What does the CARES Act mean for us?

The CARES Act, sometimes called the stimulus act, is the 852-page, $2.2 trillion bill that Congress recently passed to provide relief to individuals and businesses during the pandemic as we all stay away from being with others in this surreal world.

This following outlines some of the benefits of this act, some of which are still being worked out. 

Unemployment benefits

A big change under this law is that, through the end of this year, people such as those who are self-employed, including small business owners, gig economy workers (those who are contractors or who work on specific projects), and those who can’t go to work because of the COVID-19 should be eligible soon for unemployment payments.

These payments will cover an extra 13 weeks beyond the current maximum of 26 weeks that Maryland allows. Unlike what we’ve been used to with unemployment benefits, the typical waiting periods and job search requirements are being waived. However, those applying will likely need to have patience and persistence because the massive layoffs and number of people applying mean that both the federal and state systems are overwhelmed with those needing benefits and the need to process applications quickly.

Besides the waiver of job searches and waiting periods, federal payments of $600 a week over and above state payments will be available for new and existing claimants through the end of July.

The new benefits, of course, would remain taxable along with the usual unemployment benefits.

Another change is that nonprofits, tribes and governments who have to pay workers who claim unemployment benefits, would receive a cut in the percentage that they have to pay by 50%, with the federal government covering those costs.

Rebate checks

Though most who will receive the $1,200 stimulus payments (and $500 per child) will do so based on their 2018 or 2019 tax returns, others who typically don’t have to file taxes may receive benefits without doing so.

People receiving Social Security retirement and disability benefits will receive their individual $1,200 stimulus payments without having to take any action. These direct deposits will begin the week of April 9. However, if a person usually receives his/her benefits in a check, those checks will come much later this year.

People receiving SSI won’t automatically have a payment sent.

TurboTax has just announced a partnership with the IRS to create a free, online product to make it easy for people who don’t typically file to fill out a simple tax return. The form includes questions to help decide whether or not individuals need to fill out a simple tax return or not.

Once the form is completed and sent in online, the IRS notifies the individual that it has received the information. If at all possible, it’s helpful if individuals can choose a direct deposit option rather than a check as these payments will happen more quickly. For people receiving SSI or who have no income to report, this could be a great tool if someone has internet access.

Besides this option, plans are continuing to evolve about how such folks would receive the stimulus payment, given that most have not filed a tax return for 2018 or 2019.

Paycheck Protection Program

Other provisions, in some ways less significant but important, have to do with a waiver of the required minimum distributions that people who have IRAs have to take, a change in the deductions people can take for giving to charity in 2020, and tax credits for certain employers who keep employees on payroll.

Housing

Other protections in the law cover those struggling to pay for their housing. Homeowners who have federally backed mortgages will be eligible for a year-long forbearance or leniency on payments, without fees or additional interest. 

People who have FHA, Veterans Affairs or U.S. Department of Agriculture loans will be protected by a 60-day moratorium or hold on any foreclosures and evictions. Lastly, homeowners who hold federally-backed loans for multi-family rental properties will be eligible for 90-day loan forbearance. During this time, such owners are prohibited from charging late fees or evicting tenants who can’t pay.

Renters will also see protection from eviction or additional fees during this public health crisis.

More to come as this law unfolds. In the meantime, stay safe, wash your hands, keep a distance from other people, and, most importantly, stay home!

Yvonne Perret is the founder of SSI/SSDI Outreach, Access and Recovery (SOAR) and executive director of the Advocacy and Training Center in Cumberland.

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