Title I: Keeping American Workers Paid and Employed Act

The Paycheck Protection Program

Most of the world is focused on the U.S. Congress as it expeditiously introduces and enacts financial aid legislation of historic proportions. Most small businesses in the U.S. have a particular interest in the CARES Act, particularly Title I entitled the "Keeping American Workers Paid and Employed Act." The real buzz, however, revolves around one immensely important aspect of Title I--the "Paycheck Protection Program." The Paycheck Protection Program enacts a new $350 billion SBA loan program for small businesses. Its aim is to maintain employment levels as our economy recovers from the unprecedented measures taken in response to the pandemic. But the real kicker regarding the Paycheck Protection Program is the reward to eligible businesses which retain employees and pay salaries and benefits at substantially the same levels paid prior to the virus outbreak. For the business that do, a substantial portion of the SBA loan becomes forgivable. Some details must still be hammered out (most likely through regulations that must be adopted by the SBA), but the language in the CARES Act is straight-forward. Here are some highlights of the Paycheck Protection Program:

• Who is eligible? In addition to "small business concerns" (as defined by the SBA), any business concernthat employees 500 or fewer employees, as well as self-employed individuals and sole proprietorships, non-profit organizations, veterans organizations, and certain Tribal business concerns. For purposes of counting toward the 500 employee limitation, the SBA has affiliation rules that combine separate companies for purposes of the employee count, which are still applicable to the Paycheck Protection Program, but the legislation waives the affiliation test with respect to businesses that are assigned a NAICS code beginning with 72 (i.e., food services) and those operating as a franchise that is assigned a franchise identifier code by the SBA.
• Who counts as an "employee"? All individuals employed on a full-time, part-time, or other basis.
• How much may a business borrow? 250% of the business’ average monthly payroll cost for the 1-year period immediately prior to the date of the loan, up to a maximum loan amount of $10 million.
• What is included in "payroll costs"? Salary, wages, and commissions (including cash tips) for employees who are paid at an annual rate of not more than $100,000, plus the costs of vacation, parental, family, medical or sick leave, group health care benefits, insurance premiums, retirement benefits, and State and local taxes assessed on the compensation of employees.
• What are the allowable uses of a covered loan? The funds must be used for payroll costs, salaries, commissions, costs of continued health care benefits and leave time, the business’ payment of interest on mortgage obligations (not principal or interest prepayment obligations), rent, utility costs, and interest on any other debt obligation incurred prior to February 15, 2020.
• Will the loan have to be personally guaranteed? No personal guarantee is required.
• What is the maximum interest rate? A "covered loan" (the term used to define loans under this specific program)shall not bear interest at rate that exceeds 4%.
• Can loan payments be deferred? Complete payment deferral of all principal interest and fees is available for 6 months to 1 year.
• How much of the covered loan may be forgiven? Basically, the amount a borrower spends during an 8-week period after the covered loan is originated on the aggregate of payroll costs, interest payments on mortgage or other debt that was originated prior to February 15, 2020, rent obligations that originated prior to February 15, 2020, and utility costs. Loan forgiveness cannot exceed the principal amount of the covered loan.
• Can the loan forgiveness amount be reduced? Yes, the loan forgiveness amount will be reduced proportionately if the employer fails to maintain the level of employees compared to the prior year, and if there is a reduction in pay to any employees in excess of 25% of the employee’s prior year compensation.
• Is the loan forgiveness taxable to the business? No, the Payroll Protection Program specifically provides that the amount of loan forgiveness is not considered taxable income as a cancellation of indebtedness.

This section is broken down into two (2) main areas: relief for individuals and relief for employers/businesses. The relief for individuals is primarily provided through rebates payable directly to individuals and changes to the tax code. The relief to businesses is provided by beneficial changes to the tax code, including the ability to amend prior years' tax returns.

Individual Provisions:

• Unemployment Insurance: Establishes the Relief for Workers Affected by Coronavirus Act, which 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. The Act authorizes an additional $600 per week payment to each recipient of unemployment insurance or Pandemic Unemployment Assistance for up to four months and an additional 13 weeks of unemployment benefits through December 31, 2020 to help those who remain unemployed after state unemployment benefits are no longer available. There are additional provisions regarding implementation and administration of "short-time compensation" and funding for state unemployment programs.
• Individual Rebates: All U.S. residents with adjusted gross income up to $75,000 ($150,000 married), who are not a dependent of another taxpayer, will be eligible for a $1,200 ($2,400 married) rebate (or payment) and an additional $500 per child rebate. This will be paid directly to the individual and it is anticipated that individuals will receive this payment automatically without any action on their part. The IRS will use a taxpayer's 2019 tax return (if filed), or in the alternative their 2018 return to determine eligibility and payment information. The rebate amount is reduced by $5 for each $100 that a taxpayer's income exceeds the $75,000 ($150,000 married) threshold. The amount is completely phased-out for single filers with incomes exceeding $99,000, $146,500 for head of household filers with one child, and $198,000 for joint filers with no children.
• Retirement Plans: The 10-percent early withdrawal penalty is waived for distributions up to $100,000 from qualified retirement accounts for coronavirus-related purposes made on or after January 1, 2020 and income attributable to such distributions would be subject to tax over three years, and the taxpayer may recontribute the funds to an eligible retirement plan within three years without regard to that year's cap on contributions. Further, the provision provides flexibility for loans from certain retirement plans for coronavirus-related relief. A coronavirus-related distribution is set forth in detail in the Act.
• Charitable Contributions: For 2020, Taxpayers can deduct up to $300 of cash contributions, whether they itemize their deductions or not and the limitations on deductions for charitable contributions by individuals who itemize, as well as corporations is increased as follows: Individuals - 50-percent of adjusted gross income limitation is suspended for 2020; Corporations - 10-percent limitation is increased to 25 percent of taxable income; Food inventory - limitation on deductions for contributions of food inventory increased from 15 percent to 25 percent.
• Student Loans: Employers may contribute up to $5,250 annually toward an employee's student loans, and such payment would be excluded from the employee's income. Applies to any student loan payments made by an employer on behalf of an employee after date of enactment and before January 1, 2021.

