Key CARES Act Relief Provisions Available to Employers By Business Size

04.07.2020

The Coronavirus Aid, Relief, and Economic Security Act, or the “CARES Act,” incorporates more than $2 trillion in spending and tax relief aimed at bolstering the United States economy and funding a nationwide effort to stem the tide of COVID-19.

The CARES Act provides a catalogue of financial benefits to companies. Each company’s eligibility for certain programs will depend on a variety of factors, including the size of its workforce. The following is a summary of various key programs of financial relief available to companies based on their size. We are providing this for reference and general informational purposes, and it should not be substituted for individualized legal guidance in your specific case:

Relief for Businesses with Fewer than 100 Employees

EITHER Paycheck Protection Program (“PPP”) loans through the U.S. Small Business Administration (“SBA”) OR Employee Retention Tax Credits on payroll costs used to maintain the workforce during COVID-related economic hardship (but not both).
EITHER loan forgiveness for qualified payments during the first eight weeks after a PPP loan origination date OR deferral of social security payroll tax deposits due through the end of 2020 (but not both).
Tax credits for paid leave given to workers experiencing illness or caring for family members due to COVID-19 under the Families First Coronavirus Response Act (“FFCRA”).
EIDL Disaster Loans through the SBA at low interest rates to help weather economic hardship.
An emergency advance of up to $10,000 through the SBA’s Disaster Loan Program.
Increases in the Business Interest Deduction under the Internal Revenue Code (the “Tax Code”).
Modifications to Net Operating Losses (“NOLs”), including a five-year retroactive carryback for NOLs arising in tax years 2018, 2019, and 2020.
A massive expansion of Unemployment Insurance funding, allowing up to 39 weeks of unemployment, an additional $600 to weekly benefit amounts, and loosened eligibility rules.
A host of financial relief directly to workers, including individual tax rebates, relaxed 401k loan rules, and mortgage and rent relief.

Relief for Businesses with 101-499 Employees

EITHER PPP loans through the SBA OR Employee Retention Tax Credits on payments to furloughed employees during COVID-related economic hardship (but not both).
EITHER loan forgiveness for qualified payments during the first eight weeks after a PPP loan origination date OR deferral of social security payroll tax deposits due through the end of 2020 (but not both).
Tax credits for paid leave given to workers experiencing illness or caring for family members due to COVID-19 under the FFCRA.
EIDL Disaster Loans through the SBA at low interest rates to help weather economic hardship.
An emergency advance of up to $10,000 through the SBA’s Disaster Loan Program.
Increases in the Business Interest Deduction under the Tax Code.
Modifications to NOLs, including a five-year retroactive carryback for NOLs arising in tax years 2018, 2019, and 2020.
A massive expansion of Unemployment Insurance funding, allowing up to 39 weeks of unemployment, an additional $600 to weekly benefit amounts, and loosened eligibility rules.
A host of financial relief directly to workers, including individual tax rebates, relaxed 401k loan rules, and mortgage and rent relief.

500 Employees

EITHER PPP loans through the SBA OR Employee Retention Tax Credits on payments to furloughed employees during COVID-related economic hardship (but not both).
EITHER loan forgiveness for qualified payments during the first eight weeks after a PPP loan origination date OR deferral of social security payroll taxes due through the end of 2020 (but not both).
EIDL Disaster Loans through the SBA at low interest rates to help weather economic hardship.
An emergency advance of up to $10,000 through the SBA’s Disaster Loan Program.
A direct lending program for which Congress appropriated approximately $500 billion in the CARES Act for subsidized business loans to mid-sized businesses (500-10,000 employees).
Increases in the Business Interest Deduction under the Tax Code.
Modifications to NOLs, including a five-year retroactive carryback for NOLs arising in tax years 2018, 2019, and 2020.
A massive expansion of Unemployment Insurance funding, allowing up to 39 weeks of unemployment, an additional $600 to weekly benefit amounts, and loosened eligibility rules.
A host of financial relief directly to workers, including individual tax rebates, relaxed 401k loan rules, and mortgage and rent relief.

501-10,000 Employees

Employee Retention Tax Credits on payments to furloughed employees during COVID-related economic hardship.
Deferral of social security payroll tax deposits due through the end of 2020.
A direct lending program for which Congress appropriated approximately $500 billion in the CARES Act for subsidized business loans to mid-sized businesses (500-10,000 employees).
Increases in the Business Interest Deduction under the tax code.
Modifications to NOLs, including a five-year retroactive carryback for NOLs arising in tax years 2018, 2019, and 2020.
A massive expansion of Unemployment Insurance funding, allowing up to 39 weeks of unemployment, an additional $600 to weekly benefit amounts, and loosened eligibility rules.
A host of financial relief directly to workers, including individual tax rebates, relaxed 401k loan rules, and mortgage and rent relief.

More than 10,000 Employees

Employee Retention Tax Credits on payments to furloughed employees during COVID-related economic hardship.
Deferral of social security payroll tax deposits due through the end of 2020.
Increases in the Business Interest Deduction under the Tax Code.
Modifications to NOLs, including a five-year retroactive carryback for NOLs arising in tax years 2018, 2019, and 2020.
A massive expansion of Unemployment Insurance funding, allowing up to 39 weeks of unemployment, an additional $600 to weekly benefit amounts, and loosened eligibility rules.
A host of financial relief directly to workers, including individual tax rebates, relaxed 401k loan rules, and mortgage and rent relief.

The federal government’s extraordinary financial response to the COVID-19 pandemic presents an opportunity for companies to participate in several programs to meet their financial and operational needs. It is important to remember that the CARES Act is over 880 pages long, is paired with even more guidance from multiple government agencies, and its application and the programs it enables are evolving on an almost daily basis.

For more details on any of these programs and to evaluate your eligibility, please contact the authors of this article or your usual counsel at Atkinson, Andelson, Loya, Ruud & Romo for assistance in navigating this constantly shifting landscape.