What is CARES ACT?
The Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act was signed into law by President Trump on March 27, 2020. The CARES Act provides financial aid and relief