When an enemy invades our country and essentially shuts down our free market and removes hard-working Americans ability to work, we have a responsibility to act. On Friday, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) into law. This bill is not perfect, as a portion of the funding is unnecessary. However, most of it provides critical resources for hard-working Americans, small businesses and those self-employed, and our healthcare providers and facilities as we battle this invisible enemy.
I have updated my Coronavirus webpage to provide information, FAQs and links to more details and application information.
The CARES act provides direct support for small businesses, independent contractors, the self-employed, and gig economy workers through the Small Business Association (SBA). The SBA received $349 billion in funds for the 7(a)-loan program. There are several loan options and businesses are not limited to just one, as long as the funds are being used for different, and eligible, purposes. A list of those options is available on my website at: bit.ly/HelpSBiz
For businesses that have temporarily closed as a result of COVID-19, the CARES Act creates an Employee Retention Credit, which is a refundable payroll tax credit equal to 50 percent of up to $10,000 in wages per employee (including health benefits) paid by certain employers during the coronavirus crisis.
The credit is available to employers:
- Whose operations were fully or partially shut down by government order limiting commerce, travel, or group meetings due to coronavirus; or
- Whose quarterly receipts are less than 50 percent for the same quarter in the prior year.
Wages paid to employees during the period which they are furloughed or otherwise not working (due to reduced hours) as a result of their employer’s closure or economic hardship are eligible for the credit. However, for employers with 100 or fewer employees, all employee wages qualify for the credit, regardless of whether they are furloughed or face reduced hours.
The credit is for wages paid by eligible employers from March 13, 2020 through December 31, 2020.
Affected businesses are encouraged to apply online for SBA disaster loans or by contacting their local lender directly for payroll loans.
The CARES Act also provides a tax rebate for many Americans. This includes workers, individuals receiving welfare benefits, and seniors – including those receiving Social Security benefits.
No tax liability or earned income is required to be eligible for this rebate. It will be sent to those with incomes at or below $75,000 for individuals, $112,500 for head of household, and $150,000 for married couples. It will amount to:
- • $1,200 per individual
- • $2,400 per couple, and
- • $500 per child (with a valid SSN).
For taxpayers with adjusted gross income over $75,000 ($112,500 for head of household and $150,000 married, the rebate amount is reduced by $5 for each $100 that a taxpayer’s income exceeds the phase-out threshold. The amount is completely phased-out for single filers with incomes exceeding $99,000, $146,500 for head of household filers with one child, and $198,000 for joint filers with no children. For a typical family of four, the amount is completely phased out for those with adjusted gross incomes exceeding $218,000.
Many will receive this credit in the form of a check, direct deposit or debit card. U.S. Treasury Secretary Mnuchin has stated the department will be working to have these rebates to Americans in three weeks. The rebates are not taxable income. If you have filed your 2019 taxes, Treasury will use that to determine income levels. Otherwise, 2018 tax filings will be used. Click here for more information.
Congressman Daniel Webster represents The Villages in the U.S. House of Representatives.