What Does the CARES Act Mean for my Community? Answering your Questions with Congressman Paul Mitchell This webinar was conducted on March 31, 2020. Please visit our website for the most up to date information.
Questions? Mitchell.House.Gov/Contact 2
Recap of Coronavirus Bills Already Passed • Phase One: H.R. 6074 , Coronavirus Preparedness & Response Supplemental • Provided $8.3 billion to go toward purchasing essential equipment and supplies, assisting state and local health departments, making diagnostic tests more broadly available, and investing in vaccine development. • Phase Two: H.R. 6201 , Families First Coronavirus Response Act • Allocated $1.2 billion for free COVID-19 testing. • Established a mandatory paid sick leave program. • Provided emergency nutritional assistance for vulnerable populations. • Increased access to telehealth for Medicare beneficiaries. 3
What is the CARES Act? • The Coronavirus Aid, Relief, and Economic Security (CARES) Act is the third Coronavirus relief package passed by Congress and enacted by the President. • The goal of this legislation is to provide direct relief to individuals, families, and businesses who have been impacted by the Coronavirus Pandemic. 4
CARES Act Topline Summary • Provides direct financial assistance to middle-class Americans with a one time tax rebate of up to $1,200 for individuals/$2,400 for couples/$500 per children. • Creates a new loan program and makes additional resources available for small businesses so they can keep doors open and pay employees. • Stabilizes key national industries that will protect jobs and functions important to America’s economy. 5
CARES Act Topline Summary Cont. • Includes historic support for health care workers and hospitals who are fighting the virus. • Expands unemployment insurance to 4 months & makes it available for self-employed and independent contractors. • Directs funding to state and local governments so they can continue to combat the crisis. 6
Are State and Local Governments Eligible for Relief Funds? • Yes – 80% of funding in the appropriations division of the bill goes out through existing grants to support state, local, tribal, and community grantees. • Some programs included within the appropriations division of the CARES Act: • Community Development Block Grants - $5 billion • Homeless Grants - $4 billion • Disaster Relief Fund - $45 billion • Emergency Food and Shelter Grants - $200 million • First Responder (FIRE) Grants - $100 million • Emergency management Program Grants - $100 million • CDC Funding for State Public Health Departments - $1.5 billion 7
Income for American Families • The CARES Act assists individuals and families impacted by the Coronavirus through direct payments. • These are one-time tax rebate checks that eligible individuals will receive. Individuals must have a valid Social Security number to receive the credit. • The full credit amount ($1,200 individuals, $2,400 couples, $500 per child) is available for those with incomes at or below $75,000 individual/$112,500 head of household/$150,000 joint. • If you are a senior receiving social security or an individual with a disability, the IRS will use the SSA-1099 information to identify beneficiaries who many not otherwise file but are eligible to receive the credit. 8
Healthcare Assistance • The CARES Act rushes resources to hospitals, doctors and other front- line providers. It also expands the use of telehealth medicine to surge capacity and diagnose and treat patients in a safer and faster environment. • Personal Protective Equipment (PPE) and Vaccines • Appropriates $16 billion explicitly for the National stockpile for the purchase of medical supplies, equipment, and medicine to be distributed to states. • Provides $27 billion to Public Health and Social Services Emergency fund for developing and purchasing vaccines, therapeutics, diagnostics, and necessary medical supplies. • Community health centers on the front lines of testing and treating patients for COVID-19 would be eligible to receive $1.32 billion in supplemental funding. • Allows the FDA to quickly approve the use of new medication and treatments. 9
Healthcare Assistance Cont. • Direct Funding to Combat the Pandemic • $150 billion through a Coronavirus Relief Fund for making payments to States, Tribal governments, and units of local government. • $100 billion for hospitals and providers. • $4.3 billion for the Centers for Disease Control and Prevention (CDC). • $80 million for the Food and Drug Administration (FDA). • $706 million for the National Institute of Allergy and Infectious Diseases (NIAID). 10
Changes to Unemployment Insurance • The CARES Act expands unemployment insurance to cover more workers including self-employed and independent contractors, like gig workers and Uber drivers, who do not usually qualify for unemployment. • The bill provides $250 billion in funding for expansion of unemployment benefits. • Provides an additional $600 per week payment to each recipient of unemployment insurance or Pandemic Unemployment Assistance for up to four months. 11
What does the CARES Act do for Small Businesses? • Creates a new loan product within the SBA’s 7(a) Loan Program called the Paycheck Protection Program. • Provides grants and funding to offer training, counseling, and assistance to small businesses affected by COVID-19. • Expedites access to capital for small businesses who have applied for a small business Economic Injury Disaster Loan. 12
Paycheck Protection Program Loans • The program would provide cash-flow assistance through 100 percent federally guaranteed loans to employers who maintain their payroll during this emergency. • If employers maintain their payroll, the loans would be forgiven, which would help workers remain employed, as well as help affected small businesses and our economy snap-back quicker after the crisis. • Small businesses and other eligible entities will be able to apply if they were harmed by COVID-19 between February 15, 2020 and June 30, 2020. This program would be retroactive to February 15, 2020, in order to help bring workers who may have already been laid off back onto payrolls. Loans are available through June 30, 2020. 13
Small Business Debt Relief Program • This program will provide immediate relief to small businesses with non-disaster SBA loans, in particular 7(a), 504, and microloans. • Under it, SBA will cover all loan payments on these SBA loans, including principal, interest, and fees, for six months. • This relief will also be available to new borrowers who take out loans within six months of the President signing the bill into law. 14
Economic Injury Disaster Loans & Emergency Economic Injury Grants • These grants provide an emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19 within three days of applying for an SBA Economic Injury Disaster Loan (EIDL). • To access the advance, businesses first apply for an EIDL and then request the advance. The advance does not need to be repaid under any circumstance, and may be used to: • Keep employees on payroll • Pay for sick leave • Meet increased production costs due to supply chain disruptions • Pay business obligations, including debts, rent and mortgage payments 15
Small Business Tax Provisions • Employee Retention Credit for Employers Subject to Closure or Experiencing Economic Hardship • This provision would provide a refundable payroll tax credit for 50 percent of wages paid by eligible employers to certain employees during the COVID-19 crisis. • The credit is available to employers, including non-profits, whose operations have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings. The credit is also provided to employers who have experienced a greater than 50 percent reduction in quarterly receipts, measured on a year-over-year basis. • The credit is not available to employers receiving assistance through the Paycheck Protection Program. The credit is provided through December 31, 2020. 16
Small Business Tax Provisions Cont. • Delay of Payment of Employer Payroll Taxes • This provision would allow taxpayers to defer paying the employer portion of certain payroll taxes through the end of 2020, with all 2020 deferred amounts due in two equal installments, one at the end of 2021, the other at the end of 2022. • Payroll taxes that can be deferred include the employer portion of FICA taxes, the employer and employee representative portion of Railroad Retirement taxes (that are attributable to the employer FICA rate), and half of SECA tax liability. • Deferral is not provided to employers receiving assistance through the Paycheck Protection Program. 17
Small Business Counseling • If you, like many small business owners, need a business counselor to help guide you through this uncertain time, you can turn to your local Small Business Development Center (SBDC), Women’s Business Center (WBC), or SCORE mentorship chapter. • These resource partners, and the associations that represent them, will receive additional funds to expand their reach and better support small business owners with counseling and up-to-date information regarding COVID-19. 18
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