial losses including targeted support for specialty crop growers, as well as dairy and livestock farmers and local food producers (e.g. farmers markets).
- $14 BILLION to partially replenish the Commodity Credit Corporation (CCC). Federally capped at $30 billion in spending authority, CCC currently has roughly $8 billion left following the latest round of trade mitigation. CCC money has been used over the last few years at the discretion of USDA to assist farmers, including fruit and tree nut producers, impacted by the China trade war.
Business Loan Provisions
- Creates a new $350 BILLION business loan program administered by the Small Business Administration. This program provides 100% federally-backed loans to eligible businesses which will act as bridge loans to businesses during this crisis. The loans are subject to certain conditions and loan amounts are forgivable.
- WG’s summary covers additional business loan provisions, including which businesses are eligible, what the loan terms are, what the loans can be used to pay for, and what the conditions are for the loans to be forgiven.
Business Tax Provisions
- Employee Retention Credit: Provides for a one-year credit against the employer’s 6.2% portion of Social Security payroll taxes for any business that is forced to suspend or close operations due to the Coronavirus but that also continues to pay its employees during the shut-down.
- Delay of Payment of Employer Payroll Taxes: An employer that incurs its 6.2% share of Social Security tax in 2020 may 1) defer payment of that tax until 2021 and 2022, but 2) receive an immediate credit against those yet-to-be paid payroll taxes via the sum of the emergency medical leave credit, sick leave credit, and new employee retention credit. This deferral is not available to any business that has a payroll protection loan forgiven.
- WG’s summary covers additional business tax provisions, including changes to net operating loss, changes to business loss limitations, changes to business interest limitations and qualified improvement property.
*The intent of this summary document is to help you understand the changes to law as written by legislative text. For tax-related questions as they pertain to your business, please consult your tax professional.