A look at the economic stimulus package


With the Senate unanimously approving the $2.2 trillion economic stimulus package – the Coronavirus Aid, Relief, and Economic Security (CARES) Act —   the legislation heads to the House of Representatives on March 27 and then President Trump’s desk.

The act is designed to give the U.S. economy much more than a shot in the arm while jump-starting a machine that has been all but sidelined by the coronavirus pandemic as businesses have been shuttered and millions for employment.

In an outline provided by the National Association of Home Builders, here is what is included in the CARES Act:

  • Make direct payments of $1,200 to most individuals earning up to $75,000, or $2,400 for couples earning up to $150,000. The amount decreases for individuals making more than $75,000 and payments cut off for those earning above $99,000.
  • Provide an additional $367 billion in loans for small businesses to help deal with payroll issues.
  • Create a $500 billion lending program for larger companies, including airlines, as well as states and cities.
  • Establish an oversight board and inspector general to oversee loans to large companies.
  • Provide $130 billion for hospitals.
  • Earmark $150 billion for state and local governments.

Small Businesses
Small business owners in all U.S. states and territories are currently eligible to apply for low-interest Economic Injury Disaster Loans (EIDL) of up to $2 million that can provide vital economic support to help overcome the temporary loss of revenue due to the COVID-19 response. Applicants may request an advance in the amount of $10,000 to be delivered within three days of the request. This advance must be used to:

  1. Provide sick leave to employees unable to work due to the effects of COVID-19;
  2. Maintain payroll to retain employees;
  3. Cover increased costs of materials due to interrupted supply chains;
  4. Make rent or mortgage payments; or
  5. Repay other obligations that cannot be met due to revenue losses.

An applicant will not be required to repay this advance if it is used for these purposes, even if they are subsequently denied a loan under the EIDL program. Qualified businesses can apply online at For application assistance, please contact an SBA customer service representative at 1-800-659-2955 or email [email protected].

Small and medium sized businesses (with fewer than 500 employees) are also eligible to apply for SBA’s expanded 7(a) loan program. This program is not provided through SBA directly, so the first step to qualifying for a 7(a) loan is to find an SBA approved lender in your community. Your lender can guide you through the application process and determine which 7(a) loan product will work best for your business.

Allowable uses of these loans include:

  1. Payroll costs;
  2. Certain costs related to the continuation of group health care benefits;
  3. Employee salaries (including commissions);
  4. Mortgage, rent and utilities payments; and
  5. Interest on any other debt obligations that were incurred before the covered period.

A loan recipient may be eligible for forgiveness on a covered loan used for costs including payroll, mortgage and rent obligations, and utility payments.

The CARES Act provides a number of tax provisions aimed at providing financial relief to most American taxpayers as well as new tools to aid struggling businesses.

The legislation includes a $1,200 “recovery rebate” that will be distributed to all eligible Americans. Eligible recipients include taxpayers with adjusted gross income up to $75,000 (single)/$112,500 (head of household)/$150,000 (joint filers). Joint filers will receive $2,400.

  • The rebate is phased out for taxpayers with higher incomes and is completely phased out for single filers, heads of household, and joint filers with incomes above $99,000, $136,500, and $198,000, respectively.
  • All eligible taxpayers will receive a check, which will be processed automatically based on the taxpayers’ 2019 tax returns.  If the taxpayer has not yet filed a 2019 tax return, the IRS will use their 2018 tax return.
  • This is structured as a tax credit that is refunded in advance.  Taxpayers will have to account next year for any “recovery rebate” on their 2020 tax returns.
  • Waived Penalties for Early, Coronavirus-Related Withdrawals from Retirement Funds: Taxpayers will not have to pay the 10% early withdrawal penalty for distributions up to $100,000 from qualified retirement accounts.

The bill contains a significant expansion of unemployment benefits to support workers who have lost their jobs as a result of the COVID-19 health pandemic. Specifically, the measure:

  • Creates a temporary Pandemic Unemployment Assistance (PUA) program to provide payment to those not traditionally eligible for unemployment benefits — such as the self-employed and independent contractors — who are unable to work as a direct result of the coronavirus pandemic. Payments through the PUA program are authorized for a maximum of 39 weeks, ending Dec. 31, 2020. This will be a huge economic relief to a large segment of NAHB’s membership.
  • Extends traditional unemployment insurance (UI) benefits for another 13 weeks and provides for an additional $600 per week for each recipient of traditional UI or PUA for up to four months.
  • Authorizes federal funds to cover the usual one-week waiting period before an individual gets their first unemployment benefits so that they can start receiving payments immediately.
  • Funds short-term compensation (STC) programs and allows states to create new programs for employers that are having to choose between laying off or furloughing their employees to receive funding to keep those workers on their payroll. The STC program funding will be available for coverage of weeks of unemployment through December 31, 2020. Temporary, seasonal or intermittent workers are not eligible for those types of benefits.
  • Authorizes payments to states to reimburse government agencies, tribes and nonprofits for half the payments they are required to make into the state unemployment fund.

Additional details about the CARES Act, as provided by the NAHB, – including banking measures, mortgage relief, and tax benefits for corporations and businesses – can be found here.

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