Grow Financial Federal Credit Union
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April 9, 2020

CARES Act: An Overview of Key Points for Individuals and Small Businesses

The Coronavirus Aid, Relief and Economic Security (CARES) Act is a package of measures passed by Congress in response to the COVID-19 pandemic. We want to give our members a quick overview of some important aspects of this legislation so you can understand how you’ll be impacted. The CARES Act provides financial relief for individuals and small businesses in a number of ways, whether directly or indirectly.

Highlights for Individuals

  • Direct payments: If you file taxes, you could be receiving a direct payment. For individual filers with incomes up to $75,000, you’ll receive $1,200, while married couples filing jointly with incomes up to $150,000 will receive $2,400, plus an additional $500 per dependent child. Payments phase out in increments of $50 for each $1,000 you earn over the income threshold. The IRS tells you what you need to know about Economic Impact Payments. If you have delinquent obligations, the Treasury Offset Program may reduce the amount you receive.
  • Unemployment: Unemployment insurance (UI) will provide an extra $600 per week in benefits for four months and extend benefits through December 31 for eligible workers. Plus, the changes expand eligibility to include the self-employed, independent contractors and gig economy workers.
  • Use of retirement funds: The bill waives the 10% early withdrawal penalty for distributions up to $100,000 for coronavirus-related purposes, retroactive to January 1, for individuals under the age of 59 1/2. Withdrawals are still taxed, but the taxes can be spread out over three years.
  • Coronavirus testing: All testing and possible vaccines for COVID-19 will be covered at no cost to patients.

Want more info on stimulus checks? Select the button below to get details from the IRS about Economic Impact Payments, track your stimulus check, enter direct deposit info and more.

Learn More About IRS Economic Impact Payments

Follow guidance from the IRS for the most up-to-date instructions and information, including details on eligibility and circumstances that warrant returning a stimulus payment. As the IRS releases more information related to stimulus payments, such as rules about payments made to deceased individuals, our policies may be updated accordingly. We appreciate your patience as we navigate the ins and outs of current governmental regulations and do our best to stay ahead of the curve.

Important Information for Small Businesses

  • Small business relief: $350 billion is being dedicated to preventing business closures and layoffs, while many workers have to stay home during the outbreak. Some small businesses that maintain their payroll during the pandemic can receive up to eight weeks of cash-flow assistance. If employers maintain payroll, the portion of the loans used for interest on utilities, rent, mortgages and covered payroll costs will be forgiven.
  • Paycheck Protection Program, Economic Injury Disaster Loans and Emergency Grants, and Small Business Debt Relief: These programs are designed to help businesses through this difficult time. Each program has dedicated resources explaining all the details. The Small Business Administration (SBA) offers coronavirus small business guidance and loan resources. The Small Business Owner’s Guide to the CARES Act is a resource created by the U.S. Senate that explains the measures available to small businesses.
  • Payroll taxes: The bill allows employers to postpone the payment of their portion of 2020 payroll taxes until 2021 and 2022.

In addition to financial assistance for individuals and businesses, the CARES Act contains relief for hard-hit industries, including healthcare and agriculture, and additional funding for state and local governments.

This information is accurate as of the date posted.

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