By MARY BETH SALLEE
Jobe Publishing Reporter
On March 27, President Donald Trump signed into law a historic $2 trillion coronavirus emergency relief bill. Known as the CARES Act, the stimulus package came as the COVID-19 pandemic has continued to sweep across the nation, devastating families, businesses, and the economy.
According to Congressman Brett Guthrie, U.S. Representative for Kentucky’s 2nd Congressional District, elements of the stimulus package include relief checks sent to qualifying families and individuals, financial assistance for small businesses, and financial support for health care providers.
The CARES Act provides a one-time check as financial support for individuals and for families. Those eligible to receive the credit must have an adjusted gross income (AGI) that does not exceed certain criteria, have a valid social security number, and not be a dependent of someone else. Workers, social security beneficiaries, those receiving welfare, and many others are all eligible.
Of those eligible, individuals with an income at or below $75,000 ($112,500 for heads of household) will receive $1,200 and couples with an income at or below $150,000 will receive $2,400. For those with children under the age of 17, an additional $500 per child will also be received.
“There are expenses that people are having,” Guthrie said. “People aren’t working. They’ve got to pay rent. They have other things that they need to do. That’s what this money is for. It goes to the individual to spend. There are no strings attached to it.”
The tax rebate amount, however, will be reduced by $5 for each $100 a person’s income exceeds the above income limits. This means that for those without children, an individual with an income that exceeds $99,000 and couples with an income that exceeds more than $198,000 will not receive a tax credit.
The first checks are expected to arrive in bank accounts as soon as mid-April for those with direct deposit. Those without direct deposit may receive their check at a later date.
For small businesses, the CARES Act provides emergency grants and a forgivable loan program for businesses with 500 employees or less.There are also changes to rules for expenses and deductions meant to make it easier for companies to keep employees on the payroll and stay open in the near future.
With emergency grants, the act provides $10 billion for grants of up to $10,000 in emergency funds to cover immediate operating costs by small businesses.
The CARES Act also allocates $350 billion for the Small Business Administration (SBA) for loans of up to $10 million for each small business. Providing workers stay employed through the end of June, any portion of that loan may be forgiven if it is used to keep workers on the books or pay for rent or to maintain payroll. Mortgages and existing debt could also be forgiven. For small businesses already using SBA loans, the act also has $17 billion in relief for existing loans to cover six months of payments.
“What people need to do is contact their local financial officer, their local banker, and say, ‘I wanna participate in the Payroll Protection Program,’” Guthrie explained. “It’s a loan that can be converted into a grant. You can take a loan of up to eight weeks of two-and-a-half times your payroll. You have to maintain your payroll. The check that you write to your employees, the benefits you provide to your employees, it covers all of that.”
The CARES Act also expands unemployment insurance (UI) benefits via the Relief for Workers Affected by Coronavirus Act. Under this expansion, persons who would typically qualify for unemployment compensation benefits under State law would also be entitled to the Federal Pandemic Unemployment Compensation which is an additional flat-fee amount of $600 per week. These benefits, however, are not available for individuals who are already receiving paid leave benefit acts or those who are able to work remotely as from home.
“The way the unemployment insurance works is they will go to State unemployment,” Guthrie said. “They will get whatever they will qualify for under their income, and if it’s a commission income they just show what their last year’s income was. They will qualify for their income for what Kentucky unemployment would normally pay. That’s a percentage of your income, and then it’s an extra $600 per week that is added to that…The reason it was done that way was to find a median so to speak.”
Community and private health systems will also be supplemented via the CARES Act in order to meet the influx of new patients due to the COVID-19 pandemic. This includes, among other things, $11 billion put toward diagnostics, treatments and vaccines and $80 million for the Food and Drug Administration (FDA) to accelerate the approval of new drugs, $16 billion to the Strategic National Stockpile (SNS) for increasing the availability of equipment such as masks and ventilators, $100 billion for hospitals that are responding to the coronavirus outbreak, and $20 billion set aside for veterans’ health care.
The CARES Act also provides relief for those with federal student loans. Loan payments have been automatically suspended from March 13 through September 30, otherwise known as administrative forbearance. However, individuals can still make payments if he or she so chooses.
Also, during this time period, the interest rate is 0% on the following types of federal student loans owned by the U.S. Department of Education (ED): defaulted and non-defaulted FFEL Program Loans, defaulted and non-defaulted Direct Loans, and Federal Perkins Loans.
The FFEL Program Loans that are owned by commercial lenders and the Perkins Loans that are owned by the attended institution are not eligible for this benefit of the CARES Act at this time. Also, private students loans are not covered by the CARES Act either.
“There are a lot of things we had to do in the CARES Act for student loans,” Guthrie said. “One, if you don’t complete your semester, the school has to pay it back…So, there were provisions in there to make sure that universities, because students were no longer able to live on campus, the students didn’t owe that back…Students are supposed to be held harmless because of their post-secondary education has either shut down or doing classes remotely off campus. The students are, under the CARES Act, held harmless under that decision.”
For more information regarding the CARES Act and its numerous benefits, visit the U.S. Department of the Treasury website at https://home.treasury.gov/cares