Tennis Industry United
CARES ACT SUMMARY
On March 27th, the $2 Trillion Stimulus package known as H.R. 748 “Coronavirus Aid, Relief and Economic Security Act” or the “CARES ACT” (“CARES ACT”) was signed into law. The CARES ACT includes $350 billion earmarked for loans and assistance to small businesses.
Below are highlights that are relevant to the recovery of the tennis industry:
• Direct payments to taxpayers: If you make less than $75,000 a year as an individual, you can receive $1,200, and $500 for each dependent child (which will come quickly for those with IRS direct deposit, otherwise the check will be mailed). Individuals who earn $100,000 a year or more are not eligible. For couples, if you make less than $150,000 a year you can receive up to $2,400 and $500 for each dependent child. Couples who earn more than $200,000 are not eligible.
• Expanded unemployment benefits: Larger checks for four months; an extra 13 weeks of eligibility; and assistance for independent contractors/freelancers/self employed and furloughed workers.
Notably, the program provides payment to those not traditionally eligible for unemployment benefits-like coaches, pros, athletes and officials who are unable to work as a direct result of COVID-19.
For self-employed individuals, the weekly benefit is calculated under a formula that you can find here https://www.law.cornell.edu/cfr/text/20/625.6, however, it can be difficult to parse through the legalese AND your individual situation and your state of residency will play a factor. Your best resources is your own state unemployment office. State by state resources are listed below. In addition, the US government has set up a website: https://www.careeronestop.org/ that aggregates information about COVID-19 unemployment insurance issues.
- Emergency loans for small businesses: Employers who maintain a percentage of their staff during the crisis may be eligible for government loans, and if those staffing levels are maintained through the crisis, there may be the opportunity to receive a percentage of loan forgiveness.
- Emergency EIDL Grants: The CARES ACT expands eligibility for businesses and individuals to access Economic Injury Disaster Loans to include not-for-profit, sole proprietors, and other businesses. Includes waiver of personal guarantee and emergency advance within three days of application approval.
- Charitable Contributions: Fundraisers should know that charitable contribution deductions for businesses have been increased from 10% to 25% of taxable income. In addition, the CARES ACT allows up to $300 of charitable deductions for individuals that do not itemize and relaxes 50% limitation rules of adjusted gross income.
- Retirement Plans: Waiver of early withdrawal penalty for certain coronavirus-related withdrawals from qualified retirement plans up to $100,000.
- Mid-Sized Business Loans: Main Street Lending Program
The Federal Reserve has taken action to provide up to $2.3 trillion in loans to support the economy. This funding will assist households and employers of all sizes and bolster the ability of state and local governments to deliver critical services during the coronavirus pandemic.
The Main Street Lending Program will enhance support for small and mid-sized businesses that were in good financial standing before the crisis by offering 4-year loans to companies employing up to 10,000 workers or with revenues of less than $2.5 billion. Principal and interest payments will be deferred for one year. Companies seeking Main Street loans must commit to make reasonable efforts to maintain payroll and retain workers. Borrowers must also follow compensation, stock repurchase, and dividend restrictions that apply to direct loan programs under the CARES Act. Firms that have taken advantage of the PPP may also take out Main Street loans. More information about this profram can be found in the following press release from the Federal Reserve:
https://www.federalreserve.gov/newsevents/pressreleases/monetary20200409a.htm Please read to the bottom of the press release to find PDFs for the terms of each of the various programs available.