CARES Act

Originally published on April 14, 2020. Last updated as of the evening of May 25, 2020. Since the enactment of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) on March 27, 2020, the U.S. Small Business Administration (the “SBA”) and the U.S Treasury Department (“Treasury”) have issued a sizable number of rules and additional guidance to implement the CARES Act’s marquee small business loan component – the Paycheck Protection Program (the “PPP”). This up-to-date guide summarizes the key terms of the PPP, including with respect to the forgiveness aspect of the program, and addresses various issues and…
On March 27 and April 24, President Donald Trump signed the Coronavirus Aid, Relief and Economic Security, or CARES, Act, and the Paycheck Protection Program and Health Care Enhancement Act,[1] respectively, together providing roughly $2.5 trillion in relief for eligible businesses and governmental bodies affected by the COVID-19 pandemic, with specific provisions focused on the hospitality space. The CARES Act is comprised of multiple programs for very different kinds and sizes of businesses. To date, all programs envision loans and loan guaranties provided by the U.S. federal government to eligible businesses. While there are numerous programs addressing different industries…
On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act (“FFCRA”) (H.R. 6201), and on March 27, 2020, he signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) (H.R. 748). This alert summarizes certain loan and tax-related provisions of these new laws that are most relevant to nonprofit organizations.…
On May 4, 2020, the Federal Reserve published an updated set of Frequently Asked Questions (“FAQs”) concerning the Primary Market Corporate Credit Facility (the “PMCCF”) and Secondary Market Corporate Credit Facility (the “SMCCF”, and together with the PMCCF, the “CCFs”) established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).  The FAQs update previous FAQs issued on April 17, 2020 and clarify various terms of the program, including issuer eligibility, certification requirements and certain operational details. The SMCCF is expected to begin purchasing eligible ETFs in early May. The PMCCF is expected to launch and the SMCCF…
On May 4th, the IRS released a set of FAQs focused on the special coronavirus-related distribution (“CRD”) and plan loan options under the CARES Act (described here). To recap, the CARES Act allows expanded distribution options and favorable tax treatment for up to $100,000 of CRDs from eligible retirement plans (including section 401(k) and 403(b) plans, and IRAs), as well as an opportunity to repay the CRDs.  The Act also increases the limits for plan loans and allows certain loan repayments to be deferred by up to an additional year.  These opportunities are available only to individuals who…
On April 28, 2020, Treasury Secretary Mnuchin announced that companies that received loans of more than $2 million through the Paycheck Protection Program (“PPP”) of the CARES Act will be closely scrutinized.  Mr. Mnuchin’s announcement followed public outcry after reports surfaced that large, and even publicly-traded, companies received loans through the PPP, which can be forgiven if used for payroll and certain other expenses, such as commercial rent and utilities.  Mr. Mnuchin stated that any loan greater than $2 million would be subjected to a full review before being forgiven and that the Small Business Administration (“SBA”), the agency backing…
On April 9, 2020, the Federal Reserve announced additional programs under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) to provide up to $2.3 trillion in loans and other investments to support the U.S. economy. One of the programs established a new $600 billion Main Street Lending Program, aimed to ensure credit flows to small and mid-sized businesses that were in good standing before the COVID-19 pandemic (the “Main Street Lending Program” or “Program”). The Department of the Treasury will use funding from the $454 billion appropriated under Title IV, Section 4003(b)(4) of the CARES Act to…
Less than a month after passing the $2.0 trillion Coronavirus Aid, Relief, and Economic Security Act of 2020 (the “CARES Act”), Congress has passed and the President has signed a second round of aid (the Paycheck Protection Program and Health Care Enhancement Act, the “PPPHCEA”) that stakeholders in the health care industry can use to continue the fight against COVID-19 and stay in business until social distancing orders are loosened. Importantly, the PPPHCEA includes an infusion of an additional $75 billion to the Public Health and Social Services Emergency Fund (the “Provider Relief Fund”). Below we provide a summary of…
The U.S. Department of Labor (DOL) recently issued an update to its Unemployment Insurance Program Letter (UIPL) 16-20 to provide additional guidance on the CARES Act’s Pandemic Unemployment Assistance (PUA) program in response to questions submitted by states. As a quick refresher, PUA expands unemployment benefit coverage to certain workers who traditionally are not eligible for benefits under state law, such as individuals who are self-employed, are independent contractors or gig economy workers, or have limited work history, among others. These individuals may be eligible for PUA if they are unemployed, partially unemployed, or unable to work for certain reasons…
Originally published on April 2, 2020. Last updated as of April 29, 2020. On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act (H.R. 6201), and on March 27, 2020, he signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) (H.R. 748).  This alert summarizes certain tax-related provisions of these new laws as well as subsequent guidance from the Internal Revenue Service (the “IRS”) on these provisions. Sick and Family Leave Credits. Beginning April 1, 2020, private employers and nonprofit organizations with fewer than 500 employees are required to pay…
In a Q&A published this morning, the Small Business Administration (SBA) made some significant clarifications concerning the certification every PPP Borrower is required to make that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”  Noticeably, despite the fact that under the CARES Act, the SBA rule that a borrower be unable to obtain credit elsewhere does not apply to the PPP, the new guidance states that in making the certification, a borrower should take into account other sources of liquidity it has.  It also specifically notes that it is unlikely that a…
On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) (H.R. 748).  This blog post summarizes the tax provisions of the CARES Act, and has been updated to reflect subsequent guidance from the Internal Revenue Service (“IRS”) on these provisions. Economic Impact Payments.  The CARES Act provides a refundable tax credit for 2020 of $1,200 to individual filers with adjusted gross incomes of $75,000 or less (or $112,500 or less for a head of household), and $2,400 to married couples filing jointly with adjusted gross incomes of $150,000 or…
On April 9, 2020, the Federal Reserve announced additional programs under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) to provide up to $2.3 trillion in loans and other investments to support the U.S. economy. These actions include: Supplying liquidity to financial institutions participating in the Small Business Administration’s Paycheck Protection Program (the “PPP”) (for more information on the PPP, see here); Establishing a new $600 billion Main Street Lending Program, aimed to ensure credit flows to small and mid-sized businesses that were in good standing before the COVID-19 pandemic (the “Main Street Lending Program”) (for…
On April 9, 2020, the Federal Reserve released an updated term sheet for the Term Asset-Backed Securities Loan Facility (“TALF”). The TALF program, which was first announced on March 23, 2020, will provide a funding backstop for eligible asset-backed securities (“ABS”) issued on or after March 23, 2020.[1] The updated term sheet expands the asset classes that qualify as eligible collateral to include certain commercial mortgage-backed securities (“CMBS”), as well as newly issued static collateralized loan obligations (“CLOs”). The updated TALF program was announced along with a number of other programs under Title IV of the CARES Act, which…
On April 9, 2020, the Federal Reserve announced additional programs under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) to provide up to $2.3 trillion in loans and other investments to support the U.S. economy. These actions include: Supplying liquidity to financial institutions participating in the Small Business Administration’s Paycheck Protection Program (the “PPP”) (for more information on the PPP, see here); Expanding the size and scope of the Primary Market Corporate Credit Facility (the “PMCCF”), the Secondary Market Corporate Credit Facility, and Term Asset-Backed Securities Loan Facility, which will support up to $850 billion in…