• Employee Retention Credit: Establishes a refundable payroll tax credit for 50% of wages paid by employers to employees during the COVID-19 crisis. The credit is available to employers whose (1) operations were fully or partially suspended, due to a COVID-19- related shut-down order, or (2) gross receipts declined by more than 50% when compared to the same quarter in the prior year. The credit is based on qualified wages paid to the employee. For employers with greater than 100 full-time employees, qualified wages are wages paid to employees when they are not providing services due to COVID-19-related circumstances. For eligible employers with 100 or fewer full-time employees, all employee wages qualify for the credit, whether the employer is fully operational or not. The credit is provided for the first $10,000 of compensation, including health benefits, paid to an eligible employee. The credit is provided for wages paid or incurred from March 13, 2020 through December 31, 2020.
• Payment of Employer Payroll Taxes: Employers and self-employed individuals are allowed 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. The deferred employment tax must be paid over the following 2 years, with half of the amount required to be paid by December 31, 2021 and the other half by December 31, 2022. Businesses that have debt forgiven pursuant to Paycheck Protection Program are not eligible for deferral.
• Net Operating Losses: Net operating losses (NOL) arising in a tax year beginning in 2018, 2019, or 2020 can be carried back five years. The provision also temporarily removes the taxable income limitation to allow an NOL to fully offset income.
• Limitation on Losses: Pass-through businesses and sole proprietors can now utilize excess business losses, including losses in a tax year beginning in 2018, 2019, or 2020.
• Minimum Tax Liability of Corporations: Accelerates the ability of companies to recover corporate alternative minimum tax (AMT) credits, and permitting companies to claim a refund now with respect to such credits.
• Limitation on Business Interest: Temporarily increases the amount of interest expense businesses are allowed to deduct on their tax returns, by increasing the 30% limitation to 50% of taxable income (with adjustments) for 2019 and 2020.
• Qualified Improvement Property: Enables businesses to write off immediately costs associated with improving facilities instead of having to depreciate those improvements over the 39-year life of the building. The term "qualified improvement property" will be amended to mean "any improvement made by the taxpayer to an interior portion of a building which is nonresidential real property if such improvement is placed in service after the date such building was first placed in service."

The section purports to address the supply shortages of medical products, drugs and equipment as well as supporting healthcare providers. This section also addresses education (including students, teachers and schools) and labor and employment laws. The provisions regarding healthcare supplies and workforce are primarily directed to the short-term response to the COVID-19 pandemic. The provisions on education include a deferral of student loan payments, principal, and interest for 6 months, through September 30, 2020, without penalty to the borrower for all federally owned loans. This is expected provide relief for over 95% of student loan borrowers. The provisions regarding labor and employment laws include amendments to the recently passed Families First Coronavirus Response Act. The key provisions are summarized as follows:

• Limitation on Paid Leave: Limitation stating an employer shall not be required to pay more than $200 per day and $10,000 in the aggregate for each employee under this section.
• Emergency Paid Sick Leave Limitation: Limitation stating an employer shall not be required to pay more than $511 per day and $5,110 in the aggregate for sick leave or more than $200 per day and $2,000 in the aggregate to care for a quarantined individual or child for each employee under this section.
• Paid Leave for Rehired Employees: Allows an employee who was laid off by an employer March 1, 2020, or later to have access to paid family and medical leave in certain instances if they are rehired by the employer. Employee would have had to work for the employer at least 30 days prior to being laid off.
• Advance Refunding of Credits: Authorizes Treasury to provide employers advance tax credits for required paid sick leave instead of having to be reimbursed on the back end.

Title III of the CARES Act includes provisions regarding payment for healthcare services, such as the addition of various telehealth services to the list of services that will be covered by Medicare.

This section of the Act adds $500 billion to Treasury's Exchange Stabilization Fund to provide loans, loan guarantees, and other investments to distressed businesses that are not otherwise assisted by the provisions of the Act. This is intended for larger businesses and industries, as opposed to the small business loan program discussed above. For example, $25 billion is set aside for passenger air carriers, $4 billion for cargo air carriers; and $17 billion for businesses important to maintaining national security. States and municipalities can potentially receive funds from the Treasury under this section.

Title IV also contains provisions regarding federally insured mortgages and tenants of buildings that are subject to federally insure mortgages. The Act prohibits foreclosures on all federally-backed mortgage loans for a 60-day period beginning on March 18, 2020 and provides up to 180 days of forbearance for borrowers of a federally-backed mortgage loan who have experienced a financial hardship related to the COVID-19 emergency (up to 90 days of forbearance for multifamily borrowers with a federally backed multifamily mortgage loan). Applicable mortgages included those purchased by Fannie Mae and Freddie Mac, insured by HUD, VA, or USDA, or directly made by USDA. Further, for 120 days, landlords are prohibited from evicting tenants of a rental unit or to charge fees, penalties, or other charges to the tenant related to nonpayment of rent where the landlord's mortgage on that property is insured, guaranteed, supplemented, protected, or assisted in any way by HUD, Fannie Mae, Freddie Mac, the rural housing voucher program, or the Violence Against Women Act of 1994.

Title I: Keeping American Workers Paid and Employed Act

The Paycheck Protection Program

Most of the world is focused on the U.S. Congress as it expeditiously introduces and enacts financial aid legislation of historic proportions. Most small businesses in the U.S. have a particular interest in the CARES Act, particularly Title I entitled the "Keeping American Workers Paid and Employed Act." The real buzz, however, revolves around one immensely important aspect of Title I--the "Paycheck Protection Program." The Paycheck Protection Program enacts a new $350 billion SBA loan program for small businesses. Its aim is to maintain employment levels as our economy recovers from the unprecedented measures taken in response to the pandemic. But the real kicker regarding the Paycheck Protection Program is the reward to eligible businesses which retain employees and pay salaries and benefits at substantially the same levels paid prior to the virus outbreak. For the business that do, a substantial portion of the SBA loan becomes forgivable. Some details must still be hammered out (most likely through regulations that must be adopted by the SBA), but the language in the CARES Act is straight-forward. Here are some highlights of the Paycheck Protection Program:

• Who is eligible? In addition to "small business concerns" (as defined by the SBA), any business concernthat employees 500 or fewer employees, as well as self-employed individuals and sole proprietorships, non-profit organizations, veterans organizations, and certain Tribal business concerns. For purposes of counting toward the 500 employee limitation, the SBA has affiliation rules that combine separate companies for purposes of the employee count, which are still applicable to the Paycheck Protection Program, but the legislation waives the affiliation test with respect to businesses that are assigned a NAICS code beginning with 72 (i.e., food services) and those operating as a franchise that is assigned a franchise identifier code by the SBA.
• Who counts as an "employee"? All individuals employed on a full-time, part-time, or other basis.
• How much may a business borrow? 250% of the business’ average monthly payroll cost for the 1-year period immediately prior to the date of the loan, up to a maximum loan amount of $10 million.
• What is included in "payroll costs"? Salary, wages, and commissions (including cash tips) for employees who are paid at an annual rate of not more than $100,000, plus the costs of vacation, parental, family, medical or sick leave, group health care benefits, insurance premiums, retirement benefits, and State and local taxes assessed on the compensation of employees.
• What are the allowable uses of a covered loan? The funds must be used for payroll costs, salaries, commissions, costs of continued health care benefits and leave time, the business’ payment of interest on mortgage obligations (not principal or interest prepayment obligations), rent, utility costs, and interest on any other debt obligation incurred prior to February 15, 2020.
• Will the loan have to be personally guaranteed? No personal guarantee is required.
• What is the maximum interest rate? A "covered loan" (the term used to define loans under this specific program)shall not bear interest at rate that exceeds 4%.
• Can loan payments be deferred? Complete payment deferral of all principal interest and fees is available for 6 months to 1 year.
• How much of the covered loan may be forgiven? Basically, the amount a borrower spends during an 8-week period after the covered loan is originated on the aggregate of payroll costs, interest payments on mortgage or other debt that was originated prior to February 15, 2020, rent obligations that originated prior to February 15, 2020, and utility costs. Loan forgiveness cannot exceed the principal amount of the covered loan.
• Can the loan forgiveness amount be reduced? Yes, the loan forgiveness amount will be reduced proportionately if the employer fails to maintain the level of employees compared to the prior year, and if there is a reduction in pay to any employees in excess of 25% of the employee’s prior year compensation.
• Is the loan forgiveness taxable to the business? No, the Payroll Protection Program specifically provides that the amount of loan forgiveness is not considered taxable income as a cancellation of indebtedness.

