Mar 27, 2020

U.S. Senate and House Pass the ‘CARES Act’ Relief Package

As a response to the current covid-19 health crisis, the U.S. House of Representatives voted in favor of passing the Phase 3 relief package ‘the CARES Act’ (the Coronavirus Aid, Relief, and Economic Security Act). The U.S. Senate has already passed the bill by a 96-0 vote and President Trump signed the act into law immediately.

The covid-19 health crisis is undoubtedly a looming financial crisis as well. Every industry, business and state is starring down an unknown path paved with the financial hardships and disruption caused by the coronavirus. The immediate challenges facing many businesses is a sharp drop or complete loss in revenue. Without quick action and assistance, many businesses will face bankruptcy and/or will be forced to lay off workers.

U.S. Chamber of Commerce‘s President Tom Donohue applauds Congress on taking a very important step to provide the much needed relief that American workers and businesses need and deserve during this unprecedented time:

We applaud passage of the CARES Act on a strong, bipartisan basis (…). The types of emergency funding programs in the CARES Act could make the difference between keeping a business up and running over the coming weeks or being forced to reduce salaries, layoff employees, or shutter businesses entirely.

The roughly 2-trillion CARES Act is aimed at keeping American families and businesses afloat through the crisis by helping businesses stay open and pay their employees, reduce the potential of future layoffs, and ensure more hardworking Americans have access to their pay checks.

The bill sets aside roughly $500 billion in loans and other money for big corporations, which should include Danish companies operating in the U.S. as well. These companies will have to pay the government back and will be subject to public disclosures and other requirements. In addition, the bill establishes a fully refundable tax credit for businesses of all size that are closed or distressed to help them keep workers on the payroll. The goal is to get those employees hired back or put on paid furlough to make sure they have jobs to return. The credit covers to 50 percent of payroll on the first $10,000 of compensation, including health benefits, for each employee.

For employers with more than 100 full-time employees, the credit is for wages paid to employees when they are not providing services because of the coronavirus. Eligible employers with 100 or fewer full-time employees could use the deduction even if they aren’t closed.

Find more details about the CARES Act here (via NPR).