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Federal Coronavirus Aid, Relief, & Economic Security (CARES) Act

The CARES Act, the third federal emergency relief package, includes $2 trillion new emergency relief in response to the coronavirus pandemic.


$292.4 billion to provide for relief paid directly to qualified individuals and families, broken down as follows:

  • Individuals who earn $75,000 or less in adjusted gross income would receive $1,200.
  • Married couples earning up to $150,000 or less in adjusted gross income would receive $2,400.
    • An additional payment of $500 per each child.

Payments would scale down by income for individuals and families above the stated income limits, phasing out entirely at $99,000 for individuals, $112,500 for heads of household, and $198,000 for couples without children. Social security numbers must be provided for each family member claiming a payment.

  • Payments will be provided as advanced tax rebates based on a taxpayer’s filed 2019 tax returns.
    • If a 2019 return has not yet been filed, payments will be based on 2018 filing
    • Non-filers generally need to file a tax return to claim a rebate, however the IRS may coordinate with other federal agencies to distribute payments.
  • Use of Retirement Funds – $7.1 billion.
  • Waives the 10% tax on early distributions from IRAs or other defined contribution plans (such as 401(k)s) for an individual who is (or whose family) is infected with the coronavirus or who is economically harmed by the coronavirus between Jan. 1 and Dec. 31, 2020.
  • Waives requirements that defined contribution plans make minimum distributions in 2020.

Unemployment Insurance

$260 billion to provide additional unemployment insurance support, including:

  • Increasing maximum unemployment benefit by $600 per week and make an additional 13 weeks of federally-funded unemployment compensation for individuals who have exhausted their state unemployment benefits available immediately through December 31, 2020.
  • Creating a new program modeled on Pandemic Unemployment Assistance that would provide unemployment benefits to individuals who do not qualify for regular unemployment compensation and are unable to work because of the COVID-19 public health emergency, such as self-employed workers, part-time workers, and those with limited work histories. This aid would be available at the same amounts and duration of regular unemployment insurance.

Charitable Contributions

  • Allows for partial above-the-line deduction for charitable contributions.
  • The provision encourages individuals to contribute to churches and charitable organizations in 2020 by permitting them to deduct up to $300 of charitable contributions, whether they itemize their deductions or not.


Education Stabilization Fund

$30.9 billion in flexible funding that go directly to states, local school districts, and institutions of higher education to help schools, students, teachers, and families with immediate needs related to coronavirus, including:

  • Elementary and Secondary Education – $13.5 billion in formula funding directly to states, to help schools respond to coronavirus and related school closures, meet the immediate needs of students and teachers, improve the use of education technology, support distance education, and make up for lost learning time.
  • Higher Education Emergency Relief – $14.25 billion will be available for higher education emergency relief for institutions of higher education to prevent, prepare for, and respond to coronavirus.
    • Funds may be used to defray expenses for institutions of higher education, such as lost revenue, technology costs associated with a transition to distance education, and grants to students for food, housing, course materials, technology, health care, and child care.
  • State Flexibility Funding – $3 billion in flexible formula funding to be allocated by states based on the needs of their elementary and secondary schools and their institutions of higher education.
  • Child Care and Development Block Grant – $3.5 billion in grants to states for immediate assistance to child care providers to prevent them from going out of business and to otherwise support child care for families, including for health care workers, first responders, and others playing critical roles during this crisis.
  • Head Start – $750 million for grants to all Head Start programs to help them respond to coronavirus-related needs of children and families, including making up for lost learning time.

Student Loans

  • The bill provides relief to student borrowers by halting all student loan payments for six months and pausing interest accrual on those loans.
  • During those six months of nonpayment, each month would still count toward a qualifying payment toward an authorized loan forgiveness program, including income-driven repayment plans and public service loan forgiveness program.
  • Suspends involuntary collections during this six-month period, including wage garnishment, reductions on tax refunds, and reductions of any other federal benefits including Social Security payments.


  • Public Health and Social Services Emergency Fund – $127 Billion
  • Reimbursement to Hospitals and Health Care Providers – $100 billion to ensure health care providers continue to receive the support they need for COVID-19 related expenses and lost revenue.
  • Strategic National Stockpile – $16 billion to procure personal protective equipment, ventilators, and other medical supplies for federal and state response efforts.
    • When combined with the first supplemental, Congress will have provided approximately $17 billion for the stockpile.
  • Vaccine, Therapeutics, Diagnostics, and other Medical or Preparedness Needs – $11 billion.
    • Includes at least $3.5 billion to advance construction, manufacturing, and purchase of vaccines and therapeutic delivery to the American people.
    • This is in addition to the billions already provided for these activities in the first supplemental.
  • Hospital Preparedness – Not less than $250 million to improve the capacity of health care facilities to respond to medical events.
  • Health Resources and Services Administration – $275 million to expand services and capacity for rural hospitals, telehealth, poison control centers, and the Ryan White HIV/AIDS program.
    • Language is also included to allow community health centers to use FY 2020 funding to maintain or increase staffing and capacity to address the coronavirus.
  • Centers for Disease Control (CDC) and Prevention – $4.3 billion.
    • Resources are provided for public health preparedness and response, which includes funding to state and local public health responders (including reimbursement of funds used thus far in response to the coronavirus), as well as enhanced nationwide surveillance, diagnostics, laboratory support, communication campaigns to the public, guidance to physicians and health care workers, and global health preparedness.
  • State and Local Preparedness Grants – $1.5 billion in designated funding for state and local preparedness and response activities.
    • When combined with the first supplemental, the Congress has provided $2.5 billion for state and local needs.
  • Global Health Security – $500 million to continue CDC’s global health efforts that are critical to the health and security of the U.S.
    • When combined with the first supplemental, the Congress has provided $800 million for global health.
  • Public Health Data Surveillance and Infrastructure Modernization – $500 million to invest in better COVID-19 tools and build state and local public health data infrastructure.
  • Infectious Disease Fund – $300 million to give the U.S. Department of Health and Human Services flexibility to respond to pandemic threats.
    • When combined with the first supplemental, the Congress has provided $600 million to this fund.