This section is broken down into two (2) main areas: relief for individuals and relief for employers/businesses. The relief for individuals is primarily provided through rebates payable directly to individuals and changes to the tax code. The relief to businesses is provided by beneficial changes to the tax code, including the ability to amend prior years' tax returns.

Individual Provisions:

• Unemployment Insurance: Establishes the Relief for Workers Affected by Coronavirus Act, which 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. The Act authorizes an additional $600 per week payment to each recipient of unemployment insurance or Pandemic Unemployment Assistance for up to four months and an additional 13 weeks of unemployment benefits through December 31, 2020 to help those who remain unemployed after state unemployment benefits are no longer available. There are additional provisions regarding implementation and administration of "short-time compensation" and funding for state unemployment programs.
• Individual Rebates: All U.S. residents with adjusted gross income up to $75,000 ($150,000 married), who are not a dependent of another taxpayer, will be eligible for a $1,200 ($2,400 married) rebate (or payment) and an additional $500 per child rebate. This will be paid directly to the individual and it is anticipated that individuals will receive this payment automatically without any action on their part. The IRS will use a taxpayer's 2019 tax return (if filed), or in the alternative their 2018 return to determine eligibility and payment information. The rebate amount is reduced by $5 for each $100 that a taxpayer's income exceeds the $75,000 ($150,000 married) threshold. The amount is completely phased-out for single filers with incomes exceeding $99,000, $146,500 for head of household filers with one child, and $198,000 for joint filers with no children.
• Retirement Plans: The 10-percent early withdrawal penalty is waived for distributions up to $100,000 from qualified retirement accounts for coronavirus-related purposes made on or after January 1, 2020 and income attributable to such distributions would be subject to tax over three years, and the taxpayer may recontribute the funds to an eligible retirement plan within three years without regard to that year's cap on contributions. Further, the provision provides flexibility for loans from certain retirement plans for coronavirus-related relief. A coronavirus-related distribution is set forth in detail in the Act.
• Charitable Contributions: For 2020, Taxpayers can deduct up to $300 of cash contributions, whether they itemize their deductions or not and the limitations on deductions for charitable contributions by individuals who itemize, as well as corporations is increased as follows: Individuals - 50-percent of adjusted gross income limitation is suspended for 2020; Corporations - 10-percent limitation is increased to 25 percent of taxable income; Food inventory - limitation on deductions for contributions of food inventory increased from 15 percent to 25 percent.
• Student Loans: Employers may contribute up to $5,250 annually toward an employee's student loans, and such payment would be excluded from the employee's income. Applies to any student loan payments made by an employer on behalf of an employee after date of enactment and before January 1, 2021.

• Employee Retention Credit: Establishes a refundable payroll tax credit for 50% of wages paid by employers to employees during the COVID-19 crisis. The credit is available to employers whose (1) operations were fully or partially suspended, due to a COVID-19- related shut-down order, or (2) gross receipts declined by more than 50% when compared to the same quarter in the prior year. The credit is based on qualified wages paid to the employee. For employers with greater than 100 full-time employees, qualified wages are wages paid to employees when they are not providing services due to COVID-19-related circumstances. For eligible employers with 100 or fewer full-time employees, all employee wages qualify for the credit, whether the employer is fully operational or not. The credit is provided for the first $10,000 of compensation, including health benefits, paid to an eligible employee. The credit is provided for wages paid or incurred from March 13, 2020 through December 31, 2020.
• Payment of Employer Payroll Taxes: Employers and self-employed individuals are allowed 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. The deferred employment tax must be paid over the following 2 years, with half of the amount required to be paid by December 31, 2021 and the other half by December 31, 2022. Businesses that have debt forgiven pursuant to Paycheck Protection Program are not eligible for deferral.
• Net Operating Losses: Net operating losses (NOL) arising in a tax year beginning in 2018, 2019, or 2020 can be carried back five years. The provision also temporarily removes the taxable income limitation to allow an NOL to fully offset income.
• Limitation on Losses: Pass-through businesses and sole proprietors can now utilize excess business losses, including losses in a tax year beginning in 2018, 2019, or 2020.
• Minimum Tax Liability of Corporations: Accelerates the ability of companies to recover corporate alternative minimum tax (AMT) credits, and permitting companies to claim a refund now with respect to such credits.
• Limitation on Business Interest: Temporarily increases the amount of interest expense businesses are allowed to deduct on their tax returns, by increasing the 30% limitation to 50% of taxable income (with adjustments) for 2019 and 2020.
• Qualified Improvement Property: Enables businesses to write off immediately costs associated with improving facilities instead of having to depreciate those improvements over the 39-year life of the building. The term "qualified improvement property" will be amended to mean "any improvement made by the taxpayer to an interior portion of a building which is nonresidential real property if such improvement is placed in service after the date such building was first placed in service."

The section purports to address the supply shortages of medical products, drugs and equipment as well as supporting healthcare providers. This section also addresses education (including students, teachers and schools) and labor and employment laws. The provisions regarding healthcare supplies and workforce are primarily directed to the short-term response to the COVID-19 pandemic. The provisions on education include a deferral of student loan payments, principal, and interest for 6 months, through September 30, 2020, without penalty to the borrower for all federally owned loans. This is expected provide relief for over 95% of student loan borrowers. The provisions regarding labor and employment laws include amendments to the recently passed Families First Coronavirus Response Act. The key provisions are summarized as follows:

• Limitation on Paid Leave: Limitation stating an employer shall not be required to pay more than $200 per day and $10,000 in the aggregate for each employee under this section.
• Emergency Paid Sick Leave Limitation: Limitation stating an employer shall not be required to pay more than $511 per day and $5,110 in the aggregate for sick leave or more than $200 per day and $2,000 in the aggregate to care for a quarantined individual or child for each employee under this section.
• Paid Leave for Rehired Employees: Allows an employee who was laid off by an employer March 1, 2020, or later to have access to paid family and medical leave in certain instances if they are rehired by the employer. Employee would have had to work for the employer at least 30 days prior to being laid off.
• Advance Refunding of Credits: Authorizes Treasury to provide employers advance tax credits for required paid sick leave instead of having to be reimbursed on the back end.

Title III of the CARES Act includes provisions regarding payment for healthcare services, such as the addition of various telehealth services to the list of services that will be covered by Medicare.

This section of the Act adds $500 billion to Treasury's Exchange Stabilization Fund to provide loans, loan guarantees, and other investments to distressed businesses that are not otherwise assisted by the provisions of the Act. This is intended for larger businesses and industries, as opposed to the small business loan program discussed above. For example, $25 billion is set aside for passenger air carriers, $4 billion for cargo air carriers; and $17 billion for businesses important to maintaining national security. States and municipalities can potentially receive funds from the Treasury under this section.

Title IV also contains provisions regarding federally insured mortgages and tenants of buildings that are subject to federally insure mortgages. The Act prohibits foreclosures on all federally-backed mortgage loans for a 60-day period beginning on March 18, 2020 and provides up to 180 days of forbearance for borrowers of a federally-backed mortgage loan who have experienced a financial hardship related to the COVID-19 emergency (up to 90 days of forbearance for multifamily borrowers with a federally backed multifamily mortgage loan). Applicable mortgages included those purchased by Fannie Mae and Freddie Mac, insured by HUD, VA, or USDA, or directly made by USDA. Further, for 120 days, landlords are prohibited from evicting tenants of a rental unit or to charge fees, penalties, or other charges to the tenant related to nonpayment of rent where the landlord's mortgage on that property is insured, guaranteed, supplemented, protected, or assisted in any way by HUD, Fannie Mae, Freddie Mac, the rural housing voucher program, or the Violence Against Women Act of 1994.

Title I: Keeping American Workers Paid and Employed Act

The Paycheck Protection Program

Most of the world is focused on the U.S. Congress as it expeditiously introduces and enacts financial aid legislation of historic proportions. Most small businesses in the U.S. have a particular interest in the CARES Act, particularly Title I entitled the "Keeping American Workers Paid and Employed Act." The real buzz, however, revolves around one immensely important aspect of Title I--the "Paycheck Protection Program." The Paycheck Protection Program enacts a new $350 billion SBA loan program for small businesses. Its aim is to maintain employment levels as our economy recovers from the unprecedented measures taken in response to the pandemic. But the real kicker regarding the Paycheck Protection Program is the reward to eligible businesses which retain employees and pay salaries and benefits at substantially the same levels paid prior to the virus outbreak. For the business that do, a substantial portion of the SBA loan becomes forgivable. Some details must still be hammered out (most likely through regulations that must be adopted by the SBA), but the language in the CARES Act is straight-forward. Here are some highlights of the Paycheck Protection Program:

• Who is eligible? In addition to "small business concerns" (as defined by the SBA), any business concernthat employees 500 or fewer employees, as well as self-employed individuals and sole proprietorships, non-profit organizations, veterans organizations, and certain Tribal business concerns. For purposes of counting toward the 500 employee limitation, the SBA has affiliation rules that combine separate companies for purposes of the employee count, which are still applicable to the Paycheck Protection Program, but the legislation waives the affiliation test with respect to businesses that are assigned a NAICS code beginning with 72 (i.e., food services) and those operating as a franchise that is assigned a franchise identifier code by the SBA.
• Who counts as an "employee"? All individuals employed on a full-time, part-time, or other basis.
• How much may a business borrow? 250% of the business’ average monthly payroll cost for the 1-year period immediately prior to the date of the loan, up to a maximum loan amount of $10 million.
• What is included in "payroll costs"? Salary, wages, and commissions (including cash tips) for employees who are paid at an annual rate of not more than $100,000, plus the costs of vacation, parental, family, medical or sick leave, group health care benefits, insurance premiums, retirement benefits, and State and local taxes assessed on the compensation of employees.
• What are the allowable uses of a covered loan? The funds must be used for payroll costs, salaries, commissions, costs of continued health care benefits and leave time, the business’ payment of interest on mortgage obligations (not principal or interest prepayment obligations), rent, utility costs, and interest on any other debt obligation incurred prior to February 15, 2020.
• Will the loan have to be personally guaranteed? No personal guarantee is required.
• What is the maximum interest rate? A "covered loan" (the term used to define loans under this specific program)shall not bear interest at rate that exceeds 4%.
• Can loan payments be deferred? Complete payment deferral of all principal interest and fees is available for 6 months to 1 year.
• How much of the covered loan may be forgiven? Basically, the amount a borrower spends during an 8-week period after the covered loan is originated on the aggregate of payroll costs, interest payments on mortgage or other debt that was originated prior to February 15, 2020, rent obligations that originated prior to February 15, 2020, and utility costs. Loan forgiveness cannot exceed the principal amount of the covered loan.
• Can the loan forgiveness amount be reduced? Yes, the loan forgiveness amount will be reduced proportionately if the employer fails to maintain the level of employees compared to the prior year, and if there is a reduction in pay to any employees in excess of 25% of the employee’s prior year compensation.
• Is the loan forgiveness taxable to the business? No, the Payroll Protection Program specifically provides that the amount of loan forgiveness is not considered taxable income as a cancellation of indebtedness.

This section is broken down into two (2) main areas: relief for individuals and relief for employers/businesses. The relief for individuals is primarily provided through rebates payable directly to individuals and changes to the tax code. The relief to businesses is provided by beneficial changes to the tax code, including the ability to amend prior years' tax returns.

Individual Provisions:

• Unemployment Insurance: Establishes the Relief for Workers Affected by Coronavirus Act, which 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. The Act authorizes an additional $600 per week payment to each recipient of unemployment insurance or Pandemic Unemployment Assistance for up to four months and an additional 13 weeks of unemployment benefits through December 31, 2020 to help those who remain unemployed after state unemployment benefits are no longer available. There are additional provisions regarding implementation and administration of "short-time compensation" and funding for state unemployment programs.
• Individual Rebates: All U.S. residents with adjusted gross income up to $75,000 ($150,000 married), who are not a dependent of another taxpayer, will be eligible for a $1,200 ($2,400 married) rebate (or payment) and an additional $500 per child rebate. This will be paid directly to the individual and it is anticipated that individuals will receive this payment automatically without any action on their part. The IRS will use a taxpayer's 2019 tax return (if filed), or in the alternative their 2018 return to determine eligibility and payment information. The rebate amount is reduced by $5 for each $100 that a taxpayer's income exceeds the $75,000 ($150,000 married) threshold. The amount is completely phased-out for single filers with incomes exceeding $99,000, $146,500 for head of household filers with one child, and $198,000 for joint filers with no children.
• Retirement Plans: The 10-percent early withdrawal penalty is waived for distributions up to $100,000 from qualified retirement accounts for coronavirus-related purposes made on or after January 1, 2020 and income attributable to such distributions would be subject to tax over three years, and the taxpayer may recontribute the funds to an eligible retirement plan within three years without regard to that year's cap on contributions. Further, the provision provides flexibility for loans from certain retirement plans for coronavirus-related relief. A coronavirus-related distribution is set forth in detail in the Act.
• Charitable Contributions: For 2020, Taxpayers can deduct up to $300 of cash contributions, whether they itemize their deductions or not and the limitations on deductions for charitable contributions by individuals who itemize, as well as corporations is increased as follows: Individuals - 50-percent of adjusted gross income limitation is suspended for 2020; Corporations - 10-percent limitation is increased to 25 percent of taxable income; Food inventory - limitation on deductions for contributions of food inventory increased from 15 percent to 25 percent.
• Student Loans: Employers may contribute up to $5,250 annually toward an employee's student loans, and such payment would be excluded from the employee's income. Applies to any student loan payments made by an employer on behalf of an employee after date of enactment and before January 1, 2021.

