Public Notice: Congress CARES About You
The Coronavirus Aid, Relief, and Economic Security Act
I seldom do national news here, but since the entire rest of this issue is devoted to the local effects of and response to the COVID-19 shutdown – and because I've been steeping in this stuff for five days, trying to figure out the Chronicle's options and responsibilities – I figured I'd offer a little primer here to some of the resources Congress unleashed last Friday in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. It's a massive omnibus package – 880 pages of text and $2 trillion in federal spending – and while there's doubtless a lot of pork buried within, there are also a lot of really valuable benefits that seem to be solidly targeted at keeping workers employed and giving direct, immediate aid to those who need it. Direct payments to individuals, forgivable loans to businesses to cover payroll, unemployment insurance for freelancers – these are genuine innovations in sensibly expanding the government safety net and constitute surprisingly good, innovative, bipartisan work by Congress. (The kind of work, in fact, that a healthy socialist government does for its citizens year-round, not only in times of crisis; but I digress.)
Here are some highlights, with an emphasis on the provisions that promise immediate aid to those who've lost their jobs or income.
• Recovery Rebates – the one-time $1,200 direct payments to every taxpayer – are the most publicized element of the plan. And yes, you will be getting that check or direct deposit, and quite soon, if you make under $75,000 and if you filed a tax return in 2018 or 2019. Those who didn't file – perhaps because they made under the income threshold where they were required to do so – will not get this payment unless they go back and file a return retroactively, because technically, it's an income tax rebate. The IRS has set up an info page at www.irs.gov/coronavirus.
• Unemployment insurance is hugely enhanced, with benefits up to $600 a week for up to four months, on top of whatever state benefits may apply. Maybe even bigger: This is the first time that freelancers, independent contractors, and gig workers have been eligible on a large scale – though with new unemployment claims already at record levels, labor experts expect many states will have a hard time processing the overload. Claims are all administered through the individual states; here, that's the Texas Workforce Commission: www.twc.texas.gov.
• Expanded paid sick leave or family and medical leave for those affected by COVID-19 – whether they have it or are caring for someone who does, or various other conditions – are provided in the Families First Coronavirus Response Act, and employers are required to inform employees about the act. See the Dept. of Labor site, www.dol.gov, for info.
• Students: Most financial aid will be maintained despite closures and interruptions to studies. Existing federal student loan payments can be deferred for up to six months, and no interest is being charged until further notice. (Note that if you can continue making payments, all that money goes toward paying down the loan balance, and none toward interest, so that could be a better route in the long run.) See the Federal Student Aid site for details: www.studentaid.gov.
• Retirement accounts: Rules are eased on taking money out on both ends. You can dip into your 401K early with no penalty, or those over 72 can defer their required minimum distribution.
• The tax filing deadline has been moved back three months, to July 15. That's the tip of the tax law iceberg; there are many other tax breaks and incentives best left to the accountants.
• For small businesses there are two big loan programs, both running through the Small Business Administration working with local lenders (banks, credit unions, etc.). An expansion of the Economic Injury Disaster Loans (EIDL) loosens credit standards, eliminates fees, and fast-tracks the application process, promising a turnaround on a long-term, low-interest loan, possibly within a week. But the one a lot of small businesses (and their employees) are eyeing is the Paycheck Protection Program, which provides loans to cover up to 10 weeks of payroll and other fixed expenses, and that are mostly forgivable – i.e., don't have to be repaid – to the extent the business retains its employees, at full salaries. That could be huge for many of the very small businesses – restaurants, bars, small stores – that have been hit hardest by the current shutdown, but likely will require professional legal and/or accounting help. Talk to your bank or CU about applying, and see more info and the applications themselves at www.sba.gov.