Overview of Benefits Provided by CARES Act
As you probably know, on Friday, March 27th, President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law after it was passed unanimously in the Senate. This act provides financial relief to seven main groups: individuals, small businesses, big corporations, hospitals & public health, the federal safety net, state & local governments, and education. What follows is a brief summary of some of the assistance provided until you can read all 880 pages of the CARES Act for yourself!
Benefits to Individuals
Cash payments: The act will provide a one-time cash payment for households based on their gross adjusted income on their 2018 or 2019 tax returns. Full cash payments of $1200 for each adult and $500 for each child are available for individuals making $75,000 or less and married couples making $150,000 or less. For individuals with incomes above these figures, their payment will be scaled down, and will phase out altogether based on the size of the household. If a household’s income is based on Social Security, and they do not file a tax return, the household will still be eligible based on information from the Social Security Administration. Sources have created CARES payment calculators to help you determine what your payment may be.
Federal Unemployment: The CARES Act has broadened who is eligible for benefits and increased the payments. These benefits are in addition to state unemployment benefits. Recipients can receive $600 per week from the federal government in addition to the state benefits for a period of four months. Additionally, the Act adds 13 weeks of unemployment insurance, so individuals nearing their maximum number of weeks by their state would get an extension.
Freelancers, Contractors, & Self-Employed: Because these individuals do not usually qualify for unemployment, the act creates a temporary Pandemic Unemployment Assistance program to help those who have lost work as a direct result of the COVID crisis.
Tax Returns: The deadline for filing tax returns has been extended to July 15, 2020, but for those that have already filed, or are planning on filing their 2019 tax returns they can still expect to receive their refunds in a timely manner.
Insurance Coverage: All private insurance plans must over COVID-19 treatments and vaccines, and all coronavirus tests are free.
Small Businesses (under 500 employees)
Emergency Grants: Small businesses can receive up to $10,000 in emergency funds to cover operating costs.
Forgivable Loans: The Small Business Administration can provide loans up to $10 million per business to maintain payroll, keep workers on the books, or pay rents, mortgages, and existing debts. The debts would be forgiven so long as the workers are employed through the end of June.
Existing Loans: Small businesses already using Small Business Administration loans can receive coverage of six months of payments.
Student Loans: If you have federally owned student loans, all loan and interest payments are deferred without penalty until September 30, 2020. Employers can contribute up to $5,250 to an employees student loan payments, and employees would not have to include that money as income.
Work-Study Funds: Schools are allowed to continue to pay work-study wages to students while schools are suspended or convert them into supplemental grants.
Students Forced to Drop Out: If students have had to drop out of classes due to Coronavirus their time away from school will not be deducted from their lifetime limits on subsidized loans or Pell Grant eligibility and will not be required to pay back grants or financial aid already received.