• Employee Retention Credit: Establishes a refundable payroll tax credit for 50% of wages paid by employers to employees during the COVID-19 crisis. The credit is available to employers whose (1) operations were fully or partially suspended, due to a COVID-19- related shut-down order, or (2) gross receipts declined by more than 50% when compared to the same quarter in the prior year. The credit is based on qualified wages paid to the employee. For employers with greater than 100 full-time employees, qualified wages are wages paid to employees when they are not providing services due to COVID-19-related circumstances. For eligible employers with 100 or fewer full-time employees, all employee wages qualify for the credit, whether the employer is fully operational or not. The credit is provided for the first $10,000 of compensation, including health benefits, paid to an eligible employee. The credit is provided for wages paid or incurred from March 13, 2020 through December 31, 2020.
• Payment of Employer Payroll Taxes: Employers and self-employed individuals are allowed 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. The deferred employment tax must be paid over the following 2 years, with half of the amount required to be paid by December 31, 2021 and the other half by December 31, 2022. Businesses that have debt forgiven pursuant to Paycheck Protection Program are not eligible for deferral.
• Net Operating Losses: Net operating losses (NOL) arising in a tax year beginning in 2018, 2019, or 2020 can be carried back five years. The provision also temporarily removes the taxable income limitation to allow an NOL to fully offset income.
• Limitation on Losses: Pass-through businesses and sole proprietors can now utilize excess business losses, including losses in a tax year beginning in 2018, 2019, or 2020.
• Minimum Tax Liability of Corporations: Accelerates the ability of companies to recover corporate alternative minimum tax (AMT) credits, and permitting companies to claim a refund now with respect to such credits.
• Limitation on Business Interest: Temporarily increases the amount of interest expense businesses are allowed to deduct on their tax returns, by increasing the 30% limitation to 50% of taxable income (with adjustments) for 2019 and 2020.
• Qualified Improvement Property: Enables businesses to write off immediately costs associated with improving facilities instead of having to depreciate those improvements over the 39-year life of the building. The term "qualified improvement property" will be amended to mean "any improvement made by the taxpayer to an interior portion of a building which is nonresidential real property if such improvement is placed in service after the date such building was first placed in service."

The section purports to address the supply shortages of medical products, drugs and equipment as well as supporting healthcare providers. This section also addresses education (including students, teachers and schools) and labor and employment laws. The provisions regarding healthcare supplies and workforce are primarily directed to the short-term response to the COVID-19 pandemic. The provisions on education include a deferral of student loan payments, principal, and interest for 6 months, through September 30, 2020, without penalty to the borrower for all federally owned loans. This is expected provide relief for over 95% of student loan borrowers. The provisions regarding labor and employment laws include amendments to the recently passed Families First Coronavirus Response Act. The key provisions are summarized as follows:

• Limitation on Paid Leave: Limitation stating an employer shall not be required to pay more than $200 per day and $10,000 in the aggregate for each employee under this section.
• Emergency Paid Sick Leave Limitation: Limitation stating an employer shall not be required to pay more than $511 per day and $5,110 in the aggregate for sick leave or more than $200 per day and $2,000 in the aggregate to care for a quarantined individual or child for each employee under this section.
• Paid Leave for Rehired Employees: Allows an employee who was laid off by an employer March 1, 2020, or later to have access to paid family and medical leave in certain instances if they are rehired by the employer. Employee would have had to work for the employer at least 30 days prior to being laid off.
• Advance Refunding of Credits: Authorizes Treasury to provide employers advance tax credits for required paid sick leave instead of having to be reimbursed on the back end.

Title III of the CARES Act includes provisions regarding payment for healthcare services, such as the addition of various telehealth services to the list of services that will be covered by Medicare.

This section of the Act adds $500 billion to Treasury's Exchange Stabilization Fund to provide loans, loan guarantees, and other investments to distressed businesses that are not otherwise assisted by the provisions of the Act. This is intended for larger businesses and industries, as opposed to the small business loan program discussed above. For example, $25 billion is set aside for passenger air carriers, $4 billion for cargo air carriers; and $17 billion for businesses important to maintaining national security. States and municipalities can potentially receive funds from the Treasury under this section.

Title IV also contains provisions regarding federally insured mortgages and tenants of buildings that are subject to federally insure mortgages. The Act prohibits foreclosures on all federally-backed mortgage loans for a 60-day period beginning on March 18, 2020 and provides up to 180 days of forbearance for borrowers of a federally-backed mortgage loan who have experienced a financial hardship related to the COVID-19 emergency (up to 90 days of forbearance for multifamily borrowers with a federally backed multifamily mortgage loan). Applicable mortgages included those purchased by Fannie Mae and Freddie Mac, insured by HUD, VA, or USDA, or directly made by USDA. Further, for 120 days, landlords are prohibited from evicting tenants of a rental unit or to charge fees, penalties, or other charges to the tenant related to nonpayment of rent where the landlord's mortgage on that property is insured, guaranteed, supplemented, protected, or assisted in any way by HUD, Fannie Mae, Freddie Mac, the rural housing voucher program, or the Violence Against Women Act of 1994.

Title I: Keeping American Workers Paid and Employed Act

The Paycheck Protection Program

Most of the world is focused on the U.S. Congress as it expeditiously introduces and enacts financial aid legislation of historic proportions. Most small businesses in the U.S. have a particular interest in the CARES Act, particularly Title I entitled the "Keeping American Workers Paid and Employed Act." The real buzz, however, revolves around one immensely important aspect of Title I--the "Paycheck Protection Program." The Paycheck Protection Program enacts a new $350 billion SBA loan program for small businesses. Its aim is to maintain employment levels as our economy recovers from the unprecedented measures taken in response to the pandemic. But the real kicker regarding the Paycheck Protection Program is the reward to eligible businesses which retain employees and pay salaries and benefits at substantially the same levels paid prior to the virus outbreak. For the business that do, a substantial portion of the SBA loan becomes forgivable. Some details must still be hammered out (most likely through regulations that must be adopted by the SBA), but the language in the CARES Act is straight-forward. Here are some highlights of the Paycheck Protection Program:

