CARES ACT: Coronavirus Aid, Relief, and Economic Security Act Summary

The CARES Act, passed by congress and signed into law on March 27, 2020 is aimed at providing economic relief for individuals and businesses that have been negatively impacted by the COVID-19 pandemic. The CARES act will provide the following:

  • Paycheck Protections Program
    • Provides forgivable loans to businesses that keep employees on payroll, retroactive to February 15, 2020.
    • Available through June 30, 2020.
    • Eligibility: Businesses with up to 500 employees, non-profits, some self-employed and independent contractors.
    • Requirements: Employers must keep employees on payroll.
  • Small Business Debt Relief Program
    • $17 billion for SBA to make principal and interest payments for SBA backed business loans (applies to new loans).
  • Economic Injury Disaster Loans (EIDL) or Grants
    • $562 million for SBA to provide financial support to businesses in need.
  • Employee Retention Tax Credit
    • 50% refundable payroll tax credit on wages paid, up to $100,000 during the COVID-19 crisis.
    • Available to employers whose business was disrupted as a result of COVID-19 shutdowns and had a decrease in gross receipts of 50% or more compared to prior year quarterly report.
    • Does not apply to businesses receiving PPP.

Unemployment Benefits

  • Pandemic Unemployment Assistance
    • Expands eligibility for unemployment benefits to self-employed, independent contractors, and those with limited work history.
    • Temporary program through December 31, 2020.
  • Supplemental Federal Pandemic Unemployment Compensation
    • Additional $600/week for any worker eligible for state or federal unemployment benefits.
    • Additional payments will last until July 31, 2020.
    • $360 million for the Department of Labor to invest in programs that provide training and support services for seniors, migrant farmworkers, dislocated workers, and homeless veterans.

Direct Payments to Americans

  • American taxpayers will receive a one-time direct deposit.
    • $1,200 for individual filers
    • $2,400 for joint filers
    • $500 additional per child
  • Based on 2019 tax returns.
  • Eligibility: Incomes up to $75,000 for individual filers and $150,000 for joint filers will receive full amount. Payment amount will decrease as income increases above $75,000 for individuals and $150,000 for joint filers. Incomes above $99,000 for individuals and $198,000 for joint filers will not be eligible.

Student Loans

  • Automatic payments will be suspended until September 30, 2020 for student loans held by the federal government.


  • $1.935 billion to allow public housing agencies to retain 3.2 million Section 8 voucher and public housing residents housed.
  • $1 billion for the continuation of contracts with private landlords.
  • $65 million elected for the elderly and persons with disabilities for rental assistance, service coordinators, and support services.
  • $65 million for Housing Opportunities for Persons with AIDS to maintain rental assistance and other support services.
  • $4 billion to address the COVID-19 impact on homeless individuals and families, and eviction prevention activities.
  • $5 billion for the Community Development Block Grant (CDBG) program.
  • $300 million for Native American Programs.


  • Temporary forbearance on federally backed mortgage loans.
  • Prohibits foreclosures on federally backed mortgage loans for 60 days, beginning March 18, 2020.
  • Credit protection for consumers who comply with modified mortgage agreements.

State and Local Government

  • $150 billion in a Coronavirus Relief Fund for state and city governments to cover expenses related to the COVID-19 crisis.
  • Allocated by population proportions.
  • 1.25 billion minimum for each state.

Health Insurance

  • All private insurance plans are required to cover COVID-19 treatments and vaccines.
  • Requires private insurance plans to make COVID-19 testing free.

Access to Retirement Funds

  • Waives 10% early withdrawal penalty on distributions used for coronavirus-related purposes up to $100,000. Withdrawals are still taxed, with taxes spread over three years, or the taxpayer has the three-year period to roll it back over.

The U.S. Senate Committee on Small Business and Entrepreneurship has compiled a detailed guide to the CARES Act for small businesses. The Small Business Owner’s Guide to the CARES Act can be found here.

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