The Coronavirus Aid, Relief, and Economic Security (CARES) Act

Download Details on Congress' Reponse to the Coronavirus Crisis

On March 27, Congress overwhelmingly passed its third major bipartisan bill designed to provide relief to Americans in the wake of the COVID-19 pandemic called the Coronavirus Aid, Relief, and Economic Security (CARES) Act (H.R. 748). The President immediately signed the bill into law that same day as Public Law No. 116-136.

The CARES Act includes, among other things, extensive monetary relief to support small business operations, including eligible small and solo law firms, and direct payments to eligible Americans and workers to help them through this national emergency. It also includes items relevant to ABA advocacy efforts on behalf of our members and the legal profession. Ten of the Act’s most significant provisions are highlighted below:

1.      Immediate tax rebates to individuals, including $1,200 for each adult and $500 for each child under 17, beginning to phase out at an annual income of $75,000 for an individual and $150,000 for a household, with a complete phase out for individuals earning $99,000 or more and households earning $198,000 or more.

2.      More than $375 billion in small business relief, including $349 billion for forgivable loans to most organizations with less than 500 employees to help them pay their employees and keep them on the payroll. Every dollar from the eight-week period after the origination of the loan that is spent on payroll, utilities, rent, or interest on mortgage debt will be forgiven.

3.      $260 billion in dramatically expanded unemployment benefits, including an additional $600 per week for the next four months, providing an additional 13 weeks of federally funded benefits, and expanding eligibility to include self-employed workers.

4.      Emergency funding of $50 million for the Legal Services Corporation to help address the increasing legal needs of low-income Americans caused or made worse by the coronavirus.

5.      Suspension of federal student loan repayment obligations for borrowers until September 30, 2020, during which time interest does not accrue and borrowers get credit as if they had made the payments -- including for the purposes of the PSLF program. The law also gives an income exclusion to employers who make payments during the rest of this year of employee student loan obligations to a lender or directly to an employee to cover qualifying loans.

6.      Over $7.5 million to support mission critical activities of the federal courts and their staffs, plus another $1 million for Defender Services so they can continue representing clients without disruption.

7.      More than $7 billion for affordable housing and homelessness assistance programs to help low-income and working Americans avoid evictions and foreclosures, and minimize impacts caused by loss of employment, childcare, or other unforeseen circumstances related to COVID-19.

8.      Election assistance funding of $400 million to help states to prepare for and respond to coronavirus, domestically or internationally, for the 2020 Federal election cycle.

9.      Bureau of Prisons funding of $100 million for urgent needs like access to personal protective equipment, COVID-19 testing materials, home detention, electronic monitoring, and other alternatives to incarceration to improve prison conditions, plus $850 million in expedited Byrne-JAG grant funding to state and local police departments and jails for local health protection needs.

10.  $100 million for grants to increase broadband access in rural communities where at least 90% of households do not have adequate broadband, plus $25 million to expand broadband for distance learning and telemedicine to increase access to telecommunications, audio, and video information for households in rural communities’ and for professionals providing services to these communities, including mental health services to isolated veterans.

More resources:

• Coronavirus Impact on Small Businesses
• Summary of the Paycheck Protection Program
• Paycheck Protection Program FAQs (Senate Committee on Small Business & Entrepreneurship)
• Summary of the Keeping American Workers Paid and Employed Act  (Senate Committee on Small Business & Entrepreneurship)
• Employee Retention Credit FAQs (Senate Banking Committee)
• Interim Guidance for the Paycheck Protection Program - April 14, 2020 (Small Business Administration)
• Interim Guidance for the Paycheck Protection Program- April 3, 2020 (Small Business Administration) 
  
• Paycheck Protection Program Loans FAQ (Department of the Treasury)

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