• Who is eligible? In addition to "small business concerns" (as defined by the SBA), any business concernthat employees 500 or fewer employees, as well as self-employed individuals and sole proprietorships, non-profit organizations, veterans organizations, and certain Tribal business concerns. For purposes of counting toward the 500 employee limitation, the SBA has affiliation rules that combine separate companies for purposes of the employee count, which are still applicable to the Paycheck Protection Program, but the legislation waives the affiliation test with respect to businesses that are assigned a NAICS code beginning with 72 (i.e., food services) and those operating as a franchise that is assigned a franchise identifier code by the SBA.
• Who counts as an "employee"? All individuals employed on a full-time, part-time, or other basis.
• How much may a business borrow? 250% of the business’ average monthly payroll cost for the 1-year period immediately prior to the date of the loan, up to a maximum loan amount of $10 million.
• What is included in "payroll costs"? Salary, wages, and commissions (including cash tips) for employees who are paid at an annual rate of not more than $100,000, plus the costs of vacation, parental, family, medical or sick leave, group health care benefits, insurance premiums, retirement benefits, and State and local taxes assessed on the compensation of employees.
• What are the allowable uses of a covered loan? The funds must be used for payroll costs, salaries, commissions, costs of continued health care benefits and leave time, the business’ payment of interest on mortgage obligations (not principal or interest prepayment obligations), rent, utility costs, and interest on any other debt obligation incurred prior to February 15, 2020.
• Will the loan have to be personally guaranteed? No personal guarantee is required.
• What is the maximum interest rate? A "covered loan" (the term used to define loans under this specific program)shall not bear interest at rate that exceeds 4%.
• Can loan payments be deferred? Complete payment deferral of all principal interest and fees is available for 6 months to 1 year.
• How much of the covered loan may be forgiven? Basically, the amount a borrower spends during an 8-week period after the covered loan is originated on the aggregate of payroll costs, interest payments on mortgage or other debt that was originated prior to February 15, 2020, rent obligations that originated prior to February 15, 2020, and utility costs. Loan forgiveness cannot exceed the principal amount of the covered loan.
• Can the loan forgiveness amount be reduced? Yes, the loan forgiveness amount will be reduced proportionately if the employer fails to maintain the level of employees compared to the prior year, and if there is a reduction in pay to any employees in excess of 25% of the employee’s prior year compensation.
• Is the loan forgiveness taxable to the business? No, the Payroll Protection Program specifically provides that the amount of loan forgiveness is not considered taxable income as a cancellation of indebtedness.

This section is broken down into two (2) main areas: relief for individuals and relief for employers/businesses. The relief for individuals is primarily provided through rebates payable directly to individuals and changes to the tax code. The relief to businesses is provided by beneficial changes to the tax code, including the ability to amend prior years' tax returns.

Individual Provisions:

• Unemployment Insurance: Establishes the Relief for Workers Affected by Coronavirus Act, which 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. The Act authorizes an additional $600 per week payment to each recipient of unemployment insurance or Pandemic Unemployment Assistance for up to four months and an additional 13 weeks of unemployment benefits through December 31, 2020 to help those who remain unemployed after state unemployment benefits are no longer available. There are additional provisions regarding implementation and administration of "short-time compensation" and funding for state unemployment programs.
• Individual Rebates: All U.S. residents with adjusted gross income up to $75,000 ($150,000 married), who are not a dependent of another taxpayer, will be eligible for a $1,200 ($2,400 married) rebate (or payment) and an additional $500 per child rebate. This will be paid directly to the individual and it is anticipated that individuals will receive this payment automatically without any action on their part. The IRS will use a taxpayer's 2019 tax return (if filed), or in the alternative their 2018 return to determine eligibility and payment information. The rebate amount is reduced by $5 for each $100 that a taxpayer's income exceeds the $75,000 ($150,000 married) threshold. The amount is completely phased-out for single filers with incomes exceeding $99,000, $146,500 for head of household filers with one child, and $198,000 for joint filers with no children.
• Retirement Plans: The 10-percent early withdrawal penalty is waived for distributions up to $100,000 from qualified retirement accounts for coronavirus-related purposes made on or after January 1, 2020 and income attributable to such distributions would be subject to tax over three years, and the taxpayer may recontribute the funds to an eligible retirement plan within three years without regard to that year's cap on contributions. Further, the provision provides flexibility for loans from certain retirement plans for coronavirus-related relief. A coronavirus-related distribution is set forth in detail in the Act.
• Charitable Contributions: For 2020, Taxpayers can deduct up to $300 of cash contributions, whether they itemize their deductions or not and the limitations on deductions for charitable contributions by individuals who itemize, as well as corporations is increased as follows: Individuals - 50-percent of adjusted gross income limitation is suspended for 2020; Corporations - 10-percent limitation is increased to 25 percent of taxable income; Food inventory - limitation on deductions for contributions of food inventory increased from 15 percent to 25 percent.
• Student Loans: Employers may contribute up to $5,250 annually toward an employee's student loans, and such payment would be excluded from the employee's income. Applies to any student loan payments made by an employer on behalf of an employee after date of enactment and before January 1, 2021.

• Employee Retention Credit: Establishes a refundable payroll tax credit for 50% of wages paid by employers to employees during the COVID-19 crisis. The credit is available to employers whose (1) operations were fully or partially suspended, due to a COVID-19- related shut-down order, or (2) gross receipts declined by more than 50% when compared to the same quarter in the prior year. The credit is based on qualified wages paid to the employee. For employers with greater than 100 full-time employees, qualified wages are wages paid to employees when they are not providing services due to COVID-19-related circumstances. For eligible employers with 100 or fewer full-time employees, all employee wages qualify for the credit, whether the employer is fully operational or not. The credit is provided for the first $10,000 of compensation, including health benefits, paid to an eligible employee. The credit is provided for wages paid or incurred from March 13, 2020 through December 31, 2020.
• Payment of Employer Payroll Taxes: Employers and self-employed individuals are allowed 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. The deferred employment tax must be paid over the following 2 years, with half of the amount required to be paid by December 31, 2021 and the other half by December 31, 2022. Businesses that have debt forgiven pursuant to Paycheck Protection Program are not eligible for deferral.
• Net Operating Losses: Net operating losses (NOL) arising in a tax year beginning in 2018, 2019, or 2020 can be carried back five years. The provision also temporarily removes the taxable income limitation to allow an NOL to fully offset income.
• Limitation on Losses: Pass-through businesses and sole proprietors can now utilize excess business losses, including losses in a tax year beginning in 2018, 2019, or 2020.
• Minimum Tax Liability of Corporations: Accelerates the ability of companies to recover corporate alternative minimum tax (AMT) credits, and permitting companies to claim a refund now with respect to such credits.
• Limitation on Business Interest: Temporarily increases the amount of interest expense businesses are allowed to deduct on their tax returns, by increasing the 30% limitation to 50% of taxable income (with adjustments) for 2019 and 2020.
• Qualified Improvement Property: Enables businesses to write off immediately costs associated with improving facilities instead of having to depreciate those improvements over the 39-year life of the building. The term "qualified improvement property" will be amended to mean "any improvement made by the taxpayer to an interior portion of a building which is nonresidential real property if such improvement is placed in service after the date such building was first placed in service."

