On March 27, 2020, the United States Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), aimed at providing financial relief to the American people and American businesses in response to the economic fallout from the fast-developing coronavirus (COVID-19) pandemic. The measure provides direct financial aid to American families, payroll and operating expense support for small businesses, and loan assistance for distressed industries.
- The legislation will provide billions of dollars in credit for struggling industries, a significant boost to unemployment insurance and direct cash payments to Americans.
- The measure increases unemployment payments and extends the benefit to those who typically do not qualify, such as gig economy workers, furloughed employees and freelancers. The bill increases the maximum unemployment benefit that a state gives to a person by $600 per week for four months.
- The bill also provides for direct payments to Americans, giving individuals who make up to $75,000 a year checks for $1,200, couples making up to $150,000 payments of $2,400, and an additional $500 per child. The payments decrease for those making more than $75,000, with an income cap of $99,000 per individual or $198,000 for couples.
- Your payment will be reduced by $5 for every $100 of income that exceeds the limits. So if you made $80,000 in 2019, you will receive $950. The payment decreases to $0 for an individual making $99,000 or more or a couple making $198,000 or more.
- Calculate how much you will receive here: https://www.usatoday.com/story/money/2020/03/26/stimulus-checks-how-much-money-get-government/2921123001/
- According to the treasury Secretary, the payments should be sent out within 3 weeks to whom the IRS has information. You don’t need to sign up or fill out a form to receive a payment if you’ve been working and paying taxes since 2018. If you have not filed taxes, you must have received a SSA 1099 form for 2019. If your address has changed since 2018 and you have not filed a return for 2019, you must file 2019 ASAP to get the refund.
- If you’ve received a refund the last two years by direct deposit, that is where the money will be sent. If not, the IRS will mail a check to the “last known address”
- The amount you will receive is based on the adjusted gross income for 2019 or if you haven’t filed, then the AGI for 2018. Line 7 on form 1040 tax return for 2018 or line 8B on your 2019 return.
- Payment is not taxable and will not be included in wages for 2020.
- Payroll Tax relief – Business that continue to employ workers through the coronavirus would be eligible to delay paying payroll taxes for 2020, then pay 50% in 2021 and the other 50% in 2022.
- SBA interruption loan – Business with 500 or fewer employees that continue to employ and pay workers through the coronavirus crisis.
- The government would provide loans to small and mid-size businesses to prevent layoffs and to continue to pay employees.
- Individual loans could cover six weeks of payroll, capped at $1,540 per week, per employee.
- Applicants must verify the previous six weeks of payroll and later verify that they have paid employees for eight weeks after receiving loan.
- For businesses with existing SBA loans, principal and interest would be waived for six months.
- The legislation also provides $100 billion to hospitals $500 billion to corporations, including airline companies and cruise lines; and about $150 billion for state and local stimulus funds.
- Under the CARES Act, the loans can be for as much as 2.5 times payroll or $10 million, whichever is less. Payments can be deferred by up to a year, and businesses will be able to apply for forgiveness of the loan (or a portion of it), based on the amount used during the eight weeks following loan approval. Any amount not forgiven would have a maximum interest rate of 4%.The legislation also waives typical SBA loan requirements that credit must be unavailable elsewhere and that the borrower must personally guarantee the amount or provide collateral.
Tax Credits for small and mid size businesses:
SBA Loan Information:
CARES ACT Bill: