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What Coronavirus Aid, Relief and Economic Security Act (CARES) Means for You

  • by secure_investors
  • Posted on 13 April, 2020

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. This $2 trillion emergency relief package is intended to assist individuals and businesses during the ongoing coronavirus pandemic and accompanying economic crisis. Major relief provisions are summarized here:

Unemployment Benefits

  • An additional $600 weekly benefit to those collecting unemployment benefits, through July 31, 2020
  • An additional 13 weeks of federally funded unemployment benefits, through the end of 2020, for individuals who exhaust their state unemployment benefits
  • Targeted federal reimbursement of state unemployment compensation designed to eliminate state one-week delays in providing benefits
  • Unemployment benefits through 2020 for many who would not otherwise qualify, including independent contractors and part-time workers

Economic Stimulus Checks

Most individuals will receive a direct payment from the federal government. Technically a 2020 refundable income tax credit, the rebate amount will be calculated based on 2019 tax returns filed (2018 returns in cases where a 2019 return hasn’t been filed) and sent automatically via check or direct deposit to qualifying individuals. To qualify for a payment, individuals generally must have a Social Security number and must not qualify as the dependent of another individual.

The amount of the recovery rebate is $1,200 ($2,400 if married filing a joint return) plus $500 for each qualifying child under age 17. Recovery rebates are phased out for those with adjusted gross income (AGI) exceeding $75,000 ($150,000 if married filing a joint return, $112,500 for those filing as head of household). For those with AGI exceeding the threshold amount, the allowable rebate is reduced by $5 for every $100 in income over the threshold.

Rebate Amounts/Phaseout Ranges

Filing StatusPayment AmountPhaseout ThresholdPhaseout Completed
Married Filing Jointly$2,400$150,000$198,000
+ 1 Child$2,900$150,000$208,000
+ 2 Children$3,400$150,000$218,000
Head of Household$1,200$112,500$136,500
+ 1 Child$1,700$112,500$146,500
+ 2 Children$2,200$112,500$156,500
All Others$1,200$75,000$99,000

While details are still being worked out, the IRS will be coordinating with other federal agencies to facilitate payment determination and distribution. For example, eligible individuals collecting Social Security benefits may not need to file a tax return in order to receive a payment.

Other Legislative Relief

Signed into law roughly two weeks prior to the CARES Act, the Families First Coronavirus Response Act (FFCRA) also included relief provisions worth noting:

  • The requirement that health plans cover COVID-19 testing at no cost to the patient
  • The requirement that employers with fewer than 500 employees generally must provide paid sick leave to employees affected by COVID-19 who meet certain criteria, and paid emergency family and medical leave in other circumstances
  • Payroll tax credits allowed for required sick leave as well as family and medical leave paid

There is likely to be a steady stream of guidance forthcoming with details relating to many of these provisions, so stay tuned for more information. We’re here to help and to answer any questions you may have.

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