March 27, 2020
We just learned
Coronavirus Aid, Relief and Economic Security (CARES) Act
was passed by the House of Representatives. We expect President Trump to sign the act into law very soon. While we are waiting, we thought you might want to know about some of the other provisions in the CARES Act.
Agriculture
CARES provides $9.5 billion in emergency aid for the agriculture industry and replenishes $14 billion in spending authority to the Agriculture Department’s Commodity Credit Corp. Established during the Depression to stabilize the farming industry, this is the same USDA agency that sends trade bailout payments to farmers. Producers ranging from dairy farmers and cattle ranchers to fresh fruit and vegetable growers are eligible.
Airlines and Airports
CARES includes $25 billion in loans and loan guarantees reserved for the airlines. This provision would also benefit eligible businesses approved to perform inspection, repair, replace, or overhaul services, and ticket agents. The definition of "ticket agents” is expanded to include travel agents who book flight Here is how the $25 billion will be allocated:
- $9.4 billion for commercial airports to use for operating expenses to help offset the impacts of the coronavirus downturn in airport business.
- $100 million in aid for general aviation airports.
- $500 million to help airports meet their non-federal share requirements for their FY 2020 Airport Improvement Program capital investment grants.
Casinos
Casinos would be allowed to apply for portions of the $350 billion in Small Business Administration (SBA) loans. Casinos that qualify as a small business small business and need less than $10 million can apply for a SBA loan. Larger casinos can apply for $454 billion in loans backed by Treasury.
Harbor Maintenance Trust Fund
The CARES Act includes language making it easier for Congress to give money for harbor dredging by exempting from discretionary spending caps the Army Corps of Engineers funding provided through the Harbor Maintenance Trust Fund (HMTF). This provision allows future HMTF expenditures up to the level of the previous year’s collected revenue, as “off-budget” or “mandatory” spending. This would ensure all future HMTF user fee revenues are invested in port, harbor, and waterway infrastructure improvements in a timely manner
Transit
CARES would provide $25 billion for Transit Infrastructure Grants to support operations and capital expenses using existing Federal Transit Administration formulas. New Jersey is earmarked to receive $1 billion. Here is how some of the $25 billion will be allocated:
- $1.018 billion for the national Amtrak network.
- $492 million in grants for the Northeast Corridor
- $526 million in National Network grants.
State Allocations
CARES would provide $150 billion for state and local governments, with no state getting less than $1.5 billion.
Other CARES provisions:
A new tax benefit for student loan borrowers whose employers help them pay off their debt. A company could pay up to $5,250 of an employee’s student loan payments each year on a tax-free basis.
- Waives withdrawal penalties for early withdrawals from retirement plans. The bill also provides flexibility for loans from retirement plans for coronavirus-related expenditures.
- Consumers wouldn't get a negative credit report if they have an agreement with a lender to delay payments or make partial payments.
- President Trump would be able to extend the terms of up to seven senior military leaders: the Air Force chief of staff; the chief of space operations; the chief of the National Guard Bureau; the directors of the Army and Air National Guard; and the chief of the Army and Navy Reserves. Many of those top officers' terms are scheduled to end later this year. The provision would permit Trump to keep these current leaders in the job until successors are confirmed.
- Free video conference and phone calls for inmates during the pandemic.
- FDA oversight of over-the-counter products, including sunscreen is expanded. The provision would also streamline the process to change safety labels.
The New York Times posted an excellent article entitled
F.A.Q. on Stimulus Checks, Unemployment and the Coronavirus Bill
. I encourage you to read this important information to determine if you qualify for these benefits. Generally, unemployment benefits are available for self-employed individuals, as well as full time and part time workers displaced due to COVID-19. The New York Times is not charging to access articles on COVID-19.
We will share more details as they become available. Please visit
our
COVID-19 Resource Page
for more updates.
We will continue to share more details as they become available. Feel free to contact any member of our team at (610) 828-1900 (PA) or (732) 341-3893 (NJ) with questions. Rich Higgins, CPA, managing principal – New Jersey office can be contacted at
Richard.Higgins@MCC-CPAs.com
. I can be reached at
Marty.McCarthy@MCC-CPAs.com
. As always, we are happy to help.
Stay safe,
Marty McCarthy, CPA, CCIFP
Managing Partner
McCarthy & Company
Source: The Tax Foundation and State of Pennsylvania. March 26, 2020.
Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).
