The Coronavirus Aid, Relief and Economic Security (CARES) Act
What it is: U.S. Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act on March 27, and it was signed into law by the president on the same day. The estimated $2 trillion economic stimulus bill provides relief for American workers and small businesses.
What it provides: According to The Wall Street Journal, “the new law would provide loans and other disbursements to a wide portion of the economy, including direct payments to Americans and loans to large and small companies. The bill also greatly expands unemployment insurance to cover freelance and gig workers, refills drained state coffers and extends additional resources to health-care providers.” To learn details, be sure to go to the Small Business Administration (SBA) and/or the Department of Treasury.
In addition to traditional SBA funding programs, the CARES Act established several new temporary programs to address the COVID-19 outbreak. Learn about the funding options that may be available to you.
Who it impacts: The CARES Act will impact large and small businesses as well as freelance workers. Below are some frequently asked questions that are relevant to employers and employees in the golf industry.
- What does this mean for the golf industry? The golf industry and employees will benefit from the stimulus program. Unlike previous disaster assistance, certain businesses are not prohibited from assistance.
- How can I apply for a loan for my small business or facility?
For guidance on small business assistance, click here. We will provide updates on specific procedures for securing assistance.
- I’m an independent contractor. Am I eligible? Yes, assistance will be made available to independent contractors and self-employed individuals.
- How does this impact retirement? According to AIG Retirement Services, the CARES Act provides greater access to assets held in tax-qualified retirement plans and IRAs. Click here for the specific relief being provided and qualifications.
Provisions of the Bill
- Pandemic Unemployment Assistance: This section creates a temporary Pandemic Unemployment Assistance program through December 31, 2020 to provide payment to those not traditionally eligible for unemployment benefits (self-employed, independent contractors, those with limited work history, and others) who are unable to work as a direct result of the coronavirus public health emergency.
- Emergency Unemployment Relief for Governmental Entities & Nonprofit Organizations: This section provides payment to states to reimburse nonprofits, government agencies, and Indian tribes for half of the costs they incur through December 31, 2020 to pay unemployment benefits.
- Emergency Increase in Unemployment Compensation Benefits: This section provides an additional $600 per week payment to each recipient of unemployment insurance or Pandemic Unemployment Assistance for up to four months.
- Pandemic Emergency Unemployment Compensation: This section provides an additional 13 weeks of unemployment benefits through December 31, 2020 to help those who remain unemployed after weeks of state unemployment benefits are no longer available.
- Section 2108 – Temporary Financing of Short-Time Compensation Payments in States with Programs in Law: This section provides funding to support “short-time compensation” programs, where employers reduce employee hours instead of laying off workers and the employees with reduced hours receive a pro-rated unemployment benefit. This provision would pay 100 percent of the costs they incur in providing this short-time compensation through December 31, 2020.
- 2020 Recovery Rebates for Individuals: All U.S. residents with adjusted gross income up to $75,000 ($150,000 married), who are not a dependent of another taxpayer and have a work eligible social security number, are eligible for the full $1,200 ($2,400 married) rebate. In addition, they are eligible for an additional $500 per child. This is true even for those who have no income, as well as those whose income comes entirely from non-taxable means-tested benefit programs, such as SSI benefits. For most Americans, no action on their part will be required in order to receive a rebate check as IRS will use a taxpayer’s 2019 tax return if filed, or in the alternative their 2018 return.
- Delay of Payment of Employer Payroll Taxes: The provision allows employers and self-employed individuals to defer payment of the employer share of the Social Security tax they otherwise are responsible for paying to the federal government with respect to their employees. Employers generally are responsible for paying a 6.2-percent Social Security tax on employee wages. The provision requires that the deferred employment tax be paid over the following two years, with half of the amount required to be paid by December 31, 2021 and the other half by December 31, 2022. The Social Security Trust Funds will be held harmless under this provision.