The section purports to address the supply shortages of medical products, drugs and equipment as well as supporting healthcare providers. This section also addresses education (including students, teachers and schools) and labor and employment laws. The provisions regarding healthcare supplies and workforce are primarily directed to the short-term response to the COVID-19 pandemic. The provisions on education include a deferral of student loan payments, principal, and interest for 6 months, through September 30, 2020, without penalty to the borrower for all federally owned loans. This is expected provide relief for over 95% of student loan borrowers. The provisions regarding labor and employment laws include amendments to the recently passed Families First Coronavirus Response Act. The key provisions are summarized as follows:

• Limitation on Paid Leave: Limitation stating an employer shall not be required to pay more than $200 per day and $10,000 in the aggregate for each employee under this section.
• Emergency Paid Sick Leave Limitation: Limitation stating an employer shall not be required to pay more than $511 per day and $5,110 in the aggregate for sick leave or more than $200 per day and $2,000 in the aggregate to care for a quarantined individual or child for each employee under this section.
• Paid Leave for Rehired Employees: Allows an employee who was laid off by an employer March 1, 2020, or later to have access to paid family and medical leave in certain instances if they are rehired by the employer. Employee would have had to work for the employer at least 30 days prior to being laid off.
• Advance Refunding of Credits: Authorizes Treasury to provide employers advance tax credits for required paid sick leave instead of having to be reimbursed on the back end.

Title III of the CARES Act includes provisions regarding payment for healthcare services, such as the addition of various telehealth services to the list of services that will be covered by Medicare.

This section of the Act adds $500 billion to Treasury's Exchange Stabilization Fund to provide loans, loan guarantees, and other investments to distressed businesses that are not otherwise assisted by the provisions of the Act. This is intended for larger businesses and industries, as opposed to the small business loan program discussed above. For example, $25 billion is set aside for passenger air carriers, $4 billion for cargo air carriers; and $17 billion for businesses important to maintaining national security. States and municipalities can potentially receive funds from the Treasury under this section.

Title IV also contains provisions regarding federally insured mortgages and tenants of buildings that are subject to federally insure mortgages. The Act prohibits foreclosures on all federally-backed mortgage loans for a 60-day period beginning on March 18, 2020 and provides up to 180 days of forbearance for borrowers of a federally-backed mortgage loan who have experienced a financial hardship related to the COVID-19 emergency (up to 90 days of forbearance for multifamily borrowers with a federally backed multifamily mortgage loan). Applicable mortgages included those purchased by Fannie Mae and Freddie Mac, insured by HUD, VA, or USDA, or directly made by USDA. Further, for 120 days, landlords are prohibited from evicting tenants of a rental unit or to charge fees, penalties, or other charges to the tenant related to nonpayment of rent where the landlord's mortgage on that property is insured, guaranteed, supplemented, protected, or assisted in any way by HUD, Fannie Mae, Freddie Mac, the rural housing voucher program, or the Violence Against Women Act of 1994.

Title I: Keeping American Workers Paid and Employed Act

The Paycheck Protection Program

Most of the world is focused on the U.S. Congress as it expeditiously introduces and enacts financial aid legislation of historic proportions. Most small businesses in the U.S. have a particular interest in the CARES Act, particularly Title I entitled the "Keeping American Workers Paid and Employed Act." The real buzz, however, revolves around one immensely important aspect of Title I--the "Paycheck Protection Program." The Paycheck Protection Program enacts a new $350 billion SBA loan program for small businesses. Its aim is to maintain employment levels as our economy recovers from the unprecedented measures taken in response to the pandemic. But the real kicker regarding the Paycheck Protection Program is the reward to eligible businesses which retain employees and pay salaries and benefits at substantially the same levels paid prior to the virus outbreak. For the business that do, a substantial portion of the SBA loan becomes forgivable. Some details must still be hammered out (most likely through regulations that must be adopted by the SBA), but the language in the CARES Act is straight-forward. Here are some highlights of the Paycheck Protection Program:

• Who is eligible? In addition to "small business concerns" (as defined by the SBA), any business concernthat employees 500 or fewer employees, as well as self-employed individuals and sole proprietorships, non-profit organizations, veterans organizations, and certain Tribal business concerns. For purposes of counting toward the 500 employee limitation, the SBA has affiliation rules that combine separate companies for purposes of the employee count, which are still applicable to the Paycheck Protection Program, but the legislation waives the affiliation test with respect to businesses that are assigned a NAICS code beginning with 72 (i.e., food services) and those operating as a franchise that is assigned a franchise identifier code by the SBA.
• Who counts as an "employee"? All individuals employed on a full-time, part-time, or other basis.
• How much may a business borrow? 250% of the business’ average monthly payroll cost for the 1-year period immediately prior to the date of the loan, up to a maximum loan amount of $10 million.
• What is included in "payroll costs"? Salary, wages, and commissions (including cash tips) for employees who are paid at an annual rate of not more than $100,000, plus the costs of vacation, parental, family, medical or sick leave, group health care benefits, insurance premiums, retirement benefits, and State and local taxes assessed on the compensation of employees.
• What are the allowable uses of a covered loan? The funds must be used for payroll costs, salaries, commissions, costs of continued health care benefits and leave time, the business’ payment of interest on mortgage obligations (not principal or interest prepayment obligations), rent, utility costs, and interest on any other debt obligation incurred prior to February 15, 2020.
• Will the loan have to be personally guaranteed? No personal guarantee is required.
• What is the maximum interest rate? A "covered loan" (the term used to define loans under this specific program)shall not bear interest at rate that exceeds 4%.
• Can loan payments be deferred? Complete payment deferral of all principal interest and fees is available for 6 months to 1 year.
• How much of the covered loan may be forgiven? Basically, the amount a borrower spends during an 8-week period after the covered loan is originated on the aggregate of payroll costs, interest payments on mortgage or other debt that was originated prior to February 15, 2020, rent obligations that originated prior to February 15, 2020, and utility costs. Loan forgiveness cannot exceed the principal amount of the covered loan.
• Can the loan forgiveness amount be reduced? Yes, the loan forgiveness amount will be reduced proportionately if the employer fails to maintain the level of employees compared to the prior year, and if there is a reduction in pay to any employees in excess of 25% of the employee’s prior year compensation.
• Is the loan forgiveness taxable to the business? No, the Payroll Protection Program specifically provides that the amount of loan forgiveness is not considered taxable income as a cancellation of indebtedness.

This section is broken down into two (2) main areas: relief for individuals and relief for employers/businesses. The relief for individuals is primarily provided through rebates payable directly to individuals and changes to the tax code. The relief to businesses is provided by beneficial changes to the tax code, including the ability to amend prior years' tax returns.

Individual Provisions:

• Unemployment Insurance: Establishes the Relief for Workers Affected by Coronavirus Act, which 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. The Act authorizes an additional $600 per week payment to each recipient of unemployment insurance or Pandemic Unemployment Assistance for up to four months and an additional 13 weeks of unemployment benefits through December 31, 2020 to help those who remain unemployed after state unemployment benefits are no longer available. There are additional provisions regarding implementation and administration of "short-time compensation" and funding for state unemployment programs.
• Individual Rebates: All U.S. residents with adjusted gross income up to $75,000 ($150,000 married), who are not a dependent of another taxpayer, will be eligible for a $1,200 ($2,400 married) rebate (or payment) and an additional $500 per child rebate. This will be paid directly to the individual and it is anticipated that individuals will receive this payment automatically without any action on their part. The IRS will use a taxpayer's 2019 tax return (if filed), or in the alternative their 2018 return to determine eligibility and payment information. The rebate amount is reduced by $5 for each $100 that a taxpayer's income exceeds the $75,000 ($150,000 married) threshold. The amount is completely phased-out for single filers with incomes exceeding $99,000, $146,500 for head of household filers with one child, and $198,000 for joint filers with no children.
• Retirement Plans: The 10-percent early withdrawal penalty is waived for distributions up to $100,000 from qualified retirement accounts for coronavirus-related purposes made on or after January 1, 2020 and income attributable to such distributions would be subject to tax over three years, and the taxpayer may recontribute the funds to an eligible retirement plan within three years without regard to that year's cap on contributions. Further, the provision provides flexibility for loans from certain retirement plans for coronavirus-related relief. A coronavirus-related distribution is set forth in detail in the Act.
• Charitable Contributions: For 2020, Taxpayers can deduct up to $300 of cash contributions, whether they itemize their deductions or not and the limitations on deductions for charitable contributions by individuals who itemize, as well as corporations is increased as follows: Individuals - 50-percent of adjusted gross income limitation is suspended for 2020; Corporations - 10-percent limitation is increased to 25 percent of taxable income; Food inventory - limitation on deductions for contributions of food inventory increased from 15 percent to 25 percent.
• Student Loans: Employers may contribute up to $5,250 annually toward an employee's student loans, and such payment would be excluded from the employee's income. Applies to any student loan payments made by an employer on behalf of an employee after date of enactment and before January 1, 2021.

• Employee Retention Credit: Establishes a refundable payroll tax credit for 50% of wages paid by employers to employees during the COVID-19 crisis. The credit is available to employers whose (1) operations were fully or partially suspended, due to a COVID-19- related shut-down order, or (2) gross receipts declined by more than 50% when compared to the same quarter in the prior year. The credit is based on qualified wages paid to the employee. For employers with greater than 100 full-time employees, qualified wages are wages paid to employees when they are not providing services due to COVID-19-related circumstances. For eligible employers with 100 or fewer full-time employees, all employee wages qualify for the credit, whether the employer is fully operational or not. The credit is provided for the first $10,000 of compensation, including health benefits, paid to an eligible employee. The credit is provided for wages paid or incurred from March 13, 2020 through December 31, 2020.
• Payment of Employer Payroll Taxes: Employers and self-employed individuals are allowed 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. The deferred employment tax must be paid over the following 2 years, with half of the amount required to be paid by December 31, 2021 and the other half by December 31, 2022. Businesses that have debt forgiven pursuant to Paycheck Protection Program are not eligible for deferral.
• Net Operating Losses: Net operating losses (NOL) arising in a tax year beginning in 2018, 2019, or 2020 can be carried back five years. The provision also temporarily removes the taxable income limitation to allow an NOL to fully offset income.
• Limitation on Losses: Pass-through businesses and sole proprietors can now utilize excess business losses, including losses in a tax year beginning in 2018, 2019, or 2020.
• Minimum Tax Liability of Corporations: Accelerates the ability of companies to recover corporate alternative minimum tax (AMT) credits, and permitting companies to claim a refund now with respect to such credits.
• Limitation on Business Interest: Temporarily increases the amount of interest expense businesses are allowed to deduct on their tax returns, by increasing the 30% limitation to 50% of taxable income (with adjustments) for 2019 and 2020.
• Qualified Improvement Property: Enables businesses to write off immediately costs associated with improving facilities instead of having to depreciate those improvements over the 39-year life of the building. The term "qualified improvement property" will be amended to mean "any improvement made by the taxpayer to an interior portion of a building which is nonresidential real property if such improvement is placed in service after the date such building was first placed in service."

The section purports to address the supply shortages of medical products, drugs and equipment as well as supporting healthcare providers. This section also addresses education (including students, teachers and schools) and labor and employment laws. The provisions regarding healthcare supplies and workforce are primarily directed to the short-term response to the COVID-19 pandemic. The provisions on education include a deferral of student loan payments, principal, and interest for 6 months, through September 30, 2020, without penalty to the borrower for all federally owned loans. This is expected provide relief for over 95% of student loan borrowers. The provisions regarding labor and employment laws include amendments to the recently passed Families First Coronavirus Response Act. The key provisions are summarized as follows:

• Limitation on Paid Leave: Limitation stating an employer shall not be required to pay more than $200 per day and $10,000 in the aggregate for each employee under this section.
• Emergency Paid Sick Leave Limitation: Limitation stating an employer shall not be required to pay more than $511 per day and $5,110 in the aggregate for sick leave or more than $200 per day and $2,000 in the aggregate to care for a quarantined individual or child for each employee under this section.
• Paid Leave for Rehired Employees: Allows an employee who was laid off by an employer March 1, 2020, or later to have access to paid family and medical leave in certain instances if they are rehired by the employer. Employee would have had to work for the employer at least 30 days prior to being laid off.
• Advance Refunding of Credits: Authorizes Treasury to provide employers advance tax credits for required paid sick leave instead of having to be reimbursed on the back end.

Title III of the CARES Act includes provisions regarding payment for healthcare services, such as the addition of various telehealth services to the list of services that will be covered by Medicare.

This section of the Act adds $500 billion to Treasury's Exchange Stabilization Fund to provide loans, loan guarantees, and other investments to distressed businesses that are not otherwise assisted by the provisions of the Act. This is intended for larger businesses and industries, as opposed to the small business loan program discussed above. For example, $25 billion is set aside for passenger air carriers, $4 billion for cargo air carriers; and $17 billion for businesses important to maintaining national security. States and municipalities can potentially receive funds from the Treasury under this section.

Title IV also contains provisions regarding federally insured mortgages and tenants of buildings that are subject to federally insure mortgages. The Act prohibits foreclosures on all federally-backed mortgage loans for a 60-day period beginning on March 18, 2020 and provides up to 180 days of forbearance for borrowers of a federally-backed mortgage loan who have experienced a financial hardship related to the COVID-19 emergency (up to 90 days of forbearance for multifamily borrowers with a federally backed multifamily mortgage loan). Applicable mortgages included those purchased by Fannie Mae and Freddie Mac, insured by HUD, VA, or USDA, or directly made by USDA. Further, for 120 days, landlords are prohibited from evicting tenants of a rental unit or to charge fees, penalties, or other charges to the tenant related to nonpayment of rent where the landlord's mortgage on that property is insured, guaranteed, supplemented, protected, or assisted in any way by HUD, Fannie Mae, Freddie Mac, the rural housing voucher program, or the Violence Against Women Act of 1994.