Last week, Congress passed a $2.2 trillion economic stimulus bill, which it is calling the CARES Act. Arguably the biggest news included in the act are one-time stimulus payments of up to $1,200 for individuals, and $2,400 for married couples based on their income level — plus $500 for each qualifying dependent under 17 years old.
It’s a needed boost, both for individuals and essentially for the economy that is being particularly hard hit by the coronavirus epidemic. But in reality, only about $300 billion of the bill is going to these cash payments.
So, where is the rest of it going? Let’s take a look:
Emergency Grants
About $10 billion will be allocated for emergency grants of up to $10,000 each. These are intended to go to small businesses to cover the immediate costs of doing business to ensure many are able to weather this pandemic storm.
Forgivable Loans
Some $350 billion is going to the Small Business Administration (SBA) for dispersion of up to $10 million per qualifying business. These loans are designed so that small businesses can continue to pay their employees, rent/mortgage and other necessities to keep the lights on and the doors, if applicable at the current state, open.
An additional $17 billion is also available for dispersion to small businesses. This money is intended to act as relief for existing SBA loans and designed to help businesses cover up to 6 months worth of said payments.
Refundable Tax Credit
With job losses increasing as the pandemic evolves, one of the things the bill hopes to do is encourage businesses to keep workers on payroll or, at worst, furlough workers so that they have jobs to return to when this crisis ends. The bill aims to incentivize this in the form of a tax credit, which will cover half of all payroll on the first $10,000 worth of compensation for each individual worker.
Student Loan Relief
Have or know someone that is still paying off student loans? They’re able to defer all student loan and interest payments through September 30 without penalty. Even if you’re able to continue to pay your student loans, you’ll still be helped be the deferred interest over this period. However, this benefit is only eligible to those with federally-held loans. Those with private loans would still have to abide by the regulations of their respective lender.
Enhanced Unemployment Benefits
Some $260 billion is going toward enhanced unemployment benefits, both in terms of who is eligible, and money and benefits received. Specifically, on top of whatever an out-of-work American is eligible from their respective state, the federal government will add $600 per week on top of it. This increase in compensation is good for up to 4 months. Also included is up to 13 weeks of unemployment health insurance benefits, plus the opportunity to see this timeline extended. These benefits are eligible for former full-time workers, as well as those who are self-employed, independent contractors, and gig workers.
