CARES Act Overview

On Friday, March 27, President Trump signed the CARES Act into law. The 880 page document provides an economic stimulus for small and large businesses alike throughout the country. As the COVID-19 crisis evolves, it is inevitable that elements of the federal response will change. In the meantime, please find below a brief overview of some of the relevant pieces of the CARES Act and additional links with more information. 

The information provided on this website is for general information purposes only and does not, and is not intended to, constitute legal advice.  The City of Glenwood Springs does not warrant or guarantee the accuracy of the any information on this website.  Information on this website may not constitute the most up-to-date legal or other information.  


PPP vs. EIDL: Which one is for me? (PDF)

Paycheck Protection Program (PPP)
The Paycheck Protection Program is a federal loan program based on the existing SBA 7(a) lending model. 

  • Eligibility: small businesses and 501(c)3 nonprofit organizations with fewer than 500 employees
    • Some exceptions to business size are made based on sector
  • Amount: payroll expenses for two and a half months, up to $10 million 
    • Limited to salaries/wages under $100,000/year per employee
  • Process: banks will be 100% guaranteed by the SBA (as opposed to the traditional 75% 7(a) guarantee)
    • Loan forgiveness is available based on the percentage of employees who are retained between February 15, 2020 and June 30, 2020
    • Payment deferrals are available for up to 6-12 months
  • Apply: Please speak to your banking institution about whether they are a certified SBA lender and can help you apply
Economic Injury Disaster Loans (EIDL)
The Economic Injury Disaster Loan program was the first line of defense offered by the SBA to small businesses nationwide. Under the CARES Act, the following amendments were made.

  • Eligibility: all 501(c)3 and 501(c)6 nonprofit organizations are now eligible 
  • Process: loans can be granted solely based on credit score; loans under $200,000 do not require a guarantee
    • Up to $10,000 in cash advances are available for eligible costs
  • Apply: https://covid19relief.sba.gov/#/
Paid Leave Changes
Changes to the “Phase 2” Bill that was just enacted:
  • Paid Emergency FMLA leave under FFCRA is capped at $200 per day and $10k in aggregate. 
  • Paid Emergency Sick Leave under the FFCRA is capped at $511 per day and $5,110 in aggregate; this amount drops to $200 per day and $2000 in aggregate for sick leave taken to care for a family member or because of a school closure. 
  • Workers who are laid off after March 1 but are then rehired are eligible for paid FMLA leave. 
  • Private employers can keep money they would have deposited for payroll taxes in anticipation of refunds from the Treasury for paid sick and paid FMLA leave provided to employees, including amounts that would have been refunded.
Work Sharing Programs
  • States that have an existing short-term compensation program can get 100% federal reimbursement for their costs related to that program. 
  • States that enact a short-term compensation program after enactment will also be eligible for reimbursement. 
  • States without a law can enter into an agreement with the Department of Labor to begin providing short-term compensation payments. 
  • Employers participating in a short-term compensation program will pay half the cost to the state. 
  • $100 million in grants are made available for states to develop short-term compensation programs, and the Secretary of Labor will develop model legislation
Unemployment Programs
  • Extend unemployment insurance by 13 weeks and include a four-month enhancement of benefits
  • Unemployment compensation is available for those not eligible for regular UI, including those who may have exhausted benefits.
  • An individual must provide certification that he or she is able and available to work, but is unemployed or underemployed due to:
    • Coronavirus diagnosis or presentation of symptoms and seeking medical attention
    • A household member with coronavirus diagnosis.
    • Caring for a family member who has been diagnosed.
    • School or daycare closures and the individual is the primary child caregiver.
    • Workplace lock-down.
    • Advise from a health care provider to self-quarantine
    • The individual was about to start a job that is no longer available because of coronavirus
    • The individual is now the breadwinner of a household because someone has died from coronavirus.
    • The individual had to quit because of a circumstance resulting from coronavirus.
    • The individual’s place of work is closed because of coronavirus.
  • These provisions do not apply to an individual who can telework with pay.
  • These provisions do not cover someone getting paid sick or paid family leave.
  • The unemployment provisions run from January 27 to December 31, 2020.
  • Receipt of assistance under the unemployment provisions shall not exceed 39 weeks unless otherwise extended.
  • No one week waiting period.
  • The federal government will pick up 100% of the cost.
  • Upon agreement between a state, an additional $600 per worker per week unemployment compensation payment is available.
  • This compensation is 100% covered by the federal government.
  • The additional payment sunsets on July 31.
  • The federal government will pick up the cost for any states that waive the one-week waiting period. This sunsets on December 31, 2020.
Business Tax Provisions
  • Employee retention credit for employers subject to closure due to COVID-19 (permits fully refundable 50% tax credit applicable to the employer’s share of payroll 5 taxes on wages up to $10,000 per employee; widely available with special rules for small employers).
  • Delay of payment of employer payroll taxes (defer payment of the employer share of the Social Security tax due between now and January 1, 2021 to December 31, 2021 (50% due) and December 31, 2020 (remaining due).
  • Modifications for net operating losses (for 2018, 2019, 2020, loss can be carried back 5 years, temporarily suspends 80% limitation; extends to pass-throughs, sole proprietors).
  • Accelerates ability of companies to recover AMT credits
  • Modification of limitation on business interest (for 2019, 2020, increases 30% limitation to 50%)
  • Technical amendment regarding qualified improvement property
  • Temporary exception from excise tax for alcohol used to produce hand sanitizer (for 2020)
For a full list and explanation of programs under the CARES Act, please refer to the U.S. Chamber of Commerce's summary of this historic, bipartisan legislation.