Highlights of the Coronavirus Aid, Relief and Economic Security Act (CARES)
The House has passed and the President is expected to sign the CARES Act, which includes thousands of dollars in direct payments to most Americans, and significant loan packages designed to help keep small businesses and corporations afloat. View 883-page Act.
Here’s what’s in the bill:
- Recovery rebate: Americans will receive a one-time rebate of up to $1,200, and married couples will get $2,400, plus an additional $500 per child. Amounts are phased-out for incomes up to $75,000 for individuals and $150,000 for married couples. This is true even for those who have no income, as well as those whose income comes entirely from non-taxable, means-tested benefit programs, such as Social Security.
- Use of retirement funds: The bill waives the 10% early withdrawal penalty for distributions up to $100,000 for coronavirus-related purposes, retroactive to Jan. 1.
- Small businesses: $350 billion is being dedicated to prevent layoffs and business closures while workers have to stay home during the outbreak. Companies with 500 employees or fewer that maintain their payroll during coronavirus can receive up to 8 weeks of cash-flow assistance. If employers maintain payroll, the portion of the loans used for covered payroll costs, interest on mortgage obligations, rent, and utilities would be forgiven. For a regularly updated list of COVID-19 Business Loans and Disaster Relief Resources, CLICK HERE.
- The unemployed: The program’s $250 billion extended unemployment insurance program — “unemployment on steroids,” as Sen. Chuck Schumer calls it — expands eligibility and offers workers an additional $600 per week for four months, on top of what state programs pay. It also extends UI benefits through Dec. 31 for eligible workers. The deal applies to the self-employed and independent contractors.
- Hospitals and health care: The deal provides over $140 billion in appropriations to support the U.S. health system, $100 billion of which will be injected directly into hospitals. The rest will be dedicated to providing personal and protective equipment for health care workers, testing supplies, increased workforce and training, accelerated Medicare payments, and supporting the CDC, among other health investments.
- Coronavirus testing: All testing and potential vaccines for COVID-19 will be covered at no cost to patients.
- Large corporations: $500 billion will be allotted to provide loans, loan guarantees, and other investments, overseen by a Treasury Department inspector general. These loans will not exceed five years and cannot be forgiven.
- Airlines will receive $50 billion (of the $500 billion) for passenger air carriers, and $8 billion for cargo air carriers.
- Payroll taxes: The measure allows individuals to delay the payment of their 2020 payroll taxes until 2021 and 2022.
- States and local governments will get $150 billion, with $8 billion set aside for tribal governments.
- Agriculture: The deal would increase the amount the Agriculture Department can spend on its bailout program from $30 billion to $50 billion, according to a press release issued by Sen. John Hoeven (R-N.D.)
Go deeper:
- Read the 883-page Act.
We are here to help.
We will be issuing more detailed information on the CARES Act soon including small business assistance and available business loans and disaster relief. Also, look for upcoming COVID-19 related webinars.
Please visit the Warady & Davis LLP COVID-19 Resource Center for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600.
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