CARES Act

Coronavirus Aid, Relief and Economic Security


Employment

 

  • Federal funding for unemployment benefits including $600 per week for up to four months in addition to state benefits.
  • Expands definition of the types of workers who qualify for federal benefits to include individuals not otherwise covered by state unemployment compensation laws, such as independent contractors, the self-employed and gig economy workers.
  • Expands the definition of “eligible employees” under the FFCRA to include individuals who were: (1) laid off by their employer on or after March 1, 2020; (2) had worked for that employer for at least 30 days in the last 60 calendar days prior to the lay-off; and (3) were rehired by the employer.
  • Allows for advances on the tax credits called for by the FFCRA and penalty relief for a failure to deposit tax amounts if the failure was due to the anticipation of the tax credits. 
  • Those who have been prevented from working as a result of COVID-19 (for instance, those quarantined, or those whose places of employment have shut down by operation of a “safer at home” order) will receive the same unemployment compensation benefits as regular employees receive under applicable state law.
  • Taxpayers are entitled to direct tax rebates in the form of checks of up to $1,200 for individuals earning up to $75,000 per year or $2,400 for couples earning less than $150,000, plus $500 per child for qualifying taxpayers. Rebates are gradually scaled down until income thresholds of $99,000 per individual and $198,000 per couple are reached, at which point they are phased out entirely. 

https://www.dol.gov/coronavirus


Businesses 

 

  • $350 billion in funding for loans through the Small Business Administration (SBA) under the “Paycheck Protection Program.” 
  • Small businesses of 500 or fewer employees are eligible for zero-fee loans for which principal and interest is deferred for up to a year. 
  • Maximum loan amount is $10 million and is calculated for each eligible company as 2.5 times the company’s average monthly payroll costs for employees making less than $100,000. 
  • Loans are subject to forgiveness in an amount of up to 8 weeks of payroll, paid sick leave, insurance costs, mortgage, rent, utility payments, and other covered obligations.
  • Qualifying businesses and individuals must submit an application certifying that the uncertainty of current economic conditions necessitates the loan to support the business’s ongoing operations and that the funds will be used to retain workers and maintain payroll, and/or make mortgage payments, lease payments, and utility payments. 
  • Independent contractors, sole proprietors, and certain self-employed individuals are also eligible for loans.

https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources


Health

 

  • The bill requires all private insurance plans to cover COVID-19 treatments and vaccines and makes all coronavirus tests free.

 


Homeowners 

 

  • During the COVID-19 national emergency, a borrower with a federally backed mortgage loan experiencing financial hardship as a result of the emergency may obtain a forbearance of up to 180 days, regardless of delinquency status, which may be extended for an additional period of up to 180 days at the request of the borrower.
  • During such forbearance, no fees, penalties, or added interest shall be charged on delayed payments. Multifamily borrowers may also request forbearance for up to 30 days, with two additional 30-day extensions.
  • For the 60-day period beginning March 18, 2020, no servicer of a federally backed mortgage may initiate any foreclosure or execute a foreclosure-related eviction (except in the case of vacant or abandoned property). 

https://www.consumerfinance.gov/about-us/blog/guide-coronavirus-mortgage-relief-options/


Renters 

 

  • The Act prevents landlords from bringing actions to recover possession from a tenant for nonpayment of rent for certain federally insured or guaranteed housing for a period of 120 days.

https://www.consumerfinance.gov/about-us/blog/guide-coronavirus-mortgage-relief-options/#renters


Seniors 

 

  • If diagnosed with COVID-19 or experiencing adverse financial consequences as a result of the COVID-19 crisis, the CARES Act permits special disbursements and loans of up to $100,000 from 401k and other qualified retirement plans, waiving the normal 10% early withdrawal penalty. 
  • Any withdrawal amount required to be included in gross income may be spread out over a three-year period for this purpose.

https://acl.gov/news-and-events/announcements/supporting-community-living-during-covid-19-cares-act-and-civil


Students

 

  • The CARES Act automatically defers payments for federally owned student loans for six months, through September 30, 2020.
  • Students who drop out of school as a result of the coronavirus won’t have that time away from school deducted from their lifetime limits on subsidized loan and Pell Grant eligibility. Those students would also not be asked to pay back any grants or other aid they’ve already received.

 


More Resources

 

https://www.npr.org/2020/03/26/821457551/whats-inside-the-senate-s-2-trillion-coronavirus-aid-package

https://www.jdsupra.com/legalnews/the-federal-cares-act-what-you-need-to-85313/#_ftn1

https://www.uschamber.com/co/start/strategy/cares-act-small-business-guide