Below is a brief summary of some of the key provisions that will be most relevant for wineries. More information on these and other provisions in the CARES Act can be found
here and the
Wine Institute has a page with more info.
Small Business Paycheck Protection Program
This SBA loan forgiveness program is meant to help small businesses (fewer than 500 employees) impacted by the pandemic and economic downturn to make payroll and cover other expenses from Feb. 15 to June 30.
Notably, small businesses may take out loans up to $10 million—limited to a formula tied to payroll costs—and can cover employees making up to $100,000 per year.
Loans may be forgiven if a firm uses the loan for payroll, interest payments on mortgages, rent, and utilities.
Employee Retention Tax Credit
Employers are eligible for a
50% refundable payroll tax credit on wages paid up to $10,000 per employee during the crisis. It would be available to employers whose businesses were disrupted due to virus-related shutdowns and firms experiencing a decrease in gross receipts of 50% or more when compared to the same quarter last year.
Deferral of Payroll Taxes
Employer-side Social Security
payroll tax payments may be delayed until Jan. 1, 2021, with 50% owed on Dec. 31, 2021 and the other half owed on Dec. 31, 2022.
Expanded Net Operating Loss (NOL) Provisions
Firms may take
net operating losses (NOLs) earned in 2018, 2019, or 2020 and carry back those losses five years. The NOL limit of 80% of taxable income is also suspended, so firms may use NOLs they have to fully offset their taxable income. The bill also modifies loss limitations for non-corporate taxpayers, including rules governing excess farm losses.
Expanded Net Interest Deduction
The
net interest deduction limitation, which currently limits businesses’ ability to deduct interest paid on their tax returns to 30% of earnings before interest, tax, depreciation, and amortization (EBITDA), has been expanded to 50% of EBITDA for 2019 and 2020.
