Coronavirus Aid, Relief, and Economic Security (CARES) Act: What it Means for Music Creators

Posted in News on March 30, 2020
CARES ACT UPDATE 4/24: Funds have been replenished for the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) Program. If you believe you qualify for relief and have not yet submitted an application, now is the time to apply. For more information on these important programs, please click here.

Last week, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law by President Trump. The Act addresses the coronavirus pandemic and its devastating economic impact. There are several important provisions included in this vital legislation that will help many people, including music creators. BMI, in partnership with others in the music industry, petitioned Congress to address the needs of songwriters, composers and publishers in any stimulus package, and we are very gratified by this result.

Regarding the CARES Act, Mike O’Neill, President & CEO, BMI, stated,

“We are extremely pleased that the federal stimulus package will offer relief to America’s songwriters and composers, who are, in many cases, our nation’s ultimate small businesses. Thanks to the CARES Act, music creators who are independent contractors, sole proprietors or self-employed, will be eligible for small business loans, emergency grants, unemployment insurance, payroll tax deferrals and more, which will all help protect their livelihoods during this challenging time. We would like to thank Senator Blackburn, Representative Deutch, Representative Roby, Majority Leader Hoyer and the many music organizations involved in this effort, for their steadfast dedication to ensuring the needs of America’s music creators were addressed in this critical Act.”

Below is an outline of the benefits that can help music creators and copyright owners:

Direct Payments

Provides direct payments in the amount of $1,200 ($2,400 for married couples) to all U.S. residents with adjusted gross income up to $75,000 ($150,000 for married couples), with eligibility for an additional $500 per child. The payments would start phasing out for earners above those income thresholds and would not go to single filers earning more than $99,000; head-of-household filers with one child, more than $146,500; and more than $198,000 for joint filers with no children.

Paycheck Protection Program

Includes nearly $350 billion in funding to create a Paycheck Protection Program (PPP) that will provide small businesses, sole-proprietors, independent contractors, and other self-employed individuals with zero-fee loans of up to $10 million. Up to 8 weeks of average payroll and other costs will be forgiven if the business retains its employees at their salary levels. Principal and interest are deferred for up to a year, and all borrower fees are waived. This temporary emergency assistance through the U.S. Small Business Administration (SBA) and the Department of Treasury can be used with other COVID-financing assistance established in the bill or any other existing SBA loan program.

For a complete fact sheet on PPP, click here and to apply for an application, click here.

Emergency Economic Injury Grants

Includes $10 billion in funding to provide an advance of $10,000 to small businesses and nonprofits that apply for an SBA economic injury disaster loan (EIDL) within three days of applying for the loan.

Expands eligibility for access to EIDL’s to include Tribal businesses, cooperatives, and ESOPs with fewer than 500 employees or any individual operating as a sole proprietor or an independent contractor during the covered period (January 31, 2020 to December 31, 2020). Private non-profits are also eligible for both grants and EIDLs.

EIDLs are loans of up to $2 million that carry interest rates up to 3.75% for companies and up to 2.75%for nonprofits, as well as principal and interest deferment for up to 4 years. The loans may be used for expenses that could have been met had the disaster not occurred, including payroll and other operating expenses.

The EIDL grant does not need to be repaid, even if the grantee is subsequently denied an EIDL. It may be used to provide paid sick leave to employees, maintain payroll, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments. Eligible grant recipients must have been in operation on January 31, 2020. The grant is available to small businesses, private nonprofits, sole proprietors and independent contractors, tribal businesses, as well as cooperatives and employee-owned businesses.

A business that receives an EIDL between January 31, 2020 and June 30, 2020, as a result of a COVID-19 disaster declaration, is eligible to apply for a PPP loan, or the business may refinance their EIDL into a PPP loan. In either case, the emergency EIDL grant award of up to $10,000 would be subtracted from the amount forgiven in the payroll protection plan.

The bill provides $562 million to ensure that SBA has the resources to provide Economic Injury Disaster Loans (EIDL) to businesses that need financial support.

Pandemic Unemployment Assistance

This provision would create a new program modeled on Disaster Unemployment Assistance that would provide unemployment benefits to individuals who do not qualify for regular unemployment compensation and are unable to work because of the COVID-19 public health emergency. Pandemic Unemployment Assistance will cover self-employed workers (including gig workers and independent contractors), part-time workers, and those with limited work histories. Under the Pandemic Unemployment Assistance program, workers are eligible for an additional $600, and an additional 13 weeks of extended benefits. Pandemic Unemployment Assistance will be state-administered but fully federally funded. The program is effective through December 31, 2020.

Delay of payment of employer payroll taxes

The provision allows employers and self-employed individuals to defer payment of the employer share of the Social Security tax they otherwise are responsible for paying to the federal government with respect to their employees. Employers generally are responsible for paying a 6.2-percent Social Security tax on employee wages. The provision requires that the deferred employment tax be paid over the following two years, with half of the amount required to be paid by December 31, 2021, and the other half by December 31, 2022. The Social Security Trust Funds will be held harmless under this provision.

National Endowment for the Arts

The bill includes $75 million for the National Endowment for the Arts. This funding helps ensure arts music programs and education initiatives continue across the nation.


The U.S. Small Business Administration put together a guide for COVID-19 relief assistance under the CARES Act which includes information on the Paycheck Protection Program (PPP), Economic Injury Disaster Loans and Loan Advances, SBA Debt Relief, SBS Express Bridge Loans, local assistance and more. Click here for additional details.

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