2020-08-26 CC Packet - Laserfiche WebLink

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49.Are States permitted to use Coronavirus Relief Fund payments to satisfy non-federal matching requirements under the Stafford Act, including “lost wages assistance” authorized by the Presidential Memorandum on Authorizing the Other Needs Assistance Program for Major Disaster Declarations Related to Coronavirus Disease 2019 (August 8, 2020)? Yes. As previous guidance has stated, payments from the Fund may be used to meet the non-federal matching requirements for Stafford Act assistance to the extent such matching requirements entail COVID-19-related costs that otherwise satisfy the Fund’s eligibility criteria and the Stafford Act. States are fully permitted to use payments from the Fundto satisfy 100% of their cost share for lost wages assistance recently made available under the Stafford Act. 50.At what point would costs be considered to be incurred in the case of a grant made by a State, local, or tribal government to cover interest and principal amounts of a loan, such as might be provided as part of a small business assistance program in which the loan is made by a private institution? A grant made to cover interest and principal costs of a loan, including interest and principal due after the periodthat begins on March 1,2020, and ends on December 30, 2020(the “covered period”), will be considered to be incurred during the covered periodif (i) the full amount of the loan is advanced to the borrower within the covered period and (ii) the proceeds of the loan are used by the borrower to cover expenses incurred during the covered period. In addition, if these conditions are met, the amountof the grant will be considered to have been used during the covered period for purposes of the requirement that expenses be incurred within the covered period. Such a grant would be analogous to a loan provided by the Fund recipient itself that incorporates similar loan forgiveness provisions. As with any other assistance provided by a Fund recipient, such a grant would need to be determined by the recipient to be necessary due to the public health emergency. 51.If governments use Fund payments as described in the Guidance to establish a grant program to support businesses, would those funds be considered gross income taxable to a business receiving the grant under the Internal Revenue Code (Code)? Please see the answer provided by the Internal Revenue Service (IRS) available at https://www.irs.gov/newsroom/cares-act-coronavirus-relief-fund-frequently-asked-questions. 52.If governments use Fund payments as described in the Guidance to establish a loan program to support businesses, would those funds be considered gross income taxable to a business receiving the loan under the Code? Please see the answer provided by the IRSavailable at https://www.irs.gov/newsroom/cares-act- coronavirus-relief-fund-frequently-asked-questions. B. Questions Related to Administrationof Fund Payments 1.Dogovernments have to return unspent funds to Treasury? Yes. Section 601(f)(2) of the Social Security Act, as added by section 5001(a) of the CARES Act, provides for recoupment by the Department of the Treasury of amounts receivedfrom the Fund that have not been used in a manner consistent withsection 601(d) of the Social Security Act. If a government has not used funds it has received to covercosts that were incurred by December 30, 2020, as required by the statute, those funds must be returned tothe Department of the Treasury. 10