Federal — H.R. 748, signed into law by President Trump on March 27, 2020, enacts the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The bill is 880 pages and contains provisions aimed at providing relief for individuals and businesses negatively affected by the COVID-19 outbreak. Below are some of the highlights of the CARES Act:
Small Business Payroll Relief – The CARES Act allocates $349 billion for loans to small businesses to help them maintain their payroll. In general, businesses with fewer than 500 employees are eligible. Nonprofits are eligible as well. The maximum loan is $10 million. The funds can be used for certain expenses including payroll, mortgage and interest payments, rent, and utilities.
Economic Stabilization Loans – $500 billion is allocated for loans and guarantees for eligible businesses, states and municipalities. The loans are subject to a number of conditions including a business agreeing to cap the salaries of certain highly paid employees and officers, while mid-size businesses (those with 500 – 10,000 employees) must agree to, among other things, not buy back stock or pay dividends during the term of the loan plus one year thereafter and not layoff more than 10% of their workforce, outsource or offshore jobs during the term of the loan plus two years thereafter.
Unemployment Benefits – Eligibility for unemployment benefits is extended to workers affected by COVID-19 who would not otherwise be eligible. The duration of regular benefits is extended and benefit payments increased.
Employment Taxes – An Employee Retention Credit against employment taxes is created for eligible employers. In addition, employers can delay the payment of their share of the 2020 employment taxes.
Health Care Support – $140 billion is appropriated to support the US health care system.
Taxpayer Rebates – A rebate of $1,200 plus $500 per child is provided for individual taxpayers with incomes of up to $75,000 for single filers, $150,000 for joint filers, and $112,500 for head of household filers.
CARES Act Oversight – A Congressional oversight committee will be created as well as a new office of Special Inspector General for Pandemic Recovery.