The Coronavirus Aid, Relief and Economic Security (CARES) Act was just signed into law March 27, 2020 by President Donald Trump and is an attempt to help those who are facing economic loss, unemployment, and financial ruin due to the coronavirus shutdown. The full text of the bill is 880 pages long, so we decided to highlight the parts that are likely the most important to you. Keep reading to discover How the CARES Act will Help You Recover from the Coronavirus Shutdown.
Small Business Owners: The SBA is offering loans to those who have suffered an economic loss due to the coronavirus shutdown. Here’s how to apply.
One of the things that makes the CARES Act especially beneficial to the every day American is that it expands who is eligible for unemployment benefits and helps struggling families who may have lost one or both incomes due to the coronavirus shutdown. The $2 trillion bill is aimed at mitigating financial losses and stimulating the economy. By the way, $2 trillion looks like this: $2,000,000,000.00. Here’s How the CARES Act May Help You:
How The CARES Act Will Help You Recover From The Coronavirus Shutdown
Direct Payments to Americans
Americans who have filed their taxes for 2019 or 2018 will receive a one-time direct deposit of $1,200, and married couples will get $2,400. If you have dependent children, they you will receive an additional $500 per child. There is an income cap–$75,000 for individuals and $150,000 for married couples.
You will receive payment automatically if you’ve filed for taxes for years 2018 or 2019, and the payment is expected to be sent directly to your bank account if the IRS has that information OR to the address on file. If you do not receive payment, then you should contact the IRS for further information. So far, no firm date on when to expect payment.
Expanded Unemployment Benefits to Americans
The CARES Act is extending their unemployment program and expands eligibility to those who normally wouldn’t receive unemployment benefits.
Workers will get an additional $600 per week for four months, on top of what state programs pay. It will also extend uninsured benefits through the end of 2020 for eligible workers.
Eligibility has been expanded to include those who are self-employed, independent contractors (1099’s), and gig economy workers (think Doordash, GrubHub, Uber, etc).
Help Employers With Payroll Taxes
Employers are allowed to delay the payment of their portion of 2020 payroll taxes until 2021 and 2022.
Eliminate Penalty for Withdrawing Retirement Funds
The CARES Act waives the 10% early withdrawal penalty for distributions up to $100,000 for coronavirus-related purposes, and it is retroactive to Jan 1, 2020. Withdrawals are still taxes, however taxes will be spread over three years OR you can opt to roll it back over as long as you do it within three years.
Increase Borrowing Limits Against Retirement Accounts
For those needing a 401(k) loan, the loan limit is increased from $50,000 to $100,000.
Required Minimum Distributions from IRAs and 401(k) plans (at age 72) are suspended.
Increase Charitable Giving
The CARES Act has expanded charitable contributions to include above-the-line deduction for charitable contributions, plus the limited on charitable contributions are changed.
Help Small Businesses Recover and Keep Staff
The CARES Act is also providing relief and incentives to small business owners during the coronavirus shutdown. $350 billion is being dedicated small businesses to aimed to prevent layoff and business closures while workers have to stay at home during the coronavirus pandemic.
Companies with 500 employees or less that maintain their payroll during the coronavirus shutdown can receive up to 8 weeks of cash-flow assistance. If employers maintain payroll, the portion of the loans used to cover payroll costs, interest on mortgage obligations, rent, and utilities will be forgiven.
Expanded Tax Benefits Under the CARES Act
Under the Tax Cuts and Jobs Act, net operating loss rules have been modified. The 80% rule is lifted and losses can now be carried back five years.
Interest Expense Limitations are increased to 50% from 30% for tax years beginning in 2019 or 2020. Taxpayers have options calculating their interest limitation using their adjusted taxable income for 2020 or 2019.
The excess loss limitation rules for pass-through entities are suspended.
Corporate Relief Under the CARES Act
Large corporations will be able to receive loans, loan guarantees, and other investments overseen by a Treasury Department inspector general. The loans cannot exceed five years and cannot be forgiven.
Airlines will receive $50 billion of the total $500 billion allotted to corporations in the CARES Act. $8 billion is being allotted to cargo air carriers.
Hospital and Health Care Support and Training
$100 billion will be given directly to hospitals. Another $40 billion will be dedicated to providing personal and protective equipment for health care workers, testing supplies, training, and other health-related investments.
All testing and potential vaccines for COVID-19 will be covered at no cost to patients.
Funds Allocated to States and Local Governments Under CARES Act
State, local, and tribal governments will receive $150 billion from the CARES Act for disaster relief, educational institutions, and transit programs.
The CARES Act increases the amount the Agriculture Department can spend on its bailout program by $20 billion.
Key Benefits of the CARES Act for Americans
The CARES Act was signed into law March 27, 2020 and this is what it means for Americans who have been negatively affected by the coronavirus shutdown.
Here’s more on Metroplex Social:
- Small Business Administration Loan Info for Those Who Have Suffered An Economic Loss Due To COVID-19 Shutdown
- How To Work From Home And Actually Get Stuff Done
- DENTON COUNTY Stay At Home Order
- DALLAS COUNTY Shelter In Place Order
- TARRANT COUNTY Stay At Home Order
- COLLIN COUNTY Safe At Home Order
Let us know what you think by leaving a comment below!
Follow and tag us on social media @metroplexsocial for a chance to be featured.