How the CARES Act Affects Truckers

On March 27, 2020, the largest economic recovery package in American history was signed, marking the third phase of emergency relief legislation passed in response to the COVID-19 crisis.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides financial assistance to employers and independent contractors through lending programs backed by the Small Business Administration (SBA), U.S. Treasury Department and Federal Reserve, with a goal to stabilize and stimulate the economy.

Here’s a quick summary about what it means for motor carriers: 

Small Business Loans

Independent Contractors, small- and mid-sized carriers could qualify for new SBA loans to help maintain payroll and other business expenses. ICs and Businesses with 500 or fewer employees that also meet SBA size standards may consider the following programs: 

• Paycheck Protection Program –The Paycheck Protection Program provides eight weeks of cash-flow assistance to maintain payroll during this emergency. Loan payments will be deferred six months, and the program will be available retroactively from February 15, 2020—enabling employers to rehire any recently laid-off employees through June 30, 2020.
• Debt Relief for prior SBA loans
• Increased Express Loans
• Flexibility and expansion in Disaster Loans eligibility

Large Employer and Industry Support

Larger businesses will be eligible for assistance in the form of loans, loan guarantees and investments through Federal Reserve lending programs. 

Among other requirements, borrowers must, until September 30, 2020, maintain their employment levels as of March 24, 2020, to the extent practicable, and retain no less than 90% of their employees as of that date.

Application procedures and minimum requirements must be published by April 6, 2020 here.

Employee Retention Tax Credits

The Employee Retention Credit has been created to provide an incentive for employers to retain employees during the COVID-19 time period. Qualifying businesses must either have operations fully or partially suspended due to a COVID-19 shutdown order OR have gross receipts decline by more than 50% when compared to the same quarter in the prior year. 

Direct Assistance to Individuals and Families

Most American citizens can qualify for the following assistance per the CARES Act: 

• U.S. residents or citizens with adjusted gross income under $75,000 ($112,500 for head of household / $150,000, married), who are not the dependent of another taxpayer and have a work-eligible Social Security Number, are eligible for the full $1,200 ($2,400 married) rebate. 
• They are also eligible for an additional $500 per child. 
• A typical family of four is eligible for a $3,400 recovery rebate. 

More information about Direct Assistance is available here from the Senate Finance Committee.

For additional information about how the CARES Act could impact your carrier, check out this ATA resource.