On March 27, 2020 the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) was passed into federal law. The Act contains many important provisions that directly impact members of the Kroc School community. The Kroc School encourages everyone to familiarize themselves with the Act and the benefits they may be able to access. This post briefly highlights some portions of the Act that may be particularly relevant, and draws on analysis from the Washington Post, Vox, and the New York Times. Links are at the bottom.
This post is intended to share important information only, not to offer advice. It is incumbent upon you to study the text of the CARES Act and stay up-to-date on how it is being implemented at the federal and state levels.
Unemployment Insurance
- The Act establishes a $600-per-week across-the-board increase in unemployment benefits for all workers claiming them through July 31, 2020.
- The Act creates a new program, Pandemic Unemployment Assistance, for self-employed, contract workers, and nonprofit and government employees who are not typically eligible for unemployment insurance.
Stimulus Payments
- The Act includes a one-time maximum $1200 for adults, and for qualifying children 16 years or younger, an additional payment of $500. Single adults with Social Security numbers with adjusted gross income of $75,000 or less will receive the full $1200. Married couples with no children earning $150,000 or less will receive a total of $2400. Taxpayers filing as head of household will get the full $1200 if they earned $112,500 or less.
- For individuals earning above these income figures, payments will decrease until it reaches $0 for single people earning $99,000 (the payment amount falls by $5 for every $100 in income above $75,000) or married people with no children who earn $198,000. A family with two children will not be eligible for payments if income surpasses $218,000.
- Use this handy calculator to help calculate how much you could receive.
- The payments are not taxable.
- If anyone claims you as a dependent, you cannot get a payment.
- Everyone must have a valid Social Security number in order to be eligible. There is an exception for members of the military.
- Students are not eligible for the payment if anyone claims them as a dependent on a tax return. Usually, students under the age of 24 are dependents in the eyes of the taxing authorities if a parent pays for at least half of their expenses.
- The Adjusted Gross Income is based off of 2019 tax returns. If you have not yet filed your 2019 taxes, you should do so as soon as you can.
- You do not need to do anything to access the payment. The Internal Revenue Service already has your bank account information, it will transfer the money to you via direct deposit based on the recent income-tax figures it already has. The payment is expected to be processed within 3 weeks.
Student Loans
- There are automatic payment suspensions until September 30th for any student loan held by the federal government.
- Interest will not accrue on federal student loans during this suspension period.
- For members of the Kroc School community who are participating in the Public Service Loan Forgiveness program, note that the CARES Act states that the suspended payments will count by one payment each month during the six-month suspension, even though you will not actually be making payments. This is true for all forgiveness or loan-rehabilitation programs.
Retirement Accounts
- For the 2020 calendar year, no one will have to take a required minimum distribution from an individual retirement account or workplace retirement savings plan.
- If you have taken money out of your I.R.A. or workplace retirement plan early, you can withdraw up to $100,000 without the usual 10% penalty, as long as the withdrawal is because of COVID-19.
This post briefly highlights some portions of the Act that may be particularly relevant to the Kroc School community. Please see links below for more comprehensive information.
Sources relied upon for this post: