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Disclaimer: All information in this post should be seen as informational purposes. This is not financial or legal advice. For more Coronavirus resources, be sure to check out our COVID-19 Wedding Content Hub.

The CARES Act

With the signing of the CARES Act on March 27, a lot of moving pieces were put into place. Whether you are an individual or a small business owner, you are likely affected by this legislation which is one of the largest our country has ever seen.

There is a lot of information in the CARES Act, and we thought it would be a good idea to break down some of the most necessary information and provide you with resources you can use when trying to make sense of all of this.

In this article, we will cover both how individuals and small businesses are affected by the CARES Act.

CARES Act Info for Individuals

If you are an individual who has a Social Security Number and you are not claimed as a dependent on someone else’s tax return, then you will likely be receiving a payment from the federal government.

These payments are $1,200 for single taxpayers and $2,400 for married taxpayers. The amount of these payments will be adjusted based on how much income you reported on your 2019 tax return (or 2018 tax return if you have yet to file your 2019 return). 

For single taxpayers, if your AGI (adjusted gross income) in 2018 or 2019 was under $75,000 then you will receive the full $1,200 payment. If your AGI was greater than $99,000 then you will not receive a payment. If your AGI falls in between these two numbers, then you will receive a portion of the $1,200 payment.

For married taxpayers, if your AGI in 2018 or 2019 was under $150,000 then you will receive the full $2,400 payment. If your AGI was greater than $198,000 then you will not receive a payment. If your AGI falls in between these two numbers, then you will receive a portion of the $2,400 payment. 

Additionally, for each qualifying child, you will receive an additional $500. A qualifying child is defined as children under the age of 17 who provide for less than half of their own living expenses and lived with the taxpayer for more than six months. If you have a kid who is in college, they will likely not qualify you for the additional $500 payment, and they will not receive a payment themselves. 

So how will these payments be sent to you? 

If the IRS has direct deposit information on file for you, then the money will be sent directly to your bank account. This is the quickest way the IRS will be able to send you your payment. If you don’t have direct deposit information on file, the IRS will send you a check in the mail. You will want to double-check your most recent tax return to make sure the address you submitted is still accurate. 

A major concern people are wondering about is if your 2019 income is too high to qualify you for payment and you lose your job in 2020 will you be eligible for the $1,200 or $2,400 payment. The answer is yes, as long as your 2020 income is below the limits we mentioned earlier. You won’t see this money, though, until you file your 2020 taxes. When you file your 2020 taxes, you will receive a $1,200 or $2,400 tax credit based on your reported income.

Unemployment

If you have lost your job due to the coronavirus, we are sending our thoughts your way. We will all get through this together.

Any time someone loses their job for a reason that doesn’t involve illegal activities, they are likely eligible for unemployment. If you have lost your job, apply for unemployment benefits with your state government. Even if your working hours were greatly reduced, it could still be worth applying for unemployment.

On top of your state’s normal unemployment benefits, an additional $600/week will be added to your weekly payment, and you will be provided an additional 13 weeks of unemployment benefits.

Unemployment benefits are also being extended to self-employed individuals, freelancers and gig economy workers such as Uber drivers for the first time. You will need to prove that you lost income or opportunities due to the coronavirus. While the guidance is still vague, just be prepared that you will likely need to prove your situation before and after the coronavirus started.

There are millions of people trying to claim unemployment right now, so you will need to be patient when trying to contact your state. Remember that there is a human on the other end of the line when you try to contact your state regarding unemployment and that they likely had nothing to do with how long it took for you to get through to them.  

One final thing to note regarding unemployment: before filing for unemployment, check in with your employer and see if they are applying for any of the small business support packages. They might be able to re-hire you. This will get you your income back much more quickly than waiting for unemployment benefits.

Other Provisions to Note from the CARES Act

There are a few other things to note regarding the CARES Act that may or may not affect you.

  1. The 2019 tax filing deadline has been delayed to July 15, 2020. This gives you a few extra months to file your 2019 taxes.
  2. You can take a Coronavirus Related Distribution (CRD) from your 401(k) or IRA up to $100,000 if you meet one of the following criteria:
    1. You have contracted COVID-19
    2. Your spouse or dependent has contracted COVID-19
    3. You have lost your job, been furloughed or otherwise suffered heavy financial burden because of COVID-19

Typically, if you take money from a retirement plan early, you would owe regular income tax plus a 10% penalty on the money you withdraw. With the CRD, your distribution will be considered taxable income, but there will be no 10% penalty. This income can be spread over three tax years and must be repaid to your plan within three years. 

Before you take money out of your retirement account, please talk to your plan provider and/or a qualified financial professional to help you understand any tax or financial consequences of your actions. 

  1. If your student loans are owned by the federal government, then you will not have to make any payments until after September 30, 2020. You can still make payments if you want to, but it is not required. Additionally, your federal student loans will not accrue any interest until after September 30, 2020. Any payment you make will go straight to the principal balance of the loan. (source)
  2. If you have a mortgage that is backed by Fannie Mae or Freddie Mac, you may qualify for mortgage forbearance(i.e. delaying your mortgage payment). Contact your loan servicer to see if you are eligible for this assistance. (source)

What else can you do to help yourself (personally and financially) during this time?

Federal and state governments are providing support to many Americans during these uncertain times. While their support is great, you might be wondering what you can do to help yourself during this time. Here are a few suggestions.

Turn off the news

Limit your news intake to a certain number of minutes or hours per day. This will help your mental health and keep your mind focused on things you can actually control.

Start a new hobby

Learn how to make bread, teach yourself an instrument, start a workout routine, take an online yoga class (a lot are offering free classes!), do something new to keep your mind engaged with all this time at home. 

Get your finances in order

With so much down time, now could be a good time to review your budget with your significant other. Talk about your goals and how you are going to adjust your spending due to the current circumstances. Also, figure out what you will do with your stimulus payment if you will be receiving one.

Support local businesses and those in need

If you have the disposable income to do so, buy takeout or a gift card from your favorite restaurant or donate to your favorite charity. The resources will be greatly appreciated and will go so much further during a time like this.

Tidy up your resume

Despite all the doom and gloom, this will not go on forever. Use this as an opportunity to update your killer resume and be prepared for when the economy starts opening back up.

Apply for virtual jobs

Remote working opportunities are going to become more and more in fashion after all this is done. If you need money now, consider applying for a remote job on sites like Flex Jobs. Here is a link to their current remote job openings.

Spend time outside and with your family

Most states are under a shelter-in-place order. Depending on what that means for your particular state, use this as a time to get outside in the fresh air and enjoy some quality time with your family. Every tough situation needs a silver lining, and more time with the ones you love is good for the soul.


CARES Act Info for Small Businesses

Disclaimer: We are not providing financial advice. Please work with a qualified financial professional or institution to help you with these programs.

Individuals are not the only ones being affected by the coronavirus. Most non-essential businesses are shut down, and the government is providing federal assistance to all those in need. (source: Senate.gov)

In this section, we will highlight the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL). 

Paycheck Protection Program (PPP)

This program is designed to incentivize small businesses to keep their workers on their payroll. Any loan given out by this program will be 100% forgiven if all employees are kept on their payroll for eight weeks and the money is used for payroll, rent, mortgage interest and utilities.

This loan is limited to the lesser of ten million dollars or 2.5 times your average monthly payroll.

According to the SBA, any business, 501(c)(3) non-profit, veterans organization or Tribal business concern with less than 500 employees may be eligible for the PPP. This includes sole proprietors, independent contractors and self-employed people. 

You must have been in business on or before February 15, 2020 in order to qualify for the program, and you can only apply through June 30, 2020. If you feel you might qualify for this program, then apply! There is no harm in applying for the program. There will be an inquiry on your credit, but other than that there are no consequences for applying to any of these federal programs.

To apply for the program, you must go through an SBA approved lender. Check with your bank to see if they are an approved lender. If they are not, you can use this search tool to help you find an SBA approved lender (source). 

You can start applying for this program today, so don’t wait. The quicker you apply, the quicker federal relief will come your way.

Here are two great resources for the PPP:

  • US Senate Committee Small Business Owner Guide to the CARES Act (PDF)
  • SBA Website

Economic Injury Disaster Loan (EIDL)

The EIDL program is an existing program within the federal government that passes out low interest loans to small businesses in times of need. Due to the coronavirus and the signing of the CARES Act, a special advance has been put into effect.

By applying for the EIDL and requesting the advance, you could receive up to $10,000 within 3 days of applying.

According to the CARES Act, this advance does not need to be repaid under any circumstances. You can apply here

If you have not applied for this program, you should apply ASAP. Receiving up to $10,000 in a matter of days could be a huge benefit for many small businesses. 

To learn more about if your business qualifies, check out this resource as well as the Coronavirus emergency loans checklist.

We know you are going through a lot right now. Hang in there. We will all get through this together. 

Additional Small Business Financial Aid Resources:

  1. Apply for SBA Relief Loan: HERE
  2. Sara Blakely $5k Grant: HERE
  3. Hello Alice $5k Grant: HERE
  4. Freelancers Relief Fund: HERE
  5. Facebook Grant: HERE

Location Specific Resources:

  1. Maryland HERE
  2. NYC Grant $27k HERE
  3. Denver Small Business Grant HERE

More COVID-19 Resources

It’s been a tough few weeks for most of us, whether business-related or worrying about the safety of our families. I want you all to know it’s ok to not be okay right now.