The CARES Act
The CARES Act was signed into law Friday, March 27, 2020, in response to the COVID-19 pandemic. The legislation is historic in the size of stimulus it provides to backstop the economy and the speed in which it passed with bipartisan support. The legislation impacts almost every American. Below is a list of the key provisions and related resources for your review.
Provisions For All Individuals
Recovery Rebates – Personal Checks provided from 2020 tax credits.
- $1,200 for individual and $2,400 for married couples (Additional $500 per
child under 17)
- Income phaseouts will be applied based on your last filed tax return (2018
or 2019, depending on if your 2019 taxes have been filed).
- For more specifics: https://www.thebalance.com/stimulus-checks-3305750
Retirement Account Provisions – Ability to use IRA assets (without penalty) for
- Access to IRA assets without early distribution penalties for those 59.5 or
- Increased flexibility to borrow from employer retirement plans like 401ks.
- Must be able to show impact or hardship because of COVID-19.
- For more specifics:
Unemployment Compensation – Pandemic Unemployment Insurance
- Includes self-employed individuals that are typically not able to draw
- Up to $600 additional benefits per week for individuals.
- For more specifics: https://www.stroock.com/publication/cares-act-expands-relief-for-workers-affected-by-pandemic/
Student Loan Benefits – Deferment for Federal Student Loans
- No payments required until September 30th .
- No interest being charged or accrued against borrowers.
- For more specifics: https://www.studentloanborrowerassistance.org/whatthe-cares-act-means-for-repayment-of-federal-student-loans/
- Medicare participants can request of up to 90 days of supply of
medication in advance.
- Free COVID-19 Vaccines – when available.
- For more specifics: https://www.dwt.com/blogs/employment-labor-andbenefits/2020/03/cares-act-key-provisions-employers
Small Business Provisions
- Paycheck Protection ProgramSBA Loan of up to 10 years at maximum 4% interest.
- SBA Loan of up to 10 years at maximum 4% interest.
- Some portions of the debt eligible for “forgiveness,” including amounts spent on wages, rent, utilities, etc. over eight week period following loan issuance.
- For more specifics: https://www.bclplaw.com/en-US/thought-leadership/what-businesses-and-lenders-need-to-know-about-the-cares-act-sba-lending-and-loan-forgiveness.html
- Employee Retention Credit – Ability to defer payroll taxes for 2020
- Eligible if a business was
required to suspend operations by the government or there was a 50% drop in revenue relative to the
same period last year.
Ability to defer up to $10k a quarter and spread out payments over 2021 and 2022.
For more specifics: https://www.reinhartlaw.com/knowledge/cares-act-includes-employee-retention-credit/
- Eligible if a business was
Our bullet points are not an exhaustive explanation but a quick guide to help determine which aid
might be relevant to each person. As always, the VAM team is available to walk you through any questions you may have.