On March 27, the House of Representatives passed the “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act). The Senate had already passed the bill late Wednesday night, which means the stimulus package now goes to the President’s desk for his signature. The $2 trillion package is far-reaching in lawmakers’ attempts to mitigate the economic hardship that the coronavirus outbreak has inflicted. The bill includes the following provisions for businesses:
- $500 billion in corporate aid for ailing large industries
- $349 billion in forgivable small business loans
- Tax credit for businesses keeping idled workers on payroll, up to $5,000 per worker
Small business loans apply to businesses with less than 500 employees and are set at a maximum of $10 million. Expected loan amounts depend on the size of an employer’s payroll, but are intended to cover two and a half months of payroll costs. Loans can be used to fund salaries, employee benefits, interest payments, rents, etc. and can be forgiven, effectively turning these loans into grants. Restrictions on reducing employee headcount and pay levels apply in order to receive full loan forgiveness.
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