  • Employee Retention Credit – $54.6 billion to provide a refundable payroll tax credit for 50% of wages paid by eligible employers to certain employees during the COVID-19 crisis.
    • The credit is also provided to employers who have experienced a greater than 50% reduction in quarterly receipts, measured year-over-year.
  • Aid to Small Businesses – $376 billion, including:
    • $349 billion for general business loans under the Small Business Act for grants to small businesses to ensure they can maintain their payrolls and other operating costs.
    • $10 billion for loans from the Emergency Economic Injury Disaster Loan Program of $10,000 to businesses to cover costs such as providing paid sick leave, maintaining payroll, and other immediate operating costs.
    • $17 billion to the Small Business Administration (SBA) to cover 6 months of payments for small businesses with existing SBA loans.
  • Aid to Corporations – $500 billion for a loan program. As part of this loan program, certain industries have a reserved amount set aside, including:
    • $25 billion for passenger airlines
    • $4 billion for cargo airlines
    • $17 billion for businesses critical to maintaining national security

Companies receiving federal aid will be subject to certain provisions, including:

  • Being barred from raising the pay of certain executives and prohibited from buying back stocks while getting assistance as well for an additional year.
  • Businesses controlled by the president, vice president, members of Congress and heads of federal agencies are not eligible for loans.

Delay of Payment of Employer Payroll Taxes

The bill defers payment of employer payroll taxes through Jan. 1, 2021, with 50% due by Dec. 31, 2021 and the remaining 50% due by December 31, 2022. Clarifies that an employer will be treated as having made timely deposits of applicable taxes during the deferral period if all such deposits are made not later than the applicable dates.

Liquidity Aid

$4 trillion In coordination with the stimulus bill, the Federal Reserve committed to $4 trillion in liquidity. This type of aid is designed to increase businesses’ access to money (loans, lines of credit, etc.) quickly to cover short-term expenses, such as payroll and other fixed costs.


  • Coronavirus Relief Fund – $150 billion to states for necessary expenditures incurred in responding to the coronavirus outbreak – including:
    • Building field hospitals and buying ventilators – as well as to offset the cost of other essential government services not budgeted for in the wake of the economic downturn between March 1, 2020 and Dec. 31, 2020.
    • These funds will be distributed based on a state’s population, however every state will receive a minimum of $1.25 billion.
    • Requires that 45% of the state’s total allotment is reserved for localities of 500,000 people or more (Detroit).
    • Additionally, $8 billion will be reserved for Indian tribes, who may apply directly to the Department of Treasury for their allotment.
  • Community Development Block Grant (CDBG) – $5 billion.
    • CDBG is a flexible program that provides communities and states with funding to provide a wide range of resources to address COVID-19, such as services for senior citizens, the homeless, and public health services. Funding will be distributed using formula.
  • Waives federal regulations and establishes grant programs to help states distribute unemployment funds expeditiously, such as waiving hiring requirements and providing grants for short-time compensation programs.


Federal Emergency Management Administration (FEMA)

  • $45.4 billion to continue FEMA’s entire suite of response and recovery activities and reimbursements provided to states and localities nationwide by the Disaster Relief Fund for emergency and major disaster declarations and related administrative expenses.
  • Includes $400 million for grants that can be disbursed in a timely manner for firefighters, emergency managers, and providers of emergency food and shelter.

Election Security Grants

  • $400 million for the Election Assistance Commission to provide grants to the states in response to the coronavirus for the 2020 election cycle.

U.S. Department of Agriculture

  • $9.5 billion in emergency COVID-19 response funding to support agricultural producers impacted by COVID-19, including producers of specialty crops, producers that supply local food systems, and livestock producers.

U.S. Department of Transportation

  • $31.1 billion, including:
    • Federal Aviation Administration, Airport Improvement Program (AIP) – $10 billion to maintain operations at our nation’s airports that are facing a record drop in passengers. AIP funds will be distributed by formula.

Essential Air Service (EAS)

  • $56 million provided to maintain existing air service to rural communities. This funding is necessary to offset the reduction in overflight fees that help pay for the EAS program.

Federal Highway Administration

  • Language to clarify that states can issue special permits for overweight vehicles and loads to allow for the free flow of critical relief supplies during the current coronavirus epidemic for the duration of the fiscal year.

Federal Transit Administration (FTA), Transit Infrastructure Grants

  • $25 billion for transit providers, including states and local governments across the country, for operating and capital expenses.
  • Funding will be distributed using existing FTA formulas.


  • $1 billion for Amtrak operating assistance to cover revenue losses related to coronavirus.
  • In addition, funding is provided to help states pay for their share of the cost of state supported routes.