CARES Act: 4 key pieces for you. Helping you to understand the resources available to you through the newly enacted CARES Act.

Congress took swift action to provide relief to millions of Americans struggling to stay afloat during the Coronavirus/COVID-19 pandemic, passing the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act into law in late March. The bill is massive and offers aid across the economic spectrum — that is, if you can keep up with each opportunity you’re qualified to receive. With the world evolving at a breakneck pace during the Coronavirus/COVID-19 pandemic, it may be difficult to get a handle on the legislative efforts aimed at helping you. We’re here to help you understand the resources that are available, starting with four key pieces of the CARES Act for you. 

CARES Act: What to Know About Stimulus Payments:

If you set up your tax refund with direct deposit, you should get a stimulus check from the government worth up to $1,200 or $2,400 within about a week — though if you need a paper check the wait will likely be extended. 

  • Who Typically Qualifies:

    If you are a single adult with a Social Security number and an adjusted gross income of $75,000 or less, you are qualified. If you are a married couple filing joint returns, to receive the full stimulus check, your maximum income can be $150,000. If you’re a single filer who earns more than $99,000 or a joint filer with an income exceeding $198,000, you are not qualified for any stimulus payments. Unfortunately, neither are people over 16 who are claimed as dependents by their parents (which encompasses many college-aged people). To determine if you’re qualified, the IRS will use your latest tax return (2019 or 2019) or a 2019 Social Security statement showing your income if you have not yet filed taxes for 2018 or 2019.

  • How Much You Might Get:

    The majority of adults across the country will get a singular payment of up to $1,200 and married couples will receive up to $2,400, though the precise total depends on your income. American adults will also receive an additional $500 for every qualifying child. Understand that your stimulus payment will be lessened by $5 for every $100 you make above the thresholds listed above. You do not need to apply to get a stimulus check.

  • When Might This Resource Be Accessible:

    The precise dispersal date is still unknown, but the federal government is aiming to make direct deposit payments by April 17. On April 2, Treasury Secretary Steve Mnuchin said that qualified US adults who have signed up for direct deposit payments should get them within two weeks. Unfortunately, if you need a paper check, you are likely to experience some delays. For millions of people across the country, some $30 million in paper checks won’t begin being distributed until April 24 because the government doesn’t have their banking information. The lowest-income Americans are scheduled to get their paper checks first, per IRS plans.

What to Know About Small Businesses:

Small business owners may apply for aid in the form of a partially or fully forgivable loan covering 250 percent of average monthly expenses as a part of the approved Paycheck Protection Program. 

  • Who Typically Qualifies:

    Businesses, nonprofits, veteran’s organizations and tribal businesses with 500 employees or less are qualified. There are exceptions for businesses with over 500 employees if they meet the Small Business Administration’s size standards for their given industries. Independent contractors, gig economy workers, sole proprietors and self-employed people are all qualified for the program as well. You can apply for the Paycheck Protection Program at any lending institution approved to take part through the existing SBA lending program — which is composed of thousands of banks and might include the bank you already use. But, you may have an easier time if you apply with the bank currently handling your business accounts. Expenses can be forgiven during any eight-week stretch from Feb. 15, 2020 to June 30, 2020, and borrowers can choose which eight weeks they want to count toward their loan period. The loan is forgiven at the conclusion of the 8-week period after it is granted, with one condition:  To qualify for forgiveness, employers must retain their employees at their current base pay, or face a reduction in forgiveness equivalent to the percent decrease in number of employees. If you have already laid off some employees, you can still be forgiven for the full amount of your payroll cost, provided you rehire your employees by June 30, 2020. The application deadline for the Paycheck Protection Program is also June 30.

  • How Much You Might Get:

    A small business is qualified to borrow the lesser of 250 percent of its average monthly expenses (aimed to cover about 8 weeks of payroll expenses) or $10 million. Borrowers are eligible for loan forgiveness equivalent to the amount spent on covered expenses during the 8-week loan period, which include a majority of a business’s standard operating costs: payroll, rent, utilities and mortgage interest obligations.

