Washington Update: The CARES Act is Signed Into Law

Small Business Administration (SBA) Loans Client Webinar Friday at Noon ET

The following information was compiled in conjunction with Steptoe & Johnson LLP.

On March 27, 2020, President Trump signed into law “Phase Three” of the congressional response to the COVID-19 emergency. The legislation, titled the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), follows intense negotiations over the last week.
 
In addition to support for certain distressed segments of our economy, the CARES Act provides direct financial aid in the form of $1,200 checks for individuals earning less than $75,000 ($2,400 for married households earning less than $150,000) with an additional $500 per child. The Act additionally provides expanded unemployment insurance, financial support for state and local governments, a loan program for small businesses and not-for-profits, a payroll tax deferral for employers, and financial assistance to small businesses and certain industries.
 
To help you navigate the CARES Act, NFP and Steptoe & Johnson LLP have created a summary of the key provisions.

SBA Loans

Under the CARES Act, small businesses will soon have another financial assistance option. The Small Business Administration (SBA) has been directed to fund new loans to small businesses that will be partially or fully forgivable if proceeds are spent on qualifying expenses. These loans will be offered and administered by banks participating in the SBA program. While these loans are not yet available, they will become available in the coming weeks after the SBA provides guidance to the banks participating in the program. Thereafter, these special loans should be available to qualifying small businesses until June 30, 2020.

While the final parameters, terms and conditions of this loan program will be determined by the SBA and banks participating in this program, highlights of the expected SBA loan program are summarized in the Small Business Owners Guide to the CARES Act published by the US Senate Committee on Small Business & Entrepreneurship.

SBA Loans Client Webinar | Friday, April 3 | Noon ET
Join NFP for a webinar on Friday, April 3 from noon -1:30 ET, to uncover the ins and outs of the new SBA forgivable loan program (entitled the CARES Act Paycheck Protection Loan Program). This webinar will provide information on:

• Which companies are eligible
• How to apply
• The factors to consider in evaluating whether you would like to participate in the program

Moderator: Suzanne Spradley, Senior Vice President, Chief Compliance Officer, NFP
Speakers: Scott Sinder & Kate Jensen, Steptoe & Johnson, LLP

Register Here
Add to Calendar

Corporate Benefits

Benefits Compliance
The CARES Act also has several provisions relating to employee benefits, both on the health side and the retirement side, as well as a few miscellaneous provisions on fringe benefits (student loan repayment).
 
View this benefits compliance summary for more information.
 
Retirement
The CARES Act contains provisions meant to loosen access to money in retirement vehicles. It also contains provisions meant to alleviate certain retirement plan requirements, providing plan sponsors with the option to waive the 10% early withdrawal penalty on participant distributions of up to $100,000, increase participant loan limits, and suspend existing participant loan repayments for individuals impacted by COVID-19. In addition, the Act waives required minimum distributions to be paid in 2020, provides plan sponsors relief in delaying contribution due dates for defined benefit and money purchase pension plans, and empowers the Department of Labor with broad authority to extend certain notice deadlines.
 
For more information on the retirement provisions of the CARES Act, click here.

Individual Solutions

Life Insurance
While Congress was busy creating the CARES Act, the Treasury Department was not idle, issuing Notice 2020-18 to extend the tax filing and payment deadlines in 2020. Details are summarized here.