FFCRA & CARES Act for Businesses

FFCRA & CARES Act for Businesses

In these unprecedented times the Federal Government has passed into law the Coronavirus, Aid, Relief and Economic Security (CARES) Act.  Below is a summary of the impact on Small Businesses. There are additional benefits for Retirement Plans and individual you may want to look in to, see our other blogs for those highlights as well.


1) Emergency and sick leave

a) Must have less than 500 Employees
b) Tax credits for refunding costs pertaining to business function

2) Emergency pay:

a) Scaling pay weeks 3 -12

3) Sick leave:

a) 80 hours or 2 weeks additional government covered sick leave (Government reimburses employer) if impacted by COVID-19
b)  Wage replacement $511 max per day self caring ($5110 total)
c) Wage replacement for another individual or child $200 max per day ($2,000 total)
d) Two weeks paid sick leave to Employees is refundable from tax credits…NOT a loan


4) Hardship withdrawals or loans from retirement plans:

a) Amend plan by December 31, 2022
b) Comply now
c) Take Employees at their word…no burden of proof for COVID-19 related loss


5) “Maybe/Maybe not” 30 day notice if need to pause Employer matching – if safe harbour:

a) If have economic loss for the year
b) No notice needed if not a safe harbor match



a) Employee Retention Credits

i) Fully or partially shut down because of COVID-19 OR

ii)The employer’s gross receipts are below 50% of the comparable quarter in 2019. Once the employer’s gross receipts go above 80% of a comparable quarter in 2019, they no longer qualify after the end of that quarter.

             a)  Credit: the amount of the credit is 50% of wages paid up to $10,000 in total.  Wages paid after March 12, 2020 and before January 1, 2021 are eligible for the credit.  Wages taken                        into account include a portion of the cost of employer provided health care.

    b) Credit adjust if you have <100 Employees or >100 Employees

b)Eligible employers (not utilizing the coronavirus loans) can qualify for a refundable credit against, generally, the employer’s 6.2% portion of the Social Security (OASDI) payroll tax

i) If your operations have been suspended for a quarter or you will experience a 50% drop in receipts in the quarter year over year

(1) You can continue to use the loan until this ration rises to 80% year over year coverage

c) Net Operating Loss:

i) For NOLs arising in tax years beginning before 2021, the CARES Act allows taxpayers to carryback 100% of NOLs to the prior five tax years, effectively delaying for carrybacks the 80% taxable income limitation and carryback prohibition until 2021.

ii) For tax years beginning after 2021, taxpayers will be eligible for: (1) a 100% deduction of NOLs arising in tax years before 2018, and (2) a deduction limited to 80% of taxable income for NOLs arising in tax years after 2017.


7) Loans: Paycheck Protection or Economic Injury Disaster Loans

a. <500 Employees

b. Retain workers, make payroll, pay mortgage/rent,

i. Interest rate cap depending on program

ii. No collateral

iii. Deferred payments 6-12 months

iv. 10 year payback period for non forgiven portions

v. Loan size: 2.5 times average monthly payroll costs for 12 month period or 10 million max

a. Up to $100,000 in wages per Employee

b. PTO, healthcare, insurance, state/local taxes, Employer 401k match, rent, utilities of a business

vi. Non-taxable loan forgiveness for these expenses:

a. Forgiveness reduced if do not maintain average Employees compared to this time 2019 OR if you reduce wages > 25%. A remedy to this is to re-hire someone

c. SBA loans through local bank:

i. Forgivable for payroll costs

ii. Rent

iii.Keeping business running

d. 8 week window now for forgivable purposes

e. For detailed information visit SBA.Gov



Sources: schulte and co cpas, https://www.napa-net.org/coronavirus-aid-relief-and-economic-security-cares-act-faqs,https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/how-the-cares-act-changes-health-retirement-and-student-loan-benefits.aspx, https://ferenczylaw.com/flashpoint-coronavirus-relief-from-congress-the-cares-act/?,



Written by:  Justin Hamlin, CFP® / Todd Rohrer


These are the opinions of Justin Hamlin and Todd Rohrer and not necessarily those of Cambridge, are for information purposes only, and should not be construed or acted upon as individualized investment advice.  Investing involves risk.  Depending on the types of investments, there may be varying degrees of risk.  Investors should be prepared to bear loss, including total loss of principal.  The strategies discussed herein are not designed based on the individual needs of any one specific client or investor.  In other words, it is not a customized strategy designed on the specific financial circumstances of the client.  However, prior to opening an account, Cambridge will consult with you to determine if your financial objectives are appropriate for investing in the model.  You are also provided the opportunity to place reasonable restrictions on the securities held in your account.