The CARES Act and You: What You Need to Know

At the end of March, Congress passed a $2 trillion stimulus designed to help those impacted by the COVID-19 pandemic

This stimulus package, also known as the CARES Act, is the most extensive aid package ever enacted. We’ll break down the many ways that this package will provide economic relief to anyone impacted by the pandemic.

Who Can Benefit

The CARES Act is designed to relieve the financial strain from a wide variety of Americans financially impacted during this crisis, including:

  • Students with federal loan payments
  • Gig workers and contractors
  • Small business owners
  • Airlines
  • Workers laid off or furloughed
  • Americans who need food assistance

Americans who have to care for family members and loved ones

Provisions of the CARES Act

Direct Payments to all Americans

Individuals who reported a gross income of up to $75,000 on their last tax return can get a direct payment of $1,200. Married couples with a gross income of up to $150,000 are also eligible for this payment. Parents will receive an additional $500 per child under the age of 17 reported as a dependent.

If you make more than these stated limits, not to worry. You may still be eligible for a smaller payment. The payments will be scaled down for individuals who make over $75,000 and couples who make over $150,000. The payments are phased out completely at a gross income of $99,000 for individuals and $198,000 for couples.

COVID-19 Testing & Paid Sick Leave

If you or a family member are diagnosed with COVID-19 and are insured, this bill provides funding to cover all costs of your diagnosis and care. This includes emergency room visits, any diagnostic testing needed, and any doctor visits. The package also includes things designed to help people who need to care for their loved ones, including:

  • Tax credits for small and mid-sized businesses to offer paid medical, family and sick leave;
  • Up to 12 weeks of protected leave for those in need that have been employed for 30 days, government employers and companies that have less than 500 employees;
  • Leave time to take care of children if COVID-19 has caused their care provider or school to be closed;
  • As much as 80 hours of paid sick leave to care for family members who have tested positive for the virus or have self-isolated due to the presence of COVID-19 symptoms.

Suspended Student Loan Payments

The CARES Act suspends all payments due on non-defaulted Direct Loans and FFEL federal loans from March 13 until September 30, 2020. This provision applies only to loans currently owned by the Department of Education. It does not apply to Perkins loans or commercially-held FFEL loans.

Loans to Small Businesses

Small business owners will also get assistance from this bill. It creates a $367 billion federally-guaranteed loan program for small businesses that do not fire their staff. These loans are available through June. These loans will be forgiven for employers that continue to pay their workers throughout the COVID-19 crisis. The bill includes money to cover current Small Business Administration loans, emergency grants, and up to $10 million in emergency relief per business.

Grants for Airports and Airlines

The airline industry will receive $32 billion in grants in order to cover wages and benefits for employees. They can access this money in the form of loans and loan guarantees. If they choose to accept assistance, they cannot use the money to give dividends to investors or buy back stock. They also cannot issue pay cuts or furlough employees until September.

Eviction/Foreclosure Protection

If you have a federally-backed mortgage and have been financially impacted by the pandemic, you can expect some relief. This bill grants up to 60 days leniency on mortgage payments with the opportunity to extend it for up to four 30-day periods. Foreclosures are restricted for a 60 day period that began March 18. Landlords who have a federally-backed mortgage are banned from evicting or charging penalties to tenants who don’t pay rent for a 120-day period.

Expanded Unemployment Benefits

In addition to the direct payments mentioned above, this bill expands the benefits currently available. People receiving unemployment are eligible to receive payments for an additional 13 weeks. They will also receive enhanced benefits for four months. You can also receive an additional $600 on top of the benefits from state unemployment programs. Unemployment benefits have been extended to include: gig economy workers, the self-employed, and independent contractors who are not usually eligible for unemployment assistance.

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