CARES Act Pamphlet 

On March 27, the President signed legislation establishing $2,000,000,000,000 of assistance to businesses and families impacted by the Coronavirus.  The program appropriates $350,000,000,000 to fund subsidized and forgiveness eligible loans to small businesses (less than 500 employees) to be administered through the Small Business Administration’s 7A program as well as subsidized loans and programs for larger organizations.   Several key elements of these programs are summarized below.   
Reference Benefit Eligibility/Applicability Conditions/ Related Misc.

Section 1102 – Paycheck Protection Program

**Loan applications will be accepted until allotted funds are used or up to June 30, 2020. All SBA 7(a) lenders are able to make these loans. 

One-time Loan in amounts equal to 250% of the average monthly payroll from 2019 up to $10,000,000


Interest Rate will be 1% and

6 month payment deferral but interest will accrue from date of loan


No personal guarantees or collateral required 


Amts not forgiven due in 2 yrs


Program is not “Lender of last resort” (i.e. must not show to have been denied credit elsewhere) 

Business with less than 500 employees (see below for larger employers) 



  • Sole-proprietorship 
  • self-employed 
  • non-profits 

Employee Count for Food Service, hospitality and franchisees are based on each physical business location 


Employees include all full time, part time, etc.  

Funds can be used to cover payroll costs up to $8,333 per month per employee (“Eligible Wages”).


Excludes wages paid under Family Medical Leave or Paid Sick Leave  


May also use loan funds for rent or mortgage payments, utilities and to reduce other debt incurred between February and June 2020 


Cap on forgiveness of loan amounts not used for payroll at 25% of the loan amount

Section 1106 Forgiveness of Loans Made Pursuant to §1102 Forgiveness in the form of credit against loan balance for payroll, mortgage interest, rent and utilities paid during the 8 weeks following loan origination    Principal Forgiveness is reduced based on dividing the average number of full time employees employed during the 8 weeks following the loan origination and the average number of employees from periods of time (a) Feb. 15, 2019 to June 30, 2019; or (b) Jan. 1, 2020 to Feb. 29, 2020 and by any reduction in Eligible Wages of 25% or greater.
SBA Express Loans Increased loan amounts to $1,000,000 for “Disaster Assistance Loans” Business must be at least 24 mos old.  Credit scoring etc.

Same conditions as previous SBA express loans.

Disaster loan taken out after Feb 15 can be converted to PPP Loans

Reference Benefit Eligibility/Applicability Conditions/ Related Misc.
Section 1110

Up to $10,000 in Emergency Grants while Loan Applications are Pending  


Eligible borrowers under §1102, Cooperatives and ESOPS with less than 500 employees.

Must be used for: 

  • Paid sick leave
  • payroll costs
  • costs incurred due to interrupted supply chains
  • rent or mortgage payments
  • other obligations  

Not required to be paid back if loan is denied but subject to setoff and reduction pursuant to §1106

Section 1112 Payment of principal, interest and fees for 6 months.

Existing SBA 7(a), 504 and 7(m) microloans that were made before April 1, 2020 and were not in default since October 2019.


New SBA 7(a) 504 and 7(m) microloans made between April 1, 2020 and September 27, 2020

Excludes those loans made under Section 1102.


If in deferment, six months begins when first payment due. 

Section 4003

Low Interest Loans to larger businesses 


APR not to exceed 2% 


At least 6 months of loan deferral. 


Not subject to loan forgiveness


The principal amount is excluded from any loan forgiveness programs under any business, State or local programs. 

Businesses and non-profits with 500 to 10,000 US Based employees 


Must certify:

  • the loan necessary for continuity of business operations
  • there are no bankruptcy proceedings pending or anticipated 

***special regulations apply for business involved in public air transportation, cargo air transportation and maintenance of national security

Funds will used to retain 90% of the workforce with full compensation and benefits until 09/30/2020; 


Not later than 4 mos after public health emergency ends, employer’s workforce must be at least 90% of workforce that was in place on Feb 1, 2020


Employer will not outsource jobs or abrogate an existing collective bargaining agreement for the term of the loan plus 2 years


Until Loan is repaid, employer must remain neutral to any union organizing efforts.


The loan would preclude the business from paying dividends to common stock holders or repurchasing an equity security in the business for the term of the loan. 

Reference Benefit Eligibility/Applicability Conditions/ Related Misc.
Section 2301: Employer Retention Credit 50% credit toward employment taxes for all employee’s wages and health plan expenses paid for each quarter up to $10,000 per employee in the aggregate or the amount an employee would have been paid during the same 30 day period.

Employers with less than 100 full time employees


Employers with more than 100 FTE (based on avg 2019 headcount) if:

business was suspended due to government imposed limits due to CV-19  within any quarter of 2020  


Q1 2020 gross receipts are less than 50% of Q1 2019 and less than 80% for each subsequent 2020 quarter.    

Only applies to wages paid between March 12, 2020 and January 1, 2021  


This credit shall not apply if the Employer is credited under Section 51, Work Opportunity Tax Credit. 


This credit shall also not apply if the Employer takes a Small Business Interruption Loan under Section 1102 of this Act.  

Section 2302  Abatement of Employer portion of FICA Taxes All employers liable for FICA Taxes except employers receiving debt forgiveness §1106 or §1109.   Employer may submit 50% of Social Security employment tax (6.2%) due based on wages paid in 2020 by December 31, 2021 and the remaining 50% by December 31, 2022 without penalty.
Section 2303  Net Operating Loss Rules Any Business (including REITS) claiming operating loss deductions  The Net operating losses for 2018, 2019 or 2020 can be carried back five years.  
Section 2305 Acceleration of AMT Credits  Corporations that qualified for AMT credits under the Tax Cuts and Jobs Act. Allows companies to receive AMT credits in 2020 rather than waiting until 2021
Section 2306

Special Rules Regarding §163 Deductions 


For tax years 2019 or 2020. The taxpayer may elect to use the taxable income of 2019 in substitute for tax year 2020.

Corporations claiming business interest deductions under Section 163 of the IRS Code

Corporations shall be entitled to 50% rather than 30% business interest deduction. 


If partnership, the deduction is applied 50% in each of 2020 and 2021   

Section 2307   Accelerated Depreciation of Commercial Real Estate Improvements (20 yrs vs 39 yrs)  Taxpayers claiming depreciation deductions Does not apply to enlargements, installation of elevators or escalators or internal structural framework improvements.

Additional programs have been approved that will provide additional assistance in the form of short-term (5 yrs) loans to businesses that pledge to maintain 90% of their current workforce.  The specifics of such program will be established by the Secretary of the Treasury in the coming weeks.