A sweeping COVID-19 relief package was approved by Congress and signed by the president Friday.
The CARES Act – short for Coronavirus Aid, Relief and Economic Security Act – represents the most significant stimulus package in U.S. history. It contains many provisions that will take time to interpret, and clarification is expected to come from the U.S. Department of Treasury, Department of Labor, and Small Business Administration SBA).
Meanwhile, here are key provisions that matter to veterinary professionals.
Support for businesses to retain employees and maintain operations
- Access to forgivable loans: The bill includes a new paycheck protection program through the SBA to provide loans for payroll and operating costs for small businesses, sole proprietors, self-employed, and independent contractors. The program allows loan funding to support payroll, paid leave, rent, utilities, and health insurance premiums. It also offers substantial loan forgiveness for qualified expenses and defers remaining loan payments up to one year, while also waiving borrower and lending fees.
- Tax credits and tax deferrals to support small businesses: Further guidance is needed, but the bill will allow employers to receive an advance tax credit instead of having to wait for reimbursement on the back end. Tax policies in the package include a new retention tax credit; allowing for employers to make tax-free student loan repayment contributions on behalf of employees; and allowing for deferment of employer payroll taxes through 2020.
Unemployment insurance benefits expanded
The bill expands the size and scope of unemployment benefits, creating a new and temporary pandemic unemployment insurance program to cover individuals who may be unemployed, partially unemployed, or unable to work because of COVID-19 and otherwise ineligible for unemployment benefits. This includes self-employed individuals and independent contractors. The program is designed to replace lost wages for up to four months and provides a $600 federal benefit in addition to state benefits.
Additional support for individuals
- Individual “recovery rebates:” The bill provides a tax credit of $1,200 for individual filers ($2,400 for joint filers) plus $500 per child. The credit is phased out for individuals with adjusted gross income over $75,000 ($150,000 for joint filers), and is phased out completely at $99,000 for individuals ($198,000 for joint filers). The administration is expected to advance the “rebate” tax credit as rapidly as possible.
- Federal student loan relief: The bill provides six months of relief on federal student loan payments and suspends interest accrual through Sept. 30, 2020. During this time, borrowers would receive credit for making payments in order to remain on track for loan forgiveness programs such as the Public Service Loan Forgiveness (PSLF) program. The bill also temporarily suspends debt collections on federal loans.
- Relaxed rules on retirement accounts: The law waives the 10% penalty on early distributions from retirement accounts for 2020. Additionally, people subject to mandatory minimum distributions from their retirement accounts will be able to keep their capital invested instead of being forced to cash out to draw on it without penalty. The penalty would be suspended for 2020.
Get all the details
AVMA has put together detailed information about the CARES Act and other COVID-19 relief measures that affect veterinarians. See these additional resources for more information:
All of these measures are available on the AVMA’s COVID-19 webpage, along with a wide range of other practical resources to help veterinarians and veterinary practices navigate the coronavirus pandemic. We continue to add new information and resources. You can subscribe to this blog and follow the AVMA’s social media pages to make sure you stay informed.