Coronavirus Relief – CARES Act Approved for Individual and Business Help

In efforts to provide Coronavirus relief, Congress has come to an agreement on the CARES act stimulus bill. Learn the latest about what that means for you.

tax planning

In efforts to provide Coronavirus relief, the Senate has passed a stimulus bill from Congress that is known as the CARES Act. The White House indicated it is acceptable to the president as well. The exact details are not clear yet, but the major provisions have been revealed.

The New York Times reports that there are five key provisions, noted below, although there still may be some uncertainty about the exact numbers.

Direct Payments to Taxpayers for Coronavirus Relief

Coronavirus relief

The NYT reports $1,200 in direct payments to each taxpayer, with phaseouts for those earning between from $75,000 to $99,000, plus an additional $500 per child. The Wall Street Journal has the same numbers, without specifying the phaseouts.(Those with little or know tax liability might receive only $600.)

For the purpose of calculating the amount, the government will use 2019 returns, if they’ve been already filed. Otherwise they will use 2018 returns.The money will be directly deposited into taxpayers’ accounts, if the IRS has account information. Otherwise, it will mail paper checks. This could happen in the next few weeks.

Unemployment Benefits Increased and Radically Changed

The NYT says the bill extends jobless insurance by 13 weeks and includes a four-month enhancement of benefits. Insiders, according to the NYT and WSJ, say that gig workers such as freelancers and Uber drivers will also be covered, a major change in how unemployment insurance works.

According to the New York Times, eligible workers will get an extra $600 per week on top of their state benefit.

READ MORE: Coronavirus Relief Package Signed Into Law – More to Come

Coronavirus Relief Gives Small Businesses Aid With Conditions

A major sticking point in the negotiations was whether aid should go to businesses or to individuals. A novel provisions does both: The government will guarantee loans to small businesses and forgive those loans if the companies keep their employees. This gives these businesses a strong financial incentive to avoid layoffs.

Federal Reserve Loans — With Heavy Oversight

Coronavirus relief

This was another controversial provision — billions of dollars in a fund controlled by the Federal Reserve. Opponents characterized this as a slush fund that benefits companies at the expense of their workers.

However, additional conditions helped ensure its passage; the government will immediately reveal any recipients, and an inspector general and a congressionally appointed board will monitor it, according to the NYT. The WSJ noted companies receiving these loans cannot do stock buybacks now or in the near future. The total amount of the loan fund is estimated to be about $500 billion.

READ MORE: Tax Filing Deadline Extended to July 15 Due to COVID-19

Coronavirus Relief Health Assistance

The bill includes upward of $100 billion in aid to hospitals.

Again, none of these numbers are final, and the bill has not yet been signed, although there is wide agreement it will go through as is. We’ll have more updates as they become available, including information on the mechanism for distributing the aid checks.

© 2020

Get Our Newsletter

Get my bi-weekly newsletter with helpful tax resources and keep us at hand in case you ever need our help.
You’ll also receive a special discount code for signing up!

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.