Q&A on CARES Act: How much money will I get and when? Plus more questions answered

Published on Monday, 30 March 2020 16:44
Written by SUSAN CORICA

@coricaBP

The U.S. Senate unanimously passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act – a third COVID-19 relief package to help workers, families, hospitals and their staff, small businesses, and the unemployed during this crisis.

To help answer some of the many questions people have about what is in the CARES Act and how they can get assistance, Sen. Chris Murphy’s office has some answers.

Q: How will I know if I am getting a check or not? Do I have to sign up?

A: Individuals with adjusted gross income under $75,000 ($112,500 for head of household and $150,000 for joint filers) who are not dependents of another taxpayer are eligible for the full rebate. The rebates will be paid out as advance refunds (in the form of checks or direct deposit) based on your 2019 tax returns (or 2018, if a 2019 return has not yet been filed). Non-filers will have to file a tax return to qualify, but we are waiting on the IRS to provide more guidance.

These payments are available to anyone with a Social Security Number (but not an ITIN number), including those who have no income, as well as those whose income comes entirely from non-taxable, means-tested benefit programs, such as Social Security or Social Security Disability Insurance.

The rebate is treated like other refundable tax credits and not considered income, so it will not be taxed.

Q: How much will I get and when?

A: Each eligible adult in a household will receive $1,200 with an additional $500 for each dependent child in the household under 17.

These payments begin phasing out at a 5% rate for single filers above $75,000, head of household filers above $122,500, and joint filers about $150,000. For example, an individual earning $87,000 per year would receive a payment of $600, and an individual earning $99,000 per year and above would not receive a payment.

The IRS hopes to begin issuing the rebate checks within three weeks.

Q: Am I eligible for unemployment insurance?

A: You are eligible if you’ve been laid off, are working part-time, if you are self-employed, an independent contractor, and if you’re working in the “gig economy” because of COVID-19.

Q: What is the unemployment insurance benefit?

A: The exact amount you can receive through unemployment depends on your previous earnings and what you receive from the state, but between now and July 31, an additional $600 will be added to every unemployment compensation check, so no one will receive less than $600 per week. You can apply for unemployment insurance through the Connecticut Department of Labor.

If you exhaust the weeks of unemployment compensation available to you through CT DOL, you will be eligible for an additional 13 weeks of benefits. These benefits will be federally-funded, but you will still receive them through Connecticut.

Q: What relief is included for small businesses?

A: There are a number of programs to help small businesses.

Paycheck Protection Program (PPP):

The law includes nearly $350 billion to create a Paycheck Protection Program that will provide small businesses, nonprofits, and other entities with zero-fee loans of up to $10 million based on average monthly payroll costs.

Up to eight weeks of average payroll, mortgage interest, rent, and utility payments can be forgiven if the business retains its employees and their salary levels. Principal and interest payments can be deferred for up to a year, and all SBA borrower fees are waived.

This temporary emergency assistance through the U.S. Small Business Administration (SBA) and the Department of Treasury can be used in coordination with other COVID-financing assistance established in the law or any other existing SBA loan program.

Small Business Administration (SBA) Loans:

The law also includes $17 billion to further ease the burden on small businesses that use SBA loan products. Under the law, the SBA will cover all loan payments for existing SBA borrowers, including principal, interest, and fees, for six months.

The loan amount is based on average total monthly payments for payroll for the 12-week period beginning Feb. 15, 2019, or at the election of the eligible recipient, March 1, 2019, and ending June 30, 2019.

Emergency Economic Injury Grants:

The law includes $10 billion in funding for a provision to provide an advance of $10,000 to small businesses and nonprofits that apply for an SBA Economic Injury Disaster Loan (EIDL) within three days of applying for the loan.

EIDLs are loans of up to $2 million that carry interest rates up to 3.75% for companies and up to 2.75% for nonprofits, as well as principal and interest deferment for up to four years. The loans may be used to pay for expenses that could have been met had the disaster not occurred, including payroll and other operating expenses.

The EIDL grant does not need to be repaid, even if the grantee is subsequently denied an EIDL, and may be used to provide paid sick leave to employees, maintaining payroll, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments.

Refundable tax credits:

IRS will be posting information soon on these credits on its website ( www.irs.gov ), including information on how to obtain advance payment of these credits.

Payroll taxes:

The law defers payroll through the end of 2020. Deferred taxes will not become due until end of 2021 and end of 2022, with 50% of the liability being paid at each date.

Employee retention tax credit:

This is available for struggling businesses that are not eligible or choose not to participate in the new SBA Paycheck Protection Program.



Posted in New Britain Herald, Business, General News on Monday, 30 March 2020 16:44. Updated: Monday, 30 March 2020 16:46.