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CARES Act Summary

Coronavirus Aid, Relief, and Economic Security (CARES) Act: $2.2 Trillion Stimulus

This memo summarizes the components most relevant to Massachusetts of the federal “Phase 3” coronavirus relief signed into law on March 27, 2020. Analysis is preliminary and ongoing. Unless otherwise noted, all funding levels are national.

$367 Billion Small Business Interruption Loan Program:

  • Companies with 500 or fewer employees can apply for up to $10 Million in forgivable loans to maintain payroll.
  • Small businesses that pledge to keep their workers may also receive cash-flow assistance structured as federally guaranteed loans. Both through direct SBA loans and support to banks lending directly.


Direct Payments to Adults Below a Certain Income Threshold: 

  • One-time stipend of up to $1,200 per individual, $2,400 for joint filers, plus an additional $500 per child (up to $3,400 for a family of four).
    • Gradual phase out for those filing jointly earning above $150,000,  $115,000 for heads of household, and $75,000 for those filing individually.


Expanded Unemployment Insurance: Builds on Phase 2.

  • Additional $600/week (on top of current benefits) for 4 months, extra 13 weeks of benefits (39 in total), and funds first week waiting period.
  • Expands coverage to typically ineligible self-employed and contract workers through end of 2020.


$150 Billion in State and Local Stimulus Funds:

  • Allocated by state population with a minimum of $1.25 Billion for low-population states.
  • Per U.S. Treasury, CARES Act funds are for Covid19-related spending and cannot be used for lost revenues.


Business Tax Relief:

  • Temporarily increases interest expense deductions for businesses via an increase from the current 30% taxable income limit to 50% for 2019 and 2020.
  • Permit`s employers and the self-employed to defer employer share of Social Security tax (half due by the end of 2021, the remainder due by the end of 2022). 


$100 Million in Grants to States that Enact Short-Time Compensation Programs:

  • Designed to support activities such as creation of rapid response teams to advise employers, provide education or assistance to employers, and stand up automated systems.


$500 Billion Emergency Lending for Industries, Cities, and States:

  • Allows the Fed to buy up to $500 Billion in corporate and municipal securities – program details forthcoming.
  • Specifically, it includes corporate loans and loan guarantees of:
    • $29 Billion for the airline industry and airports
    • $17 Billion for businesses critical to national security


Transit Relief:

  • Estimated $800 Million for the MBTA and over $50 Million for MA regional transit authorities per FTA formula.


Delayed Disproportionate Share Hospital (DSH) Medicaid Payment Cuts: 

  • Cuts delayed through November 2020. This had been widely anticipated pre-Covid19


$350 Billion in Emergency Appropriations for Health Care and Social Services

  • Including medical response efforts, hospitals, health care services, education, housing, elections, public safety and low-income and public assistance programs.


REAL ID Deadline Extension for States:

Extends the deadline for states to comply with the REAL ID Act to September 3

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