What the CARES Act (coronavirus relief) means to you

What the CARES Act (coronavirus relief) means to you

Bottom Line: As Congress was feverishly writing a sweeping new 880-page bill, which will be the most extensive and expensive emergency action in United States history, I was working to disseminate what it will mean to you...aside from a lot more debt we’re all liable for as taxpayers. I'll break it down by individuals/families and businesses. 

Individuals:

  • Cash payments of up to $1,200 for individuals who earn $75,000 or less & $2,400 for couples who earn $150,000 or less. Lower amounts available for those who earn under $99k individually or $198k as a couple. 2019’s taxable income will be used as the threshold unless you haven’t filed taxes yet – in which case 2018’s taxable income will be used instead.
  • $500 payments per child using the same income thresholds for eligibility up to $3,500 per household (inclusive of all payments).
  • No out-of-pocket medical expenses for any COVID-19 related testing and treatments regardless of insurance plan, company or status. 
  • Unemployment benefits extended by 13 weeks, to a total of nine months, with four months of “enhanced” benefits which will payout an additional $600 per week beyond existing benefits. 
  • Suspends student loan payments through September with no interest or penalties.

Businesses: 

  • Favored industries with targeted relief include: Airports, Airlines, cargo carriers, Hospitals & Businesses deemed critical to national security.
  • $350 billion for small businesses who retain all employees during the crisis - with the ability to claim up to $10 million in relief per business. Businesses would have to pay the money back with zero interest if they reduce payrolls at any time until the National Emergency declaration is lifted. If payrolls are maintained, 50% of the loan is forgiven as a fully refundable tax credit. 
  • $500 billion pool for large companies, independent of those offered targeted relief. $425 billion for distressed company loans. $75 billion for specific industry loans. All companies receiving federal assistance will have to agree to the following...No stock buybacks until a year after all terms of the assistance are met/repaid & no raises for employees who earned $425,000 or more for a minimum of two years. 
  • Delaying 2020’s employer payroll tax bills (half to be paid in 2021 & half to be paid in 2022).
  • Businesses owned or controlled by any federal politicians, including President Trump’s - Trump Organization, aren’t eligible for aid.

Based on what we know, just over 70% of Americans will be directly impacted by this legislation (independent of the 100% of us impacted through tax collection).

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