On Friday, March 27, the federal Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted. The goal of the new law is to boost the economy with provisions that will provide direct payments to individuals and relief for businesses, including provisions that will impact:
- Unemployment insurance.
- Business loans.
- Health insurance.
- Retirement savings.
- Employer-provided education assistance.
A key provision of the legislation establishes new loans to help employers continue to cover payroll costs and other expenses during the coronavirus crisis. The loans will be administered by the Small Business Administration and cover expenses from February 15 through June 30. The loans may be used for payroll costs, healthcare, rent, utilities and other debts incurred by the business. The definition of "payroll costs" excludes leave payments made under the new Families First Coronavirus Response Act (FFCRA). Reimbursement for those leave payments will be provide through tax credits.
We will be highlighting other provisions of the new legislation and providing updates on developments as they become available.
Feel free to contact us if you have questions about this matter.