The NAB breaks down those provisions of the latest relief and stimulus funding approved by Washington that are of specific interest to broadcasters. Two of the most useful of those provisions are explained below. For full coverage of how broadcasters can benefit from this package, visit the NAB.
Small Business Administration Loan Program:
- Loan size of up to 250 percent of average monthly payroll up to $10 million
- Eligibility restricted to small businesses, nonprofits and veteran organizations with 500 or fewer employees, self-employed and “gig economy” individuals, as well as other specific industry sectors
- Forgivable where used for payroll, payroll related costs (continuation of benefits, separation, furlough assistance, employee leave, mortgage interest payments, rent, utilities) with some individual caps
- To the extent the loan is used for non-forgivable purposes (i.e. a mortgage principle payment), payments on the loan would be deferred at least six months and possibly longer at the direction of the lender
- The amount of the loan forgiven will be reduced proportionally by any reduction in employees retained compared to the prior year and reduced by the reduction in any pay of any employee beyond 25 percent of their prior year compensation
- Loans available immediately through existing SBA-certified lenders (banks, credit unions, etc.); SBA required to streamline process to bring additional lenders into program
Employee Retention Credit
- Employer payroll tax credit for 50 percent of wages paid after March 12, 2020 and before January 1, 2021 by employers severely impacted by the crisis
- The credit is available to employers whose
- operations were fully or partially suspended, due to a COVID-19-related shutdown order, or
- (2) gross receipts declined by more than 50 percent when compared to the same quarter in the prior year
- For employers with greater than 100 full-time employees, qualified wages are wages paid to employees when they are not providing services due to the COVID-19-related circumstances described above
- For eligible employers with 100 or fewer full-time employees, all employee wages qualify for the credit, whether the employer is open for business or subject to a shut-down order
- The credit is provided for the first $10,000 of compensation, including health benefits, paid to an eligible employee
This tax credit cannot be claimed if an employer is also claiming loans from the SBA 7(a) program