The recently enacted CARES Act is designed to provide emergency relief to Americans experiencing economic hardships resulting from the COVID-19 Virus.
For Individuals
- One-time direct deposits of up to $1,200 for individual taxpayers with incomes up to $75,000 and $2,400 for joint filers with incomes up to $150,000. An additional $500 for each eligible child can also
- Extended unemployment insurance for the self-employed, independent contractors, and gig economy workers–such as Uber drivers.
- Rules and penalties for some retirement fund distributions and loans have been adjusted or delayed.
For Small Businesses
- Employers can defer the payment of their portion of 2020 payroll taxes until 2021 and 2022.
- $350 billion is dedicated to small business relief to prevent layoffs and business closures and includes:
- Paycheck protection program for up to 8 weeks of payroll coverage.
- Economic Injury Disaster Loans and Loan Advance federal disaster loans for businesses, private non-profits, homeowners.
- The 80% rule from the the Tax Cuts and Jobs Act (TCJA) net operating loss is lifted, and losses can now be carried back five years.
- The excess loss limitation (ELL) rules for pass-through entities are suspended.
- The limitation on the deduction for business interest expense increased from 30% to 50% for tax years 2019 and 2020.
- $150 billion is dedicated to state and local governments that are beginning to introduce their own business grant and loan programs in states like Florida, Michigan, and New York. Find specific provisions for your state through your governor’s website; see a full list on the National Governors Association site.
Read more about disaster relief efforts under way on our website.
Resources: Read the full text of the CARES Act: https://assets.documentcloud.org/documents/20059055/final-final-cares-act.pdf
Reference for summary of highlights: https://www.forbes.com/sites/leonlabrecque/2020/03/29/the-cares-act-has-passed-here-are-the-highlights/#257f7e6a68cd
