Navigating the CARES Act: FAQs for Small Businesses, Families, and Individuals

The CARES Act, or the Coronavirus Aid, Relief and Economic Security Act, is a $2 trillion economic stimulus package geared towards helping businesses, individual employees, and families through the initial shock of the financial impacts of the COVID-19 outbreak.

Sierra Business Council is committed to helping our region’s residents and small businesses navigate the resources made available in this federal package. Below you will find answers to the questions we’re hearing most.

Navigating the CARES Act: FAQs for Small Businesses, Families, and Individuals

 

Though the COVID-19 outbreak continues to evolve and the economic impacts continue to take form, we at SBC are encouraged by action in the form of an unprecedented stimulus package that will provide some form of relief to those hit hardest by the initial waves of this crisis. The CARES Act, or the Coronavirus Aid, Relief and Economic Security Act, is a $2 trillion economic stimulus package geared towards helping businesses, individual employees, and families through the initial shock of the financial impacts of the COVID-19 outbreak.

Sierra Business Council is committed to helping our region’s residents and small businesses navigate the resources made available in this federal package. Below you will find answers to the questions we’re hearing most.

To read the full text of the CARES Act, click here.

SBDC OpenSign 2017 10

How are unemployment benefits enhanced by the CARES Act?

Not intended to cover: People who quit their jobs due to concerns that continuing to work increases their risk of contracting the virus, workers who are able to work from home, those receiving paid family or sick leave, or new entrants to the workforce unable to find jobs. 

How long will payments last? These benefits cannot exceed 39 weeks. The extra $600 for each recipient of unemployment is intended to end July 31st.

Businesses

What small business loans are available under the CARES Act?
The CARES Act allocates $350 billion for a new Paycheck Protection Program to make loans to:

The fine print:

How will I apply for these funds?
Loans would be available immediately through more than 800 existing SBA-certified lenders, including banks, credit unions, and other financial institutions. The SBA would be required to streamline the process to bring additional lenders into the program, and the Treasury Secretary would be authorized to expedite the addition of new lenders.

Does my business qualify for the payroll tax credit?
Employers whose operations have been affected, fully or partially suspended due to a shut-down order, or whose gross receipts declined by 50% or more compared to the same quarter last year, are eligible for an employee retention credit that would be a refundable payroll tax credit for 50% of wages paid to employees by employers during the crisis:

The fine print:

What else should I know about the SBA program changes?

To encourage employers to rehire employees who have already been laid off due to the COVID-19 crisis, borrowers that re-hire workers previously laid off wouldn’t be penalized for having a reduced payroll at the beginning of the loan period.

Individuals & Families

Who qualifies for individual benefits through the CARES Act? What do these benefits entail?
Individuals with gross adjusted incomes of less than $75k will qualify for $1200 in financial assistance. Married couples with gross adjusted incomes of less than $150k will qualify for $2400 in financial assistance. (This is based on 2019 taxes if they’ve been filed, 2018 if they have not.) Eligible families would recieve an additional $500 per child.

The fine print:

How will I receive my individual benefits?
The IRS will deposit the amounts directly into bank accounts of individuals who have set up direct deposit with the IRS and mail checks to those who haven’t (no need to file for payments).

When will I receive my individual benefits?
Individuals can expect the payments between three weeks from now and May.

What if I want to withdraw from my retirement account?
The 10% early withdrawal penalty would be waived for distributions of up to $100k for eligible coronavirus-related purposes. 

Do I qualify for my withdrawal penalty to be waived?
Eligible withdrawals are limited to:

While this remains a time of change and uncertainty, SBC will continue to track emergency resources at the state and federal level, identify opportunities for the region’s families and businesses, advocate on behalf of the region’s needs, and keep our network informed. 

If you own a small business and are looking for additional information regarding the resources available to you at this time, please click here to visit our Sierra Small Business Development Center website.

You can also download the above FAQs as a PDF here. 

Leave a Reply

Your email address will not be published. Required fields are marked *