Top takeaways from the CARES Act
The $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted on March 27, 2020. The CARES Act marks the largest economic relief package in our nation’s history. The following are the major takeaways from the Act that you need to know along with links to valuable resources that will help you take full advantage of its benefits.
Takeaway No. 1: Individuals
The Act provides economic support to individuals in response to the economic distress caused by the coronavirus (COVID-19) pandemic. It includes one-time payments for individuals and couples ($1,200 and $2,400, respectively) as well as $500 per child. The Act also creates a temporary Pandemic Unemployment Assistance program to provide payments to those not traditionally eligible for unemployment benefits. Additionally, the Act waives the 10% penalty on early withdrawals from retirement plans, and it provides relief from student loan debt.
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- Federal tax coronavirus resources
- State and local tax coronavirus resources
- Congress enacts CARES Act providing COVID-19 relief (March 28, 2020)
Takeaway No. 2: Small businesses
The Act establishes a program where eligible small businesses and not-for-profit organizations can apply for business interruption loans for expenses covering the period beginning Feb. 15, 2020, through June 30, 2020. In addition, the SBA’s Economic Injury Disaster Loan program is revised to include to sole proprietors, cooperatives and employee stock ownership plans (ESOPs).
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- Video: Accessing SBA loans through the CARES Act (March 30, 2020)
- The small business owner’s guide to the CARES Act (April 8, 2020)
- Small businesses and certain nonprofits eligible for forgivable bridge loans for payroll and other expenses under CARES Act (March 28, 2020)
Takeaway No. 3: Higher education
The Act provides temporary relief for federal student loan borrowers, and enables employers to provide a student loan repayment benefit to employees on a tax-free basis. It also authorizes the Secretary of Education to modify current allowable uses of funds for institutional grant programs so colleges and universities can re-deploy resources and services to COVID-19 efforts.
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Takeaway No. 4: Businesses, states and municipalities
The Act provides $500 billion to Treasury’s Exchange Stabilization Fund to provide loans, loan guarantees and other investments to businesses and state and local governments; $46 billion is available for passenger air carriers, air cargo carriers and businesses important to maintaining national security; and $454 billion may be used to support lending to eligible businesses, states and municipalities. The Act also provides $150 billion to states, territories and tribal governments to use for expenditures incurred due to the public health emergency with respect to COVID-19.
As the CARES Act and related programs are evolving, the SBA and other federal agencies are making determinations around qualification, administration and deployment of the $454 billion in funds for businesses. We are in the process of understanding such implications for entities that would be deemed mid-market or larger (> 500 employees) and we will be keep you informed of developments in real-time.
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- COVID-19 emergency funding programs available (March 23, 2020)
Takeaway No. 5: Telehealth
Expands telehealth services in Medicare, including services unrelated to COVID-19 treatments.
Takeaway No. 6: Medical devices and pharmaceuticals
The Act requires the strategic national stockpile to include certain types of medical supplies, and it provides permanent liability protection for manufacturers of personal respiratory protective equipment. The Act also requires drug manufacturers to submit more information when there is an interruption in supply, and requires manufacturers to maintain contingency plans to ensure a back-up supply of products.
