Understanding the CARES Act COVID-19 Coronavirus update

Here are some of the major components of the historic relief package:

Help for families

• The bill would provide direct payments of up to $1,200 for most individuals and $2,400 for most married couples filing jointly with an extra $500 for each qualifying dependent 16 years old or younger.

If your adjusted gross income is less than $75,000 for single filers and $150,000 for joint filers, then you'll get the full amount. For every $100 you earn above those limits, though, the payment drops by $5. That means that for those with no children and income levels above $99,000 for singles and $198,000 for joint filers, heads of household with an AGI between $112,500 and $146,500. no stimulus check would come. Those with incomes between those levels would receive a reduced stimulus check payment.  No stimulus check would come above those amounts.

• Unemployment insurance benefits would be expanded, increasing the  available to workers who are part-time, self-employed or part of the gig economy. People who are still unemployed after state benefits end could get an additional 13 weeks of help. In PA, this could be over $1100 per week, per worker.
• Food assistance programs would get a boost as would programs to help low-income households avoid eviction and a program to improve internet access in rural areas.
• Homeowners with federally backed mortgages would be protected from foreclosures for as long as 180 days.
• Students with federal loans could suspend payments until October.
• Students receiving Pell grants who have to drop out because of coronavirus would not be penalized.
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Help for small businesses

• The bill would give small businesses access to a nearly $350 billion loan program to cover monthly expenses like payroll, rent and utilities. The loans would not have to be repaid if businesses maintained their workforce.

The eight weeks of assistance would be retroactive to Feb. 15, 2020 to help bring back workers who have already been laid off. Special provisions of the bill allow for loan forgiveness if small businesses (under 500 employees) retain workers or rehire workers, essentially turning the loans into grants. The money must be used for payroll and basic overhead.

The bill allocates $350 billion for the forgivable SBA loans, with a loan limit of $10 million. In addition, the legislation allocates $17 billion to a program intended to help cover six months of payments on current outstanding SBA loans. The bill also restricts use of the funds in some important ways. Companies receiving the special funds are barred from using them for stock buybacks, dividend payments or executive compensation for at least one year after the loans are no longer outstanding.

Help for corporations over 500 employees

• The package includes a financial lifeline to the hardest-hit industries, including passenger and cargo airlines. Another pot of money would be available to help other businesses for a combined $500 billion.
• Companies receiving assistance would be barred from raising the pay of certain executives.
• Any company receiving a government loan would be prohibited from buying back stocks while getting assistance as well for an additional year.
• Businesses controlled by the president, vice president, members of Congress and heads of federal agencies are not eligible for loans.
• Companies that kept on workers despite a significant loss of revenue could get a tax credit.

The bill provides other tax relief to businesses by deferring tax payments, increasing deductibility for interest expenses and allowing immediate expensing of qualified property improvements, especially for the hospitality industry. The bill also restricts use of the funds in some important ways. Companies receiving the special funds are barred from using them for stock Businesses which accept the loans must also retain at least 90 percent of their employees as of March 24 until Sept. 30 “to the extent practicable.” The loans cannot last longer than five years.

Buybacks, dividend payments or executive compensation for at least one year after the loans are no longer outstanding.

One specific provision directs loans to mid-sized businesses — defined as employing between 500 and 10,000 people — and nonprofits, where no payments on the loans will be due for six months. The loans will be subject to certain conditions, so applicants should read the fine print and be sure they are fully aware of all the requirements.

Businesses which accept the loans must also retain at least 90 percent of their employees as of March 24 until Sept. 30 “to the extent practicable. ”The loans cannot last longer than five years.

Help for health care providers

• Hospitals and medical centers would get billions to handle surging caseloads.
• Hospitals treating coronavirus patients would also get higher reimbursements form Medicare.  Hospitals could request accelerated payments from Medicare.
• Across-the-board Medicare cuts that were part of a previous deficit reduction agreement would be temporarily halted.
• Extra funding for the Defense Department includes money to deploy the National Guard and use the Defense Production Act to help fast-track production of needed medical supplies to combat the coronavirus.
• Rules on using and paying for telehealth services would be eased.
• Funding would increase for federal agencies to speed work on therapies and a possible coronavirus vaccine, among other activities.

Help for state and local governments

• The package includes $150 billion to help state and local governments, which have had major unanticipated expenses while losing revenue. States would get a minimum amount and other funds would be allocated through a population-based formula.
• Disaster relief funding that state and local governments can access as well as a popular funding program for local governments would also be boosted.
• Childcare programs would get a funding boost to help meet emergency staffing needs so health care workers and other critical workers will have childcare.

Help for the arts and non-profits

• Museums, libraries and arts organizations across the country, which have been closing because of the pandemic, could get a boost from grants to state arts and humanities organizations.
• The John F. Kennedy Center for the Performing Arts, which has been closed until May, would get $25 million so it can reopen its doors once the crisis is over.
• The Smithsonian Institution would get $7.5 million to help with teleworking, deep cleaning and overtime for security, medical staff, and zookeepers.

For the entire “CARES Act 2020”

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

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