See below for programs and information from the recently passed CARES Act that may benefit you, your family, or business.
Assistance for Individuals and Families
Cash Payment: Payments will be $1,200 per individual or $2,400 for couples filing jointly, plus $500 per eligible dependent child. The amount you will receive will be based on your 2018 or 2019 tax return. Individuals making $75,000 or less or married couples making $150,000 or less will receive the full amount. The rebate is phased down after that. Individuals making more than $99,000 or couples making more than $198,000 will not receive checks.
- Non-Tax Filers
- Those who don’t file returns can receive the rebate by filing a tax return for the 2019 tax year (Deadline is July 15, 2020).
- Social security beneficiaries are also eligible. Payments will be made based on information provided by the Social Security Administration.
The CARES Act increased the benefits and expanded eligibility for unemployment. The bill adds $600/week payment increase to existing unemployment benefits allowed by the worker’s state through the end of July. The bill will also provide an additional 13 weeks of benefits beyond what states typically allow for those who need it. This provision expires at the end of 2020. Please contact the CA Employment Development Department for details and application help.
The CARES Act expands unemployment benefits to cover self-employed and independent contractors who do not usually qualify for unemployment, by creating a new temporary Pandemic Unemployment Assistance Program through the end of 2020.
Older Americans who are subject to mandatory minimum distributions from their retirement accounts will have the option to suspend mandatory minimum distributions without penalty for 2020. Additionally, the law also waives the 10% penalty on for early distributions from 401(k)s and IRAs taken in 2020, as long as the withdrawal is due to certain coronavirus-related reasons.
The CARES Act allows federal student loan borrowers to pause payments for six months. The Department of Education will also waive all interest that would normally accrue during this period. This does not apply to private lenders.
The CARES Act created a new Paycheck Protection Loan program for small businesses and 501(c)(3)s with less than 500 employees, providing $10 billion for grants of up to $10,000 to provide emergency funds to cover immediate expenses. There is $350 billion allocated for the Small Business Administration to provide loans of up to $10 million per business. Any portion of the loan used to maintain payroll, pay for rent, mortgage and existing debt could be forgiven, provided workers stay employed through the end of June. There is also $17 billion to cover six months of payments for small businesses already using SBA loans.
Small Business Development Center Orange County and Inland Empire
Small Business Development Center Los Angeles
The CARES Act creates an Employee Retention Credit, which is a refundable payroll tax credit available for businesses affected by the coronavirus to help them keep their workers employed. The credit is for wages paid by eligible employers from March 13, 2020 through December 31, 2020.
- The credit is available to employers whose operations were fully or partially shut down by government orders due to the coronavirus, or whose quarterly receipts are less than 50% for the same quarter in the prior year.
- Employers that receive Paycheck Protection loans are not eligible.
- Wages that qualify for the required paid leave credit are not eligible for the credit.
- Wages paid to employees during the period which they are furloughed or on reduced hours due to employer’s closure or economic hardship are eligible for the credit.
- For employers with 100 or fewer employees, all employee wages qualify for the credit, regardless of whether they are furloughed or face reduced hours.
Additional Small Business Tax Relief
Delayed Payroll Tax Payment: The CARES Act authorizes employers to delay the payment of their 2020 payroll taxes until 2021 and 2022, providing businesses with an extra $300 billion in cash flow.
Carry-Back Losses: The CARES Act allows businesses to carry back losses from 2018, 2019, and 2020 to the previous 5 years, which will allow businesses access to immediate tax refunds.
Investment in Improvements: The CARES Act fixes cost recovery for investments in Qualified Improvement Properties, which will allow businesses that made these investments in 2018 and 2019 and receive tax refunds now.
Health Insurance Coverage, HSA and Flexible Spending Account
The CARES Act requires all private insurance plans to cover COVID-19 treatments and vaccine and makes all coronavirus tests free. The bill ensures individuals can use health care accounts, like HSAs and Flexible Spending Accounts (FSAs), to buy over-the-counter medicines tax-free without a prescription. In addition, high deductible health care plans with HSAs will now be able to provide coverage pre-deductible for telehealth services.