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A Summary of the Coronavirus Aid, Relief and Economic Security (CARES) Act

President Trump signed a $2 trillion (phase III) coronavirus stimulus bill offering immediate relief to those most struggling with the pandemic.

Five Main Groups Impacted

  1. Individuals – $560 billion
  2. Big Corporations – $500 billion
  3. Small Businesses – $377 billion
  4. State and Local Governments – $339.8 billion
  5. Hospitals and Public Health – $153.5 billion

INDIVIDUALS – $560 BILLION

Cash payments
  • One-time cash payment of $1,200 per adult and $500 per child younger than age 17.
  • The payments start to phase down for individuals with incomes up to $75,000 per year and completely phased out for anyone making over $99,000 ($198,000 for couples).
  • The calculations are based on 2018 or 2019 tax filings.
Retirement plans
  • Required minimum distributions (RMDs) waived for 2020.
  • Hardship withdrawals and loans from retirement accounts:
    • Early-withdrawal penalties waived on coronavirus-related distributions from retirement accounts up to $100,000.
    • Loans from certain retirement plans increased from $50,000 to $100,000 and allows borrowers to skip payments for 2020.
Unemployment insurance expanded
  • Expands unemployment insurance from three to four months.
  • Additional $600 per week payment to each recipient of unemployment insurance.
  • Part-time, gig workers/freelancers/contractors can now apply for unemployment benefits through the end of this year.
Tax returns
  • The deadline for filing and payment of 2019 federal income taxes has been extended to July 15, 2020.
  • The deadline to make 2019 contributions to IRAs and health savings accounts (HSAs) has been extended to July 15,2020 also.
Student loans
  • Employers can provide up to $5,250 in tax-free student loan repayment benefits
  • Payments and interest on federal student loans suspended for 6 months
  • Students who are forced to withdraw from school due to the outbreak may have the portion of their loan covering that semester canceled.
Insurance coverage
  • All private insurance plans to cover COVID-19 treatments and vaccine and makes all coronavirus tests free.
Charitable Deductions
  • Allowance of up to $300 of charitable deductions for taxpayers who take the standard deduction or itemize.
  • The 60% of adjusted gross income limitations on deductions for charitable contributions is suspended for 2020.
  • These changes go into effect beginning in the 2020 tax year.

BIG CORPORATIONS – $500 BILLION

  • $500 billion will be allotted to provide loans, loan guarantees, and other investments, overseen by a Treasury Department inspector general.
  • About $58 billion (of $500 billion) is allocated to help airlines stay open. $25 billion for passenger air carriers, up to $4 billion for cargo air carriers, and up to $3 billion for airline contractors. The rest is set aside to help cover employee wages, salaries and benefits.
  • For corporations who receive a government loan, there will be stipulations about stock buybacks and limitations on executive bonuses
  • Distressed companies will have to pay the loan back and will be subject to public disclosures and strict oversight.

SMALL BUSINESSES – $377 BILLION

Emergency grants: $10 billion for Small Business Administration (SBA) emergency grants of up to $10,000 to provide immediate relief for operating costs.

Forgivable loans: $350 billion will be for loan forgiveness grants to small businesses and non-profits to maintain existing workforce and help pay for other expenses like rent, mortgage, and utilities, up to $10 million per business.

Relief for existing loans: $17 billion for the SBA to cover six months of payments for small businesses with existing SBA loans.

There are also changes to rules for expenses and deductions meant to make it easier for companies to keep employees on the payroll and stay open in the near-term.

STATE AND LOCAL GOVERNMENTS – $339.8 BILLION

The legislation designates $339.8 billion for programs that will go to state and local governments. It is divided up to put $274 billion toward specific COVID-19 response efforts, including $150 billion in direct aid for those state and local governments running out of cash because of a high number of cases.

Summary of some allocations for Washington state
  • State Coronavirus Relief Fund: estimated $1.624 billion for Washington state (state share) and estimated $1.329 billion for WA local governments (local share) for a $2.953 billion total for Washington, out of $150 billion total.
  • Child Care Development Block Grant: estimated $58.2 million for Washington out of $3.5 billion total.
  • Community Services Block Grants: for counties and cities to rapidly respond to the economic and housing impacts caused by COVID-19, estimated $11.8 million for Washington out of $1 billion total.
  • Low Income Energy Assistance program: estimated $11.1 million for Washington out of $900 million total.
  • Education Stabilization Fund: to help ensure K-12 schools and institutions of higher education can continue to serve students as they respond to the coronavirus crisis.
    • Education Stabilization Fund: estimated $56.6 million for Washington out of $2.953 billion.
    • Elementary and Secondary Education: estimated $216.9 million for Washington out of $13.229 billion total.

HOSPITALS AND PUBLIC HEALTH – $153.5 BILLION

Hospitals: there is $100 billion for hospitals responding to the coronavirus.

Community health centers: the bill provides $1.32 billion in immediate additional funding for community centers that provide health care services for roughly 28 million people.

Drug access: there is $11 billion for diagnostics, treatments and vaccines. The bill also includes $80 million for the Food and Drug Administration to prioritize and expedite approval of new drugs.

Centers for Disease Control and Prevention: CDC programs and response efforts are getting $4.3 billion.

Veterans’ health care: there is $20 billion set aside for veterans.

Telehealth: the bill reauthorizes a critical telehealth program to extend the reach of virtual doctors’ appointments.

Medicine and supplies: the bill give $16 billion to the Strategic National Stockpile to increase availability of equipment, including ventilators and masks.


Kelsey Snell, “What’s inside the Senate’s $2 trillion coronavirus aid package,” NPR.org, https://www.npr.org/2020/03/26/821457551/whats-inside-the-senate-s-2-trillion-coronavirus-aid-package.
https://www.schwab.com/resource-center/insights/content/how-us-economic-stimulus-package-may-affect-investors
https://www.fidelity.com/learning-center/personal-finance/coronavirus-stimulus-package
https://www.governor.wa.gov/news-media/inslee-statement-federal-stimulus-package
https://www.ncsl.org/ncsl-in-dc/publications-and-resources/coronavirus-stimulus-bill-states.aspx
https://www.banking.senate.gov/newsroom/majority/crapo-leads-economic-response-in-coronavirus-phase-iii-legislation