The Coronavirus has impacted every one of us in one way or another. During this pandemic our personal lives as well as our professional lives have been obstructed. On March 27, 2020, the CARES Act was signed into law to try to help alleviate some of the economic stressors which have impacted individuals as well as businesses. Here are a few take-away's that may help during this time.
A one-time direct payment of $1200. will be available to individuals whose incomes are less than $75,000 and married couples whose combined incomes are less than $150,000. In addition, there is a dependent child credit for $500. for children under the age of 17. Tax records from 2019 and 2018 will be used to verify the information.
California will continue to pay unemployment benefits. In addition to the state unemployment, the CARES Act expands the benefits to include an additional $600 per week for four months on top of the amount the state programs pay. The plan also extends unemployment benefits through 2020 for all eligible workers.
Independent contractors are not eligible to received unemployment compensation as well, along with the additional $600 per week. You can check out the link below on how to file.
Small Business Relief
A $350 billion dollar Small Business Loan package was part of the $2.2 Trillion Dollar CARES Act. Companies with 500 employees or less may be able to receive up to 8 weeks of payroll assistance to prevent layoffs and keep employees working. This loan from the government, may be forgiven or partially forgiven as long as the monies are used for payroll costs, rent, utilities or mortgage interest payment. Call your bank or lender to see if they are offering this this program.
Use of Retirement Funds
The CARES Bill waives the traditional 10% withdrawal penalty on withdrawals up to $100,000 for coronvirus-related needs. There will still be taxes on these withdrawals, however, they will be spread over a three year period. There will also be a three-year period to pay back the withdrawal to avoid the tax penalty.
Loan limits from your 401(k) have also been increased to $100,000 from $50,000.
For more information on the CARES Act, please go to: Forbes
Stay Safe, Be Kind and Keep Healthy.