Disclaimer: For Broker/Producer Training Use Only - Not for use with the General Public, You should not rely on this information to make any financial decisions or to enter any financial agreements. Please consult your financial/tax advisor before implementing any financial planning using the information provided.
Ben London CLU, ChFC, AEP©, Certified Financial Planner®, Director of Private Wealth Planning and Greg Dombrosky a Wealth Planning Consultant of The London Team, thank you!
The CARE Act benefits Individual tax payers!
Who qualifies to receive a check and how much will an individual receive?
Anyone who filed a tax return this year or last year. Individuals receive $1,200, married couples receive $2,400, and child dependents (under 17) receive $500. Recipients must have a Social Security Number except for spouses of members of the Armed Forces or in the case of an adopted child the adoption taxpayer identification number for the adopted child.
What are qualified income levels based off of?
There is no qualified income threshold or requirement to receive the rebate. However, the rebate phases out at a 5 percent rate above adjusted gross incomes of $75,000 for single filers, $112,500 for heads of household, and $150,000 for joint filers.
Popular questions:
- Can those collecting Social Security or disability receive a check?
- Will SSA administer the funds to my EBT/Debit card that I receive my SSA benefits through?
- How does an individual claim their check?
- How long will it take for this check to be delivered?
- Will I be taxed on this check?
- Will I be eligible if I haven’t finished filing my 2018 taxes?
- Will I be eligible if I have a lien against me, but I am in non-collect status?
- I withdrew my retirement in 2018, so my income that year was inflated. Is there any waiver for one time sources of income?
- What has changed for income tax filing this year?
- Are there any changes to tax filing for businesses?
The CARE Act benefits small businesses!
Boosts for Businesses
American small businesses are facing an unprecedented economic disruption due to the novel coronavirus (COVID-19) outbreak. Cities and states have implemented mandatory closures of public spaces to ensure social distancing to prevent the spread of the virus, so those difficulties have only increased.
Congress has reached a bipartisan compromise on a $2 trillion economic stimulus package to address the economic impact caused by the COVID-19 outbreak titled the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Division A of the bill, which provides more than $377 billion in support to small businesses, includes prominent measures from the Keeping American Workers Employed and Paid Act sponsored by Republican Senators Marco Rubio (Fla.), Susan Collins (Maine), and Lamar Alexander (Tenn.), as well as the COVID-19 RELIEF for Small Businesses Act of 2020 sponsored by Ranking Member Ben Cardin (MD.) and all Democrats on the Senate Small Business Committee.
Paycheck Protection Program
The stimulus includes nearly $350 billion in funding for a provision to create a Paycheck Protection Program (PPP) that will provide small businesses and other entities with zero-fee loans of up to $10 million. Up to 8 weeks of average payroll and other costs will be forgiven if the business retains its employees and their salary levels. Principal and interest is deferred for up to a year and all borrower fees are waived. This temporary emergency assistance through the U.S. Small Business Administration (SBA) and the Department of Treasury can be used in coordination with other COVID-financing assistance established in the bill or any other existing SBA loan program.
The bill requires the SBA Administrator to set a cap on how much a bank can earn to process loan applications and prioritize undeserved borrowers, including those in rural communities, minorities, women and veterans.
Continuing reading for:
- Emergency Economic Injury Grants
- Debt Relief for Existing and New SBA Borrowers
- Paid Leave for Government Contractors
- Resources for Business Counseling Services
The CARE Act benefits Students
What relief is provided to federal student loan borrowers?
Borrowers do not need to make payments on student loans held by the federal government (Direct Loans and FFEL Loans held by the U.S. Department of Education) through September 30, 2020. Borrowers with commercially-held FFEL loans and Perkins Loans are not eligible, and private student loan borrowers are also not eligible. No interest will accrue on such loans for the same time period. This provides more than 37 million borrowers with relief from the financial pressure of making monthly payments for approximately six months.
During this period, borrowers will not be subject to involuntary collections (garnishment of wages, tax refunds, and Social Security benefits) and will not have any negative credit reporting for late payments during this time period. Student borrowers will continue to receive credit toward Public Service Loan Forgiveness, Income-Driven Repayment forgiveness, and loan rehabilitation even though they will not be making payments. If borrowers want to continue making payments during this time to pay down principal and previously accrued interest (since no interest is accruing as of March 13) they are free to do so.
When will payments resume for federal student loan borrowers?
Starting August, student loan borrowers will receive notices to help inform them that their regular loan payments and interest accrual will resume after September 30, 2020. These notices will help protect borrowers by providing them with a transition period to stay on track as regular loan payments resume and to offer them the option to enroll in other relief options (such as income-driven repayment, which can lower a borrower’s monthly payment).
Popular questions:
- Does the six-month suspension of payments and waiver of interest apply to borrowers who have federally-guaranteed but commercially-held loans through the FFEL and Perkins Loan Programs?
- Does the sixty-day protection from involuntary collections apply to these FFEL and Perkins borrowers?
- Will outstanding interest on student loans capitalize during the six-month suspension of payments and waiver of interest?
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