Business Impact of the CARES Act (Federal Stimulus Bill)
Small Business “Paycheck Protection Program”
- $349 billion with eligibility to:
- small businesses <500 employees, up to 1500 based on industry & revenue
- Accommodation & Food Services
- 501 (c) 3 charitable organizations with <500 employees
- Sole proprietors, self-employed, and independent contractors
- Regulatory Streamlining
- flexibility in lending, requirements
- Loan forgiveness in proportion maintaining payroll
Changes to SBA’s Economic Injury Disaster Loans (EIDLs)
- Loans available to nonprofits including 501 (c) 6s
- Loans based on credit scores
- Allows for cash advances for payroll support, supply chain disruption, mortgage or lease payments, or repaying obligations
Loan Programs and Credit Facilities
- $500 billion in loans and loan subsidies for air carriers, national security companies, lending institutions
Business Tax Provisions
- Employee Retention Tax Credits
- Delay Payroll Taxes
- defer payment of the employer share of the Social Security tax due between now and January 1, 2021 to December 31, 2021
(50% due) and December 31, 2020 (remaining due)
- defer payment of the employer share of the Social Security tax due between now and January 1, 2021 to December 31, 2021
- Modifications for net operating costs
- Accelerated AMT credits
- Modification of limitation on business interest
- Amendment to qualified improvement property
- Temporary exception from excise tax for alcohol used ot produce hand sanitizer
Pension and Employee Benefit Requirements
- Changes to deadlines, required minimum pension contributions, and benefit restrictions
Banking Relief, Mortgage, Forbearance, and Credit Reporting
- Relief from:
- accounting standards
- CECL standards
- forebearance requests from borrowers
Payments & Relief for Individuals
- Direct payments to taxpayers earning less than $75k, $150k filing jointly
Unemployment Programs
- Extend unemployment insurance by 13 weeks and include a four-month enhancement of benefits
- Those normally not eligible – ex. may have exhausted benefits
- Sets criteria for demonstrating unemployment due to the virus
- No one week waiting period for unemployment
Work Sharing Programs
- States enacting or with short-term compensation programs can get 100% federal reimbursement
- Sets other criteria
Paid Leave Changes
- Changes Phase 2 Bill that was just enacted to FMLA coverages (see page 7 of US Chamber’s document)
Health Care Provisions
- Many components for health care providers and insurance
Student Loans
- Defers payments, principals and interest until September 30
- Suspends defaults, garnishments and reporting to credit agencies
State and Local Aid
Provides $150 billion to states and local government based on each state’s population for the purpose of funding unforeseen expenses related to COVID-19.
Appropriations
$340 billion in new federal spending, 80% of which goes to state and local governments through:
- $20.5 mil for USDA Rural Business Cooperative Service
- $80 mil to the Food & Drug Admin
- $1.5 bil to the Economic Development Admin
- $50 mil to Manufacturing Extension Partnership (MEP)
- $6 mil to the National Institute for Innovation and Manufacturing
- $10 mil to the National Institute for Innovation in Manufacturing Biopharmaceuticals (NIMBL)
- $60 mil to the National Aeronautical and Space Agency (NASA)
- $2.45 bil for Defense Industrial Base
- $70 mil to the U.S. Army Corp of Engineers
- $562 mil to the Small Business Administration (SBA)
- $9.1 mil to Cybersecurity and Infrastructure
- $45 bil to the Federal Emergency Management Administration (FEMA)
- $453 million for the Bureau of Indian Affairs
- $7.2 mil for the Environmental Protection Agency (EPA)
- $1 bil for Indian Health Service
- $127 bil for the Public Health and Social Services Emergency Fund
- $4.3 bil to the Centers fo Disease Control
- $945.5 mil for the National Institute of Health (NIH)
- $30.9 bil for the Department of Education
- $19.6 bil for the Dept. of Veterans Affairs
- $353 mil for the U.S. Agency for International Development (USAID)
- $31.1 bil for the Dept. of Transportation
- $900 mil for Low Income Home Energy Assistance (LIHEAP)