Under the CARES Act, an eligible recipient is eligible for forgiveness of indebtedness on a covered loan in an amount equal to the sum of the following costs incurred and payments made during the covered period: (1) payroll costs; (2) any interest payments on any covered mortgage obligation; (3) any payment for any covered rent obligation; (4) covered utility payments.
An eligible recipient seeking forgiveness of indebtedness on a covered loan must verify that the amount for which forgiveness is requested was used to retain employees, make interest payments on a covered mortgage obligation, make payments on a covered lease obligation or to make covered utility payments.
- A covered loan is a loan guaranteed under Sec. 7(a)(36) of the Small Business Act
- A covered rent obligation is rent paid under a lease agreement in force before Feb. 15, 2020.
- A covered mortgage obligation is any indebtedness or debt instrument incurred in the ordinary course of business that (A) is the liability of the borrower; (B) is a mortgage on real or personal property; and (C) was incurred before Feb. 15, 2020.
- Covered utility payments are payments for a service for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before Feb. 15, 2020.
Advance refunding of credits for paid sick leave and paid family leave
The credits apply only to qualified sick and family leave wages paid for the period beginning on a date selected by IRS (which may be no later than April 2, 2020), and ending on December 31, 2020. The CARES Act provides for advance refunding of the credits for paid sick leave and paid family that were established under the Families First Coronavirus Response Act (FFRCA).
High deductible health plan safe harbor for telehealth services
In general, eligible individuals who have high deductible health plans can take a deduction for contributions made to health savings accounts.
Under the CARES Act, in the case of plan years beginning on or before December 31, 2021, a health plan will not fail to be treated as a high deductible health plan by reason of failing to have a deductible for telehealth and other remote care services.
Changes to definition of qualified medical expenses
An HSA is a trust created or organized in the U.S. exclusively for the purpose of paying the qualified medical expenses of the account beneficiary and that meets certain other requirements.
New law. The CARES Act removes the restriction that qualified medical expenses include only amounts paid for prescribed medicine or drugs and provides that qualified medical expenses include amounts paid for menstrual care products.