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The Coronavirus Aid, Relief & Economic Act

posted March 27, 2020

The Coronavirus Aid, Relief & Economic Security (CARES) Act in Summary

Economic Development Funding

  • $1.5 billion for Economic Development Administration grants to support states and communities suffering economic injury as a result of COVID-19
  • $5 billion for Community Development Block Grant program to provide additional support for COVID-19 affected communities
  • $1 billion in lending authority for the Rural Business Cooperative Service for the USDA-RD Business and Industry Loan Guarantee Program

Manufacturing Extension Partnership

  • $50 million for small and medium-sized manufacturers across the country
  • Waives statutory cost-match requirements for all FY2020 funding

Unemployment Insurance Expansion 

  • $250 billion funding infusion for federal unemployment insurance program
  • Provides unemployed workers with an increase of $600 per week benefits for up to four months
  • Expands federal benefits to non-traditional recipients, including gig workers, independent contractors, etc
  • Funds an expanded 13 weeks of benefits through December 31, 2020

Paycheck Protection Program

  • $350 billion loan program for businesses under 500 employees suffering impacts due to economic crisis
  • Support payroll, mortgage interest payments, rent, and utilities from February 15th – June 30th
  • Loans capped at $10 million with ability to cover employees earning up to $100,000 in annual wages
  • Financing formula based on retention of employees versus same period in 2019

Recovery Rebate for Individuals

  • $1,200 refundable, non-taxable tax credit for individuals / $2,400 for joint taxpayers
  • Child tax credit of $500 per child
  • Sliding scale for individuals earning up to $100,000
  • Based on 2018 or 2019 tax returns

Economic Stabilization Financing

  • $500 billion in loans, loan guarantees, and credit facility mechanisms
  • Eligible financing for “seriously distressed and absolutely essential companies”
  • Participating businesses must not engage in stock buybacks and are required a retain a minimum of 90% of workforce
  • $454 billion will be controlled in a fund managed by the Federal Reserve
  • Remaining funds will be for targeted industries:
    • Up to $25 billion for airlines
    • Up to $4 billion for cargo air carriers
    • Up to $17 billion for businesses critical to maintaining national security

Small Business Loan Disaster Program 

  • Extension of financing support to businesses with less than 500 employees, independent contractors, and other entities
  • Waives certain rules for the program, including personal guarantees for loans of less than $200,000, timing, and credit availability tests, among others
  • Loans may be utilized for sick leave pay related to COVID-19, payroll, rent, mortgage, and dent repayments due to lost revenue
  • May be eligible for forgiveness based on employee retention formula and costs incurred

Employee Retention Credit

  • 50% refundable payroll tax credit for businesses affected by COVID-19 and suffering at least 50% loss in gross receipts from same quarter in previous year
  • Determined on qualified wages paid during economic crisis
  • If business has less than 100 employees, the credit can be for all employees
  • Allows for up to $10,000 in wages plus benefits paid per employee

Additional Business Tax Provisions 

  • Delay of employer-paid Social Security payroll tax payments
  • Allowance of net operation losses from 2018, 2019, or 2020 and suspension of 80% of taxable income limits

Coronavirus Relief Fund 

$150 billion for state and city expenditures related to COVID-1

Funding is allocated based on population formula

States will be allocated a minimum of $1.25 billion

http://sba.gov

https://www.congress.gov/bill/116th-congress/senate-bill/3548/text

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