On Friday, March 27, Congress gave final approval to the $2 Trillion Coronavirus Rescue Package (CARES Act) and the president signed it into law.
As with all complex legislation, we need time to digest all of the intricate details and will provide more specifics in the hours and days to come. For now, here is a high-level overview of what we know.
The relief package includes:
- Direct cash payments to Americans through the tax system
- Expanded unemployment insurance
- Paycheck protection programs to allow small businesses to retain their employees
- Loans and aid to businesses and hospitals
- Access to retirement funds without penalties for certain individuals
Among the key provisions:
- $300 billion in direct payments to Americans of $1,200 or less, per person, depending on their income level
- Families may also get payments of $500 per child
- $260 billion to scale-up the unemployment insurance program to include four months of coverage, an increased benefit of $600 per week and inclusion of nontraditional workers, like the self-employed, freelancers and gig workers
- Approximately $500 billion in loans and other money to major industries, such as the airlines.
- Some details surrounding these and the Small Business Administration loans need to be clarified and we will research these at greater length in the near future and provide more insight into them.
- $100 billion to hospitals responding to COVID-19 for equipment and personal protective equipment
- The ability for businesses to carry back net operating losses to obtain refunds
- Enhanced charitable contribution deduction benefits to individuals and businesses
We are actively analyzing the nearly 900 pages and will continue to dig into the specifics. We assure you we will send out more communication as the information becomes available. More importantly, as we learn more, we will be better able to advise you on how the CARES Act impacts you. Like all complex legislation, the implementation will evolve and we will help ensure that you and your business receive the optimum benefits available under this relief act.
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Our firm provides the information in this article for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other competent advisors. Before making any decision or taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this blog are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability and fitness for a particular purpose.