The Coronavirus Aid, Relief and Economic Security (CARES) Act was passed with the intention of providing monetary assistance to U.S. taxpayers during the ongoing pandemic. Here’s what taxpayers need to know about how the legislation will affect them.
Help for Small Businesses
The CARES act provides a payroll tax credit to employers who continue to keep their employees on the payroll during the crisis after operations were suspended due to a shut-down order. It applies to the first $10,000 paid to each employee from March 13, 2020, to December 31, 2020. Business owners can also elect to defer their share of payroll taxes for the 2020 tax year and pay them back over the following two years.
Small businesses with fewer than 500 employees may also qualify for Small Business Administration (SBA) loans. They can get loans in the amount of either $10 million or 2.5 times the employer’s monthly annual payroll and expect the loan to be forgiven if the employer uses it to maintain employee salaries. More information about this provision is available at bswllc.com.
Help for Individuals
Many Americans have already received their tax rebate payments, being referred to colloquially as economic impact payments. These payments, equal to $1,200 per qualifying taxpayer, plus $500 for each child under 17, will be either direct-deposited into taxpayers’ accounts or mailed as a check. The income requirements for this phase of the CARES act stipulate that the payments taper down by a rate of $5 for every $100 of adjusted gross income over $75,000 for single filers, $112,500 for heads of household, and $150,000 for married couples filing jointly.
To get their tax rebate payments, taxpayers must have filed a 2018 or 2019 tax return and must qualify based on the income requirements. Those who have filed taxes by mail can visit the Get My Payment page on the IRS website for information about how to submit direct deposit information. The tax rebate payments work as advance credits against workers’ 2020 tax rebates.
Help for Healthcare Facilities and Workers
There are multiple provisions in the CARES act intended to provide support for healthcare workers and facilities like hospitals, diagnostic testing centers, and others. They include $100B in funds to pay for COVID-19 testing and treatment, rural healthcare outreach and small healthcare provider grants, prosecution protection for volunteer physicians, and more. The Act also authorizes the use of $10B in Economic Injury Disaster Loan (EIDL) funding to those healthcare entities with 500 employees or less, allowing eligible facilities to request advances on their loans.
As more doctors and patients have begun to embrace the growing Telehealth trend to avoid the need for face-to-face interactions, the CARES Act also provides a temporary waiver of face-to-face contact for physicians who provide dialysis services. The purpose of these provisions is to ensure that America’s healthcare workers are able to continue performing their essential work on the front lines of the country’s fight against the global pandemic.
The Bottom Line
In this time of crisis, the American government has taken bold steps to provide for the economic security of taxpayers, including workers, business owners, and healthcare personnel. Those who want to learn more should read through the information available on the IRS website. Business owners who are eligible for loans may also want to schedule an appointment with a tax consultant to get help applying for assistance through the CARES Act.
