On Friday, March 27, 2020, President Trump signed the Coronavirus Aid, Relief and Economic Security (CARES) Act into law. This package allocates $2 trillion toward an effort to give economic relief to individuals, small businesses, healthcare providers, and parts of the economy that are heavily affected by the coronavirus pandemic.
The CARES Act is large, with many programs that affect several sectors, so we have aggregated content and summarized in a way that is hopefully more focused as this Act applies to you.
Individuals and Families
Individual Stimulus Payments
Single Americans are set to receive $1,200 while married couples will receive $2,400. Parents of children under the age of 17 will get an additional $500 for each child.
Payments are first allocated to individuals with adjusted gross incomes of $75,000 or less ($150,000 or less for joint taxpayers) and phase out for individuals and families making more than $75,000 ($150,000 for joint taxpayers).
These payments will not be counted as taxable income for recipients.
Qualifying income levels will be based on 2019 federal tax returns, if already filed, and otherwise on 2018 returns.
Tax Due Dates and Payments
Tax returns are typically due on April 15th, however, the tax return due date has been extended to July 15th. Currently, the 2020 second quarter estimated tax payments are still due on June 15th.
Unemployment Insurance and Grants
A temporary Pandemic Unemployment Assistance program is created to offer payment to those who are not traditionally eligible for unemployment benefits. This program runs through December 31, 2020 and will give up to $600/week to each recipient for up to four months.
Small Business Interruption Loans
The CARES Act provides eight weeks of cash-flow assistance for qualifying businesses of fewer than 500 employees, or the small business size standard associated with that industry. This includes franchises, sole-proprietors, and the self-employed.
This program provides aid for businesses within the dates of February 15, 2020 through June 30, 2020 for qualifying businesses. Small business interruption loans are available through SBA-certified lenders.
If you are a qualifying business, here is a useful document on the Paycheck Protection Program with instructions and answers to frequently asked questions:
Short-Term Compensation Programs
$100 million in federal grant funding has been allocated to help employers reduce employee hours rather than laying off workers. Impacted employees will get a pro-rated unemployment benefit.
Severely Impacted Sectors of the Economy
The Treasury Secretary has $500 billion for loans, loan guarantees, and other investments to help support industries that have been or will be heavily impacted by the pandemic. This includes States and municipalities with direct or indirect losses as a result of COVID-19 pandemic.
Payroll Tax Credit
Provides a payroll tax credit for 50% of wages paid up to $10,000 to qualifying employers whose operations were fully or partially suspended, or whose gross receipts declines by more than 50% during the pandemic.
COVID-19 Testing Coverage
Requires that all COVID-19 testing is covered by group health plans and individual market issuers including tests without emergency use authorization by the Food and Drug Administration (FDA). Tests are to be covered with no member cost-sharing.
COVID-19 Testing Payment
Commercial insurers are required to pay either:
1. The contracted rate between the provider and the insurer in effect before the public health emergency was declared
2. If there is no contract, a cash price posted on a public website by the provider
COVID-19 Vaccine Coverage
Commercial insurers are required to cover any coronavirus preventive service as defined by the U.S. Preventive Services Task Force. Any Medicare and Medicare Advantage organization must cover any COVID-19 vaccines with no cost-sharing.
Telehealth and High-Deductible Health Plans (HDHPs)
A safe harbor is established for HDHPs that have telehealth benefits and other remote care services before patients satisfy the applicable minimum deductible. (Most EMI Health medical plans have TeleMedicine included with $0 copays)
We recommend that individuals and business owners consult with you tax professionals to learn more about how each of these provisions as well as others included in the CARES Act apply to you specifically.
Read the bill in full here.