The Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, was signed by President Donald Trump on March 27.
The $2 trillion U.S. emergency relief package is the largest in American history. The bill aims to help individuals, families, businesses, and the economy deal with the devastating effects caused by the COVID-19 Pandemic.
This U.S. stimulus program includes a one-time cash payment of up to 1,200 dollars to eligible Americans.
This article will help you understand the U.S. 2020 stimulus package, including what it is, what recipients get, how much money they receive, and how to apply for it. Also, we’ll discuss how small businesses can receive money.
What is the stimulus package?
The CARES Act was designed as a stimulus package to assist Americans affected by COVID-19. The CARES Act is over 800 pages long and explains how to stimulate the American economy while helping it cope with the changes ravaging this country.
They are included in the U.S. stimulus plan, which allocates over 2 trillion dollars to different groups of society.
Individuals to receive $560 billion.
Large corporations to receive $500 billion.
Small businesses to receive $377 billion.
State and local governments to receive $340 billion.
Public health: $154 billion.
Education and other causes: $44 billion.
NPR has created a handy infographic that illustrates the distribution of money.
At the end of this article, we’ll discuss how small businesses and independent contractors can get some of this money. The CARES Act’s one-time cash payments made to families and individuals are the part of the CARES Act that is most discussed.
This bill provides additional unemployment benefits of $600 per week on top of what they already receive.
Extending unemployment benefits to 39 weeks is essential for those who receive them. This means a 13-week extension for most.
What is the U.S. stimulus plan?
The CARES Act was designed to assist in two main ways.
These stimulus checks will provide much-needed financial assistance to those with lower incomes. The money will help families and individuals pay their bills and provide food for the family.
Second, giving money to people who will spend it immediately is the best way to keep an economy afloat during stagnation.
This bill also relieves students of the burden. The bill will also delay all payments for federal student loan holders until September 30, 2020. In addition, no interest will accrue during the period.
The bill creates a safety net for healthcare and requires that all private health insurance plans cover COVID-19 tests, treatments, and even preventative measures.
Also, there are loans to help small businesses, corporations, and self-employed people survive. These loans allow companies to pay their bills and pay employees’ salaries. They are designed to avoid business closures or layoffs. We’ll discuss these in more detail at the end.
U.S. stimulus package requirements: Who receives a check?
You can get a stimulus payment if:
You’ve been receiving Social Security benefits because you haven’t earned enough to pay taxes.
No one else has claimed you as a dependent.
It is important to note that adult dependents and nonresident aliens do not qualify for a stimulus payment.
To be eligible for this stimulus package, you must earn less than.
You can claim up to $99,000 as an individual taxpayer.
If you are the Head of the household, you can claim $136.500.
$198,000 for married couples filing jointly.
What will I receive?
If you qualify for an economic stimulus package, you will receive a cash payment based on the adjusted gross income you reported in 2018 or 2019.
This is a breakdown of how much you will receive:
$1,200 will be given to individuals earning less than $75,000.
Couples who earn less than $150,000 per annum will receive $2,400
The Head of a household who earns less than $112,500 will receive $1200
Families can receive up to $500 per dependent child below the age of 17.
The payment is reduced by $5 per $100 above these limits until the maximums are reached.
Use this online calculator to calculate how much you are entitled to.
Will receiving a stimulus payment affect my refund?
The IRS distributes the stimulus check via the tax system. However, this is not a refund. You will still get your full refund every year.
The stimulus checks are a new kind of refundable credit. These payments are a form of advance payment for the new tax credit, which will be included on your 2020 tax return.
The IRS does not give you an advance for your expected tax refund. The IRS gives you a special credit, not your standard tax refund.
You can still receive a stimulus payment even if you are currently in debt.
What is a small business loan?
There are several options for small business owners.
Initially, $377 billion was set aside in the CARES Act for small business loans. This money was spent within two weeks.
Public companies secured millions of forgivable loans at the expense of small businesses. These included well-known restaurant chains such as Ruth’s Chris and Fiesta Restaurant, which received millions in forgivable loans.
Congress has approved an additional $370 billion to help small businesses. The money is divided into two programs:
First, there is the Paycheck Protection Program.
This loan provides up to $10,000,000 to help pay employees’ salaries.
The money is forgiven in full if the organization does not lay off employees and spends at least 75 percent on payroll.
Second, the Economic Injury and Disaster Loan Program.
Businesses don’t have to repay a grant of up to $10,000. The remainder of the EIDL, up to $2,000,000, is not refunded but can be used to cover other business expenses.
Your business or nonprofit must have 500 employees or less to be eligible.
Restaurants, hotels, and other businesses classified as “Accommodation” or “Food Services” are also eligible for the loophole if they employ less than 500 people per location.