A lot of us have not yet felt the real economic impact of the pandemic. We have been living off of orders, receivables, and work that was in the door prior to the shutdown. However, it is only a matter of time before April and May catch up with us. For some, it already has.

I thought it might be helpful to remind you about some of the benefits of the CARES Act that you may have overlooked or forgotten in the midst of all the changes we have experienced. These benefits provide some relief for you and your business that might not mean much now, but could really help as we get further into the year.

For instance, you can take up to $100,000 out of your retirement plan (profit sharing, 401 (k), or IRA) for the financial consequences you have suffered because of the virus and not pay a 10% penalty tax if you are under 59½. You can either repay the amount to your plan over three years or take the amount into income over three years. You also have until September 27 to take a loan from your plan up to $100,000 or your vested account balance if less. If you need a cash infusion, this may be an easy and quick way to get it.

Don’t forget that the CARES Act defers payment of 100% of the employer share of the 6.2% Social Security tax on employee wages and 50% of the 12.4% tax on self-employment income. One-half of the deferred amount is payable by December 31, 2021, and the rest is payable by December 31, 2022. However, this deferral is not available if you take advantage of the partial loan forgiveness of your SBA guaranteed loan. This year you can also use your business losses to fully offset any business income (no 80% limitation), and if you realize a net operating loss for your business for the year, you can carry it back to offset business income for the preceding five taxable years. This could give you a refund if you paid taxes in those preceding years. If your business is a pass-through entity, you may also be able to file amended returns to deduct disallowed excess business losses in 2018 and 2019.

If your business winds up being highly leveraged in 2020, your business interest deduction is allowed up to 50% of your adjusted taxable income versus 30%. Also, if your business winds up having to make interior, non-load bearing building improvements in 2020 (regardless if due to the virus), you can take a 100% write-off of those improvements.

Finally, while not part of the CARES Act, Congress has declared the COVID-19 crisis to be a “qualified disaster” under the Internal Revenue Code. This means that your business can make tax-deductible payments to your employees to assist them with some of the expenses they have incurred as a result of the virus. Your employees don’t pay income or employment taxes on the payments. You have to establish a plan under IRS guidelines to set this up, but it gives you a tax-efficient way to assist your employees who may need help.