CARES Act Details for Small and Medium Business

Below is summary of some great information on the CARES Act that’s recently been passed in an effort to help small and medium size businesses. Hope this helps!

Individual and Family Payout:

- Direct payments of $1,200 per adult and $2,400 per couple
- $500 per child with payments reduced if you have adjusted gross income over the following thresholds….
• $75,000 for single filers.
• $112,500 for single heads of household.
• $150,000 for married couples filing jointly.

UNEMPLOYMENT BENEFITS:

- The plan is inclusive of both self-employed and part-time workers (not typical).
- Those who are unemployed, partly unemployed or can’t work due to the coronavirus (need to prove this) will be more likely to receive aid.
- Your state will dictate how much aid you receive.
- Benefits are now expanded to replace the average worker wages - Typically unemployment only covers 40-45%. The expansion in aid will look to bridge that gap.
- Eligible workers will get an extra $600 per week on top of their state benefit with some states being even more generous.

BUSINESS LOANS:

- $350 billion in federally guaranteed loans to businesses with 500 or fewer employees. Also available to the self employed and sole proprietors.
- The SBA will oversee this Paycheck Protection Program and distribute funds via banks to each small business. Google search your local SBA representative.
- Expedited origination process and loans will be available until June 30 2020.
- Loan forgiveness is available per a formula based on the amount of employees each small business keeps on payroll.
- Up to $10 million in funds are available for each eligible business. Your actual payroll amounts will dictate how much you are eligible for.
-Interest capped at 4%.

RETIREMENT ACCOUNTS:

- Waived standard 10 percent penalty on early withdrawals from IRAs and qualified plans for people who have been impacted by the coronavirus. In addition, it increases the ceiling on loans (401k loans i.e.) against a qualified plan to $100,000
-Applicable to those diagnosed with COVID-19 or experienced financial hardship from being quarantined, laid off or furloughed, or reduced hours.
-You will still pay tax on distributions but can spread out over three years of filing.
-You can put back what you take out without tax penalty. You have three years to do it.

REQUIRED MINIMUM DISTRIBUTIONS (RMDs):

-No requirement for this year.

STUDENT LOANS (Through September 30, 2020):

- No federal student loan payment.
- No interest on your federal student loan payments.