Essential Insights into the CARES Act

In a bid to support Americans through the challenging period of the COVID-19 pandemic, the CARES Act was passed by Congress in March 2020. This far-reaching relief package aims to stabilize the economy and provide economic recovery.

The CARES Act offers a variety of resources to help individuals and businesses navigate this crisis.

Supporting State and Local Governments

The Act includes a loan program to help state and local governments with their budgets during this crisis. Up to $500 billion in loans and grants are available for states, counties, cities, and other government entities.

Unemployment Benefits

For those who have lost their jobs, the CARES Act expands unemployment benefits. It provides up to 13 additional weeks of payments beyond the typical 26 weeks offered by states, as well as a $600 federal supplement to weekly unemployment payments.

Direct Payments to Individuals

Most individuals and households will receive direct payments as part of the CARES Act. Single taxpayers can expect up to $1,200, while married couples filing jointly can receive up to $2,400. There is also an additional $500 credit per qualifying child under 17.

Tax Credits

The CARES Act also expands and enhances other tax credits. For instance, it provides a new refundable tax credit for individuals, offering up to $1,200 per person or $2,400 for married couples filing jointly, plus an additional $500 credit per qualifying child under 17.

Assistance for Businesses

Businesses struggling to stay afloat will find help in the CARES Act. Cash payments, tax credits, and loans are provided to help businesses get back on their feet. The Act also includes loan and grant programs to help small businesses access capital, such as the Paycheck Protection Program and grants for targeted industries like arts, entertainment, and hospitality.

Employee Retention Tax Credit

The CARES Act provides an Employee Retention Tax Credit of up to $5,000 per employee for employers that retain their workforce during the pandemic.

Child Tax Credit

The CARES Act increases the Child Tax Credit from up to $2,000 per child to as much as $3,000 and allows taxpayers to receive up to $3,600 per child under six.

Targeted Assistance

Other sectors such as energy and manufacturing are eligible for up to $58 billion in targeted assistance under the CARES Act. Institutions eligible for government loans and grants of at least $500 million under the CARES Act include large corporations, state and local governments, and certain sectors critical to the economy affected by the COVID-19 pandemic.

Eligibility and Payment Amounts

Eligibility and payment amounts are determined using information from the most recent tax return (2018 or 2019).

Looking Ahead

With an effective plan in place, we can conquer anything together, as evidenced by the CARES Act. However, it's important to remember that the CARES Act can't fix every issue. It's a step towards economic recovery, but it will take time and effort from all of us to fully overcome the challenges posed by the COVID-19 pandemic.

Essential Insights into the CARES Act