Federal Relief Coming Soon for Transportation Businesses & Drivers: COVID-19 Transportation Update - Thursday, March 26, 2020
Federal Help for the Transportation Industry with Small Business Loans and Direct Payments passes the U.S. Senate and Moves to the House of Representatives!
Earlier today, the United States Senate passed The Coronavirus Aid, Relief, and Economic Security Act (“The CARES Act”). The CARES Act makes no special designation for the transportation industry. However, the legislation has general applicability and many in the transportation sector will benefit from the business loans and direct payments in The CARES Act.
Although the final legislation may be tweaked as the House of Representatives considers the law over the next day, here are some key provisions from the Senate bill that will be helpful to those in the transportation sector:
Small Business Loans
Many transportation companies and drivers alike will benefit from the legislation. The CARES Act provides $350 billion in funds for small businesses – regardless of sector – of up to 500 employees OR, if applicable, the SBA- established size standard in number of employees for the industry in which the business operates, whichever is less. The general provision of a small business having 500 or fewer employees to qualify for loans applies since the SBA has not set a size standard in the number of employees for most passenger ground transportation businesses, including taxi, limousine, charter bus, and “Other Transit and Ground Passenger Transportation.”
For those who own a taxicab or for-hire vehicle, the “Paycheck Protection Loans” included in the legislation is also helpful since it would be available to sole proprietors, independent contractors, and eligible self-employed individuals. Under this program, loans may be used to cover enumerated expenses and costs, including debt obligations.
Whether you own the transportation company, are an employee, or are an independent contractor, you may also receive direct payments in the next few weeks – depending on your income. Direct payments of $1,200 would be sent to most middle-income and lower-income individual taxpayers ($2,400 for joint taxpayers). $500 would be paid for each child under 17. The payment amount begins to phase out at $75,000 for singles and $150,000 for joint taxpayers at 5 percent per dollar of qualified income, or $50 per $1,000 earned. It phases out entirely at $99,000 for single taxpayers and $198,000 for joint taxpayers.
Under the CARES Act, if the employer maintains payroll for the covered period, then the portion of the loans used for covered payroll costs, interest on mortgage obligations, rent, and utilities would be forgiven. This proposal would be retroactive to February 15, 2020, and would encourage employers to rehire workers who were laid off or reinstate salaries that were cut due to the virus outbreak.
If you would like to learn more about the CARES Act or have additional questions, please contact Matt Daus at email@example.com or (212) 237-1106.