CARES Act – Signed into Law

On Friday, March 27, President Donald Trump signed the “Coronavirus and Economic Security Act” (also known as the CARES Act) into law, after a voice-vote approval earlier that day by the U.S. House of Representatives and an unanimous vote by the U.S. Senate on Wednesday of last week. The CARES Act, estimated at $2.2T is the largest economic stimulus ever approved in the history of our country. The stimulus bill delivers extraordinary spending to confront the country’s disruption due to the COVID-19 pandemic, including cash payments to individual citizens, enhancements and expansions to unemployment benefits, a broad lending program for small businesses and targeted relief for hard-hit industries.

Here are some of the highlights:

Federal Loans and Grants for Businesses with Less Than 500 Employees

• available for employers that maintained their staff between February 15 and June 30, 2020.
• loan amount is 250% of average monthly payroll during that time frame, up to $10MM

Cash Assistance

• Individuals earning less than $75,000 per year will receive $1,200 plus $500 per child.
• Amount is prorated for individuals whose adjusted income in their most recent tax filing is over $75,000 and up to $99,000.
• Individuals whose adjusted gross income is over $99,000 are excluded.

Unemployment Benefits

• Individuals entitled to receive unemployment benefits would get an extra $600 per week for up to four months in addition to their state unemployment benefits, in an effort to make up for 100% of lost wages.
• It also expands the maximum time limit from 26 weeks to 39 weeks.

Loans to Select Industries ($500 billion)

• $58 billion in loans and grants for airlines
• reprieve on their three major excise taxes (ticket price, fuel, and cargo tax)
• $17 billion in loans and loan guarantees for businesses critical to maintaining national security
• $454 billion for loan and loan guarantees for eligible businesses, states, and municipalities

Financial Aid to Hospitals

• health care providers would receive grants for revenue lost by delaying elective surgeries and other procedures to focus on combatting the outbreak
• 20% increase in Medicare payments for treating patients with COVID-19

In addition, the CARES Act includes a host of other benefits and relief programs designed to help our schools, the agriculture industry, distilleries, food stamps, and child-nutrition programs, the postal service, and the cruise industry; to name a few.

As your trusted advisor, Walton is committed to staying on top of important developments and communicating important information that may impact the companies we serve as well as our business partners.

As always, don’t hesitate to contact us should you have any questions.