Frequently Asked Questions on Phase 3 of Coronavirus Response

On March 27, 2020, Congress passed the third phase of the emergency response to the coronavirus crisis. Cathy released the following statement:

“The American people need immediate action during this crisis. That’s why we’ve already passed two packages of legislation to enhance access to diagnostic tests and to support small businesses,” said McMorris Rodgers. “This third package, which just passed the House, will provide fast relief to those who need it most in Eastern Washington, provide $350 billion in forgivable loans to small businesses who maintain their payroll levels, support distressed sectors of the economy to prevent massive job losses, and expand unemployment assistance. It also continues to send much-needed resources to our hospitals and health care providers on the frontline of this crisis.”

McMorris Rodgers continued, “This is targeted, temporary relief to prevent millions of job layoffs as we address a health crisis that no one has experienced before, and that isn’t the fault of distressed industries. COVID-19 is a health care crisis first, but also an economic crisis. The economic impacts on small businesses and American families will come at no fault of their own. That’s why we need to act to provide relief during this time.”

FAQs

INDIVIDUALS & FAMILIES

Q: How is the federal government distributing the direct payments to individuals and families?

A: Through direct deposits and checks in the mail.

Q: When is our direct payment coming?

A: Treasury Secretary Mnuchin said in the next 3 weeks. As Treasury gives additional guidance, we will provide updates.

Q: How much should I expect?

A: One-time checks of $1,200 will be sent to individuals with adjusted gross income up to $75,000 or $112,500 in the case of those with a head of household filing status. All married couples, with adjusted gross income up to $150,000 who file a joint return are eligible for $2,400. Rebates phase out at a 5% rate above adjusted gross incomes of $75,000 (single)/ $122,500 (head of household)/ $150,000 (joint). Check amounts increase by $500 for every child. Estimates are that 90% of Americans will get some level of payment.

Q: How is the federal government determining my income level?

A: Incomes will be determined by 2019 tax returns or 2018 tax returns if you have not yet filed for 2019.

Q: I’m a senior and didn’t file income taxes. Will I get a direct deposit or payment?

A: Yes, the payments are not limited just to those who pay income taxes. If you do not already have a direct deposit set up with the IRS, it may take a bit longer to receive your check, but you are still eligible.

Q: Are gig workers, contractors, and self-employed individuals eligible for unemployment insurance?

A: Yes, the bill expands unemployment benefits to cover more workers including self-employed and independent contractors, like gig workers and Uber drivers, who do not usually qualify for unemployment.

Q: Will the expanded unemployment benefits encourage more workers to be laid off?

A: The programs in the bill, such as the Paycheck Protection Program for small businesses, are designed to incentivize businesses to maintain their payroll as much as possible. Much of the small business loans will be forgiven if the small business is able to maintain their payroll and keep workers employed. We also hope these programs will encourage businesses to hire back people who have already been laid off.

That said, there has already been a record number of unemployment claims and that number will continue to rise. It is essential that we boost the unemployment benefits as a backstop. We are asking businesses and workers to shut down in order to protect the greater public health, and there needs to be measures in place to help them bear this economic burden.

SMALL BUSINESS, NON-PROFITS, FARMERS

Q: How does this help small businesses?

A: This package provides $350 billion in forgivable small businesses loans to businesses who maintain their payrolls during this time. It also will help provide counseling and training services to businesses who are impacted by COVID-19. Finally, it also expands EIDL grants to small businesses by $10 billion. Small businesses will be able to take advantage of both the grants and forgivable loans as long as they are used for different purposes (i.e. grants going to payroll while loans go to mortgage/rent).

Q: I’m worried about taking on even more debt. Why are we being given loans and not grants?

A: This package includes both loans and grants to help small businesses make it through this time. It is important to note a large portion of the loans are forgivable if certain conditions are met (i.e. keeping employees on payroll), meaning you may not have to pay most of it back. The payments on the loans you do have to pay back are also deferred to up to a year.

If you do not want to borrow, there will also be a worker retention tax credit that’s available if you keep your workers on payroll. This credit is new and can pay about half the salary of the average U.S. worker for around 2 months.

Q: I’m a small business owner. How do I get help and access assistance?

A: SBA and Treasury will be putting out guidance on accessing this relief as the bill is implemented, but the quickest way to get access to this assistance is to contact your existing lender. While the SBA is the lead on distributing these loans, the program is designed to go through your local lenders so we can get these funds out quicker.

Q: Are non-profits, chambers, physician practices, eligible for 7(a) loans?

A: 501(c)3 non-profits are eligible. No other 501(c) organizations are eligible, including chambers structured as 501(c)6s.

Physician practices are eligible, no matter how they are structured.

Q: Can small businesses can hire back previously fired employees and still have the loans forgiven? If so, what is the hire-back date?

