CARES Act

Originally published on May 4, 2020. Last updated as of November 23, 2020. The Federal Reserve Bank of Boston recently published updated Frequently Asked Questions for the Main Street Lending Program’s Business and Nonprofit Facilities to (1) provide guidance on the process for requesting certain modifications to loans made under the Business and Nonprofit Facilities, (2) clarify limits on restructuring underlying loan facilities before utilizing the Business and Nonprofit Facilities and (3) clarify the circumstances under which an underlying credit facility can be upsized and expanded to multiple co-borrowers under the Business and Nonprofit Facilities. This client alert describes the…
Originally published on April 14, 2020. Last updated as of October 9, 2020. On October 8, the SBA simplified the forgiveness process for PPP loans of $50,000 or less.  If your PPP loan was $50,000 or less, and your affiliates together have not borrowed $2,000,000 or more, your PPP loan is exempt from forgiveness reduction due to reductions in full-time equivalent (FTE) employees or in employee salary or wages and you can utilize a new Loan Forgiveness Application – SBA Form 3508S. This up-to-date guide summarizes the key terms of the PPP, including with respect to the forgiveness aspect…
Health care providers’ receipt of Coronavirus Aid, Relief, and Economic Security Act and Paycheck Protection Program and Health Care Enhancement Act funds creates significant areas of potential liability for providers as these programs continue to change and evolve. As an accompaniment to our full in-depth guide, this is an overview of tips that providers can employ to minimize the risk of such liability and shares concrete best practices for CARES Act and PPPHCEA-related funding compliance. Download Best Practices for CARES Act and PPPHCEA Compliance here.
CARES Act, Payroll Protection, and Medicare Advance Payment Programs This document was last updated on July 20, 2020 to reflect changes made by the Department of Health and Human Services to its existing guidance. In response to widespread cash flow issues resulting from the COVID-19 public health emergency, Congress enacted two key pieces of legislation: the CARES Act and the Paycheck Protection Program and Health Care Enhancement Act (“PPPHCEA”). This guide details the compliance and oversight implications stemming from health care providers’ receipt of COVID-19-related grants and loans through the various CARES Act and PPPHCEA funding programs. The terms and…
In Notice 2020-50, the IRS expanded eligibility for CARES Act distributions and loans, and provided additional guidance.  To recap (as described here), the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) added three types of distribution and loan flexibility under eligible retirement plans for certain “qualified individuals”: (1) “coronavirus-related distributions” (“CRDs”) up to $100,000 that are eligible for favorable tax treatment and generally may be repaid to the plan or an IRA within 3 years, (2) suspension for up to one year of loan repayments otherwise due from March 27, 2020, through December 31, 2020, and…
Originally published on April 2, 2020. Last updated as of June 9, 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 and has been updated to reflect subsequent guidance from the Internal Revenue Service (the “IRS”) on these provisions, and the Paycheck Protection Program Flexibility Act of 2020 (H.R. 7010). Sick and Family Leave Credits. Beginning April 1, 2020,…
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 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…
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…
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…