This is the sixth in a series of Law in the Marketplace columns with practical tips on how to use federal and New Hampshire laws and orders to deal with the COVID-19 pandemic.

To date, the main federal law providing economic relief to business owners and businesses is the $2.2 trillion act signed by President Donald Trump on March 27 officially entitled the “Coronavirus Aid, Relief, and Economic Security Act,” but generally referred to as the “CARES Act.”

The CARES Act is 888 pages long and addresses many dozens of complex issues of great importance to businesses, business owners and employees.

However, of necessity, the Act was drafted under intense pressure and enacted in great haste. Thus, starting as soon as it was enacted, business owners, accountants and lawyers have raised numerous questions about the meaning of its provisions, and the U.S. Treasury Department and the IRS have been working hard to address these questions.

The most recent such effort is reflected in a set of answers to frequently asked questions (which I’ll simply refer to as the “FAQs”) entitled “Coronavirus-related relief for retirement plans and IRAs questions and answers.” You can access the FAQs at irs.gov.

If your company is an employer that sponsors and contributes to an employer retirement plan such as a section 401(k) or 403(b) plan, you may want to read the provisions of the FAQ that address your plan, contained mainly in Questions 8 through 12, and you may well want to discuss the significance of these provisions for you company with tax professional who advises you with respect to your plan.

However, there are many tens of thousands of New Hampshire businesses that are owned by sole proprietors and that have no employees. Many of these sole proprietorship owners save for their retirement through a type of federal tax-favored investment retirement account (an “IRA”) known as a “Simplified Employee Pension” IRA, generally referred to as a SEP-IRA.

If you are a sole proprietor with a SEP-IRA, you should read the provisions in the FAQs that address SEP-IRAs, mainly contained in Questions 1 through 7,and you, like the above employers, may want to address the FAQ provisions relevant to you with your adviser. Among the most important provisions in the FAQs relevant to individuals who have SEP-IRAs are these:

— As stated in Question 1, Section 2202 of the CARES Act provides for expanded distribution options and favorable tax treatment for up to $100,000 of coronavirus-related distributions from SEP-IRAs. In my April 5 “Law in the Marketplace” column, I suggested that, if their professional advisers agree, some sole proprietors who have SEP-IRAs may want to withdraw some or all of their funds in these accounts in order to help them deal with the impact of the pandemic on their businesses and their families.

— The answer to Question 3 in the FAQS contains several provisions defining who is a “qualified individual” under Section 2202 – i.e., an individual who can take advantage of the above CARES Act provisions. The broadest of these provisions is the following:

“You experience adverse financial consequences as a result of closing or reducing hours of a business that you own or operate due to SARS-CoV-2 or COVID-19” Tax professionals interpret this provision as providing that you may take advantage of the above CARES Act provisions if you anticipate that your business income will be significantly reduced because of the Coronavirus pandemic.

— Other significant FAQ answers for SEP-IRA holders provide, for example, that the 10% additional tax generally applicable to early distributions from SEP-IRAs by individuals under the age of 59 and 1/2 does not apply to Coronavirus-related distributions; that certain other favorable federal income tax rules apply to these distributions; and that,

subject to certain conditions, you may repay your distributions from your SEP-IRA and

thus avoid federal income tax on them.