CARES Act – Signed into Law
On Friday, March 27, President Donald Trump signed the “Coronavirus and Economic Security Act” (also known as the CARES Act) into law, after a voice-vote approval earlier that day by the U.S. House of Representatives and an unanimous vote by the U.S. Senate on Wednesday of last week. The CARES Act, estimated at $2.2T is the largest economic stimulus ever approved in the history of our country. The stimulus bill delivers extraordinary spending to confront the country’s disruption due to the COVID-19 pandemic, including cash payments to individual citizens, enhancements and expansions to unemployment benefits, a broad lending program for small businesses and targeted relief for hard-hit industries.
Here are some of the highlights:
Federal Loans and Grants for Businesses with Less Than 500 Employees
- available for employers that maintained their staff between February 15 and June 30, 2020.
- loan amount is 250% of average monthly payroll during that time frame, up to $10MM
- Individuals earning less than $75,000 per year will receive $1,200 plus $500 per child.
- Amount is prorated for individuals whose adjusted income in their most recent tax filing is over $75,000 and up to $99,000.
- Individuals whose adjusted gross income is over $99,000 are excluded.
- Individuals entitled to receive unemployment benefits would get an extra $600 per week for up to four months in addition to their state unemployment benefits, in an effort to make up for 100% of lost wages.
- It also expands the maximum time limit from 26 weeks to 39 weeks.
Loans to Select Industries ($500 billion)
- $58 billion in loans and grants for airlines
- reprieve on their three major excise taxes (ticket price, fuel, and cargo tax)
- $17 billion in loans and loan guarantees for businesses critical to maintaining national security
- $454 billion for loan and loan guarantees for eligible businesses, states, and municipalities
Financial Aid to Hospitals
- health care providers would receive grants for revenue lost by delaying elective surgeries and other procedures to focus on combatting the outbreak
- 20% increase in Medicare payments for treating patients with COVID-19
In addition, the CARES Act includes a host of other benefits and relief programs designed to help our schools, the agriculture industry, distilleries, food stamps, and child-nutrition programs, the postal service, and the cruise industry; to name a few.
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As always, don’t hesitate to contact us should you have any questions.