Update: The House of Representatives voted to approve the CARES Act today, and it is heading to President Donald Trump’s desk to be signed into law. CARES will help American citizens during these uncertain economic times, give our nation’s healthcare infrastructure the resources it needs, and will provide funds to small businesses and self-employed individuals.
As the Senate voted 96-0 late Wednesday on the historic CARES Act, we’re getting a clearer picture of what is included in the legislation. This bipartisan agreement is the largest rescue package in American history.
The plan, called Coronavirus Aid, Relief, and Economic Security Act (CARES) offers direct cash payments to individuals. Specifically, single Americans would receive $1,200, married couples would get $2,400, and parents would see $500 for each child under age 17. Those payments would decrease for those making more than $75,000, with an income cap of $99,000 per individual or $198,000 for couples.
Nearly 90% of Americans would be eligible to receive full or partial payments, according to estimates by the Tax Policy Center. Qualifying income levels would be based on 2019 federal tax returns if you have already filed. If you have not, data would be extracted from your 2018 tax returns. During negotiations, it was determined that a broad net of help was needed to keep the economy strong. Moreover, there are provisions in the bill to include those who don’t earn enough to file returns, but some people may be missed despite efforts to help everyone.
There are some exceptional and unprecedented provisions that will help companies to stay in business and retain their employees when the pandemic ends. The provisions include:
- Help to replace the salaries of furloughed workers for four months from their initial date of separation. Furloughed workers in North Carolina would get whatever amount the state typically provides for unemployment with an additional $600 per week added on to that amount.
- The “gig economy” is also addressed for the first time. The gig economy is comprised of jobs that are flexible, temporary, or freelance. These jobs often involving connecting with clients or customers through an online platform like driving for Uber or delivering for Postmates. Forbes estimates that approximately 57 million people work in the gig economy.
- There is an “employee retention” tax credit that is thought to provide $50 billion to companies that retain employees on payroll and cover 50 percent of workers’ paychecks.
- Companies would also be able to defer payment of the 6.2 percent of Social Security payroll tax.
Individuals should not expect to receive these direct payments until May at the earliest because of the complexities related to discerning how much individuals should receive and the process of getting direct payments or checks to recipients.
The relief package also addresses the economic stress that has been placed on hospitals and small businesses around the country. The bill is expected to include nearly $100 billion in assistance for hospitals; $350 billion in assistance to small businesses; $500 billion in aid for corporations like airlines that have been devastated by the virus; and about $150 billion for state and local stimulus funds. Additional provisions from a related package include:
- More than $4 billion to health agencies;
- $200 million to help nursing homes cope with the challenge;
- $45 billion for FEMA’s Disaster Relief Fund and millions more for FEMA grants;
- $400 million in election assistance to help states expand early voting and vote-by-mail options.
The House hopes to vote on the bill today.
Congress has already enacted the Families First Coronavirus Response Act which expanded provisions for family and medical leave.
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