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A Summary of the Coronavirus Aid, Relief, and Economic Security (CARES) Act

So off to the president’s desk it goes! Today, the House joined the Senate in passing the $2 trillion coronavirus relief bill – the CARES Act. As the largest in US history, this aid brings welcome relief to many investors, businesses and Americans nationwide. If you are interested in reading the bill in its entirety, you can access it on the congress.gov website. I must warn you though, the PDF is 247 pages long.

If you prefer not to pore through a couple hundred pages of legislative-speak, I thought I’d compile a few of the highlights to share with you.

Several key groups are beneficiaries of the bill designed to help the economy begin its recovery from the coronavirus outbreak. These groups are: Small Businesses, Individuals, Corporations, State and Local government, Public Health, and Education. For today, I’ll focus on Small Business and Individuals.

Small Business

The primary benefits available to businesses with fewer than 500 employees are emergency grants and forgiveness loans.

Emergency Grants

Grants up to $10,000 are available to small businesses to help them cover their immediate operating costs.

Forgivable Loans

Loans are available through the Small Business Administration (SBA) for up to $10 million per business. This money can be used for payroll, rent or existing debt – provided workers stay employed through the end of June 2020. Nonprofits are also eligible to apply for this aid from the SBA.

Existing Loan Subsidy

There is about $17 billion included to subsidize six months of payments for businesses that already have SBA loans.

Tax Credit

The bill allows for a fully refundable tax credit for troubled businesses of all sizes to keep their employees on the payroll either through returning-to-work or paid furloughs.

The US Senate Committee on Small Business and Entrepreneurship has prepared a helpful guide on the CARES Act.

Individuals
One-Time Cash Payment

Americans with an adjusted gross income (AGI) of less than $75,000 on their 2018 or 2019 tax filing will receive a direct payment of $1,200. These one-time payments will be scaled downward for individuals with an AGI greater than $75,000 and less than $99,000. The income guide for joint filers is $150,000. Families will receive an additional $500 per child.

Individuals on social security who may not be required to file a tax return are also eligible. In those instances, the Social Security Administration will provide the necessary income details so payments may be made.

The treasury secretary indicated that the IRS will attempt to get payments out within three weeks of the bill being signed into law.

Unemployment Benefits

Workers who are on unemployment will receive $600 per week from the federal government, on top of to the amount they would ordinarily receive from their state. Also, the unemployment insurance timeframe has been extended by 13 weeks. Freelancers, contractors and the self-employed who ordinarily would not be covered by unemployment insurance now qualify for the benefit.

Please note that these benefits are subject to change depending on how many people file for unemployment.

Insurance

All private insurance is required to cover COVID-19 treatments and vaccine and makes all coronavirus testing free.

These are just a few of the highlights from the legislation. I’d like to give a special shout out to my sources: Foley and Lardner LLP, NPR and the Wisconsin Technology Council. As we learn more specific details on timing and how to apply to receive the relief funds, we’ll pass those along. In the meantime, we can collectively exhale knowing that help is on the way.

Stay the course. Stay strong. Stay healthy.