  • When Might This Resource Be Accessible:

    Unfortunately, this is still unknown, as the program has experienced problems with its launch. After a slow start, banks have started to open up loan application portals and have been deluged by a huge influx of applications. Additionally, they are continuing to sort out their lending capacity, as well as to process hundreds of thousands of applications from small business owners. Once you apply, your lender should send you confirmation that they’ve received your application. On April 6, the Federal Reserve Bank said it would help facilitate lending to small businesses, which presumably will accelerate the process of distributing money. Follow up with your local lending institution for more exact information, and we will continue to update this article as additional details become accessible. 

CARES Act: What to Know About Student Loans:

The government has automatically suspended student loan payments and interest on federally held student loans until Sept. 30.

  • Who Typically Qualifies:

    Most federal student loan borrowers are qualified. However, some student loans do not qualify for this benefit, including loans under the Federal Family Education Loan (FFEL) Program, private student loans owned by commercial lenders and some Perkins Loans that are held by the institution you attended.

  • How Much You Might Get:

    If you qualify, you will receive an automatic suspension of principal and interest payments on federally held student loans through Sept. 30, 2020, though that date may be extended with additional legislation.

  • When Might This Resource Be Accessible:

    Earlier in March, the federal government waived student loan payments and interest for 60 days and this new directive extending that period is already in place, retroactive to March 13. Federal student loan borrowers do not need to take any action to suspend payments, as your federal loan servicer will automatically suspend them. 

What to Know About Unemployment Benefits:

Many Americans who aren’t usually qualified to receive unemployment benefits are likely to receive them, and additional funds are available for those benefits 

  • Who Typically Qualifies:

    The CARES Act expands who qualifies for unemployment to encompass most workers who have experienced job loss related to COVID-19. You may qualify if you are sick or have been exposed to the coronavirus; if you must care for someone in your immediate family who is sick with the coronavirus; if you cannot reach your place of work because of a quarantine; if you are an at-risk individual who needs to self-quarantine in order to avoid getting sick. However, if you continue to work remotely and receive a paycheck from your employer, it’s unlikely you’ll be qualified for unemployment. If you are asymptomatic (showing no signs of the virus) and are not part of a high-risk demographic but choose to stay home from work, you are also unlikely to qualify for unemployment.

  • How Much You Might Get:

    This answer depends on your state. As a part of the Paycheck Protection Program, qualified workers will get an extra $600 per week from the federal government on top of their state benefit. Per the Labor Department, as long as you’re qualified for at least $1 of state-level or federal unemployment compensation, you get the full $600. Unemployment benefits are subject to federal income taxes and most state income taxes.

  • When Might This Resource Be Accessible:

    This is also unclear. States are being overwhelmed by unemployment benefits applications as the country’s unemployment rate is estimated to be at its highest since the Great Depression, according to The New York Times. In response to the crisis, states have also been incentivized to waive the standard waiting period between the time workers become unemployed and when they are qualified for benefits, which has led to more applications. With all that in mind, the additional $600 will hit your bank account depending on when your state signed an agreement with the Department of Labor. The week ending April 4 or 5 (depending on how your state lays out its calendar) is the first week for which unemployed workers can claim the new federal benefit. Still, expect delays and long wait times before you get your money. 

Understanding the resources available to you and your loved ones is difficult and the situation is constantly evolving. Check our Coronavirus/COVID-19 Information Center for a list of more resources.

More on Topics Related to CARES Act: 4 Key Pieces for You

Coronavirus 2020: Effectively Working from Home

5 Ways to Prepare for a Recession

Coronavirus and Financial Stress March 2020

Coronavirus and Financial Stress: How Will Employees React?

COVID-19 2020: Managing Employees During the Coronavirus Pandemic