A: Yes. There is flexibility in the program to allow businesses to hire new, or returning employees, by June, 30, 2020, and still qualify under the headcount requirements.

Q: How quickly will business be able to access loans?

A: The House Small Business Committee is working with the SBA on capacity issues, including onboarding new lenders. The SBA is assuring the Committee that they are ready to stand up all of the requirements within the bill as quickly as possible.

Q: What does this bill do to provide relief for rural communities and farmers?

A: The bill includes a number of small business provisions designed to help farmers stay in business and take care of their employees during this difficult time. These include provisions that allow farmers to work with their trusted farm credit institutions for the purposes of securing payroll tax loans, along with 1-year deferrals, 100% guarantees, and low rates.

The bill provides $14 billion for the Commodity Credit Corporation (CCC), the funding mechanism for all major USDA programs. It also appropriates an additional $9.5 billion to specifically respond to losses due to COVID-19.

Additional funding is provided for USDA agencies that are on the front lines of responding to COVID-19, including the Food Safety Inspection Service (FSIS), the Animal and Plant Health Inspection Service (APHIS), and the Farm Service Agency (FSA).

The bill also includes $100 million to provide financing for rural broadband through the ReConnect program, and $25 million for the Distance Learning and Telemedicine program to provide grants for equipment and connectivity improvements. It also includes $200 million for a new telehealth program at the Federal Communications Commission.

Q: Employee retention credit – how does the Employee retention credit work?

A: The Employee Retention Credit provides a refundable payroll tax credit equal to 50 percent of up to $10,000 in wages per employee (including health benefits) paid by certain employers during the coronavirus crisis.

The credit is available to employers:

whose operations were fully or partially shut down by government order limiting commerce, travel, or group meetings due to coronavirus, or
whose quarterly receipts are less than 50% for the same quarter in the prior year.

Wages paid to employees during which they are furloughed or otherwise not working (due to reduced hours) as a result of their employer’s closure or economic hardship are eligible for the credit.

However, for employers with 100 or fewer employees, all employee wages qualify for the credit, regardless of whether they are furloughed or face reduced hours.

To prevent double dipping, employers that receive Small Business interruption loans are not eligible for the credit. Additionally, wages that qualify for the required paid leave credit are not eligible for the credit.

The credit is for wages paid by eligible employers from March 13, 2020 through December 31, 2020.

HEALTH

Q: What resources are in here for our hospitals and health care providers? What about rural providers?

A: The CARES Act includes $100 billion for hospitals and health care providers, including those who serve rural areas, to ensure they receive the support they need for coronavirus-related expenses and lost revenue.

Q: How will this bill help ensure the health and safety of our families?

A: The legislation provides a $340 billion surge in emergency funding to combat the coronavirus outbreak. More than 80% of the funding package goes to state and local governments and communities to help combat the pandemic. Additionally, there is $16 billion to procure personal protective equipment (PPEs), ventilators, and other medical supplies for federal and state response efforts via the Strategic National Stockpile to ensure that those on the front lines of this pandemic are protected.

Q: Telehealth is extremely important during this time, does this legislation address the urgent need for expanded telehealth?

A: Yes, the CARES Act expands temporary telehealth services during the COVID-19 public health emergency in several ways. The bill removes the need for a pre-existing provider relationship and establishes FQHCs and RHCs as sites of care for telehealth. Additionally, the bill reauthorizes Health Resources and Services Administration (HRSA) grant programs that promote the use of telehealth technologies for health care delivery, education, and health information services.

OTHER

Q: Is this a corporate bailout?

A: No. We’re taking action to mitigate the health and economic crisis caused by a global pandemic—a global pandemic that we’ve never experienced before.

This is temporary, targeted relief to prevent millions of job layoffs.

It’s not a bailout. Again, these industries didn’t do anything wrong. They are experiencing distress because the government shutdown large parts of the economy to address a health crisis.

Still, transparency and accountability is built in.

It bans corporate stock buy backs.

The relief to these distressed industries is coming in mostly the form of loans and loan guarantees, and must be paid back.

The loans also come with strict oversight from a commission and with requirements on continuing payroll and other measures to ensure these funds are being used to help the businesses and workers weather this crisis, not line the pockets of executives.

Q: Where is the $2 trillion coming from?

A: The discretionary funds that are made available by the bill are appropriated out of the Treasury’s general fund, much of the direct relief to consumers and businesses will be in the form of tax credits and rebates, and businesses will be required to pay back the loans authorized in the bill, so there are no bailouts.

Make no mistake, these relief bills will add a significant amount to our already out of control debt. However, this is an unprecedented crisis in both public health and economic terms that requires a significant and unprecedented response.

The government has asked whole sections of our economy to shut down, through no fault of their own, and we need to ensure our small businesses and workers can retain their livelihood when we weather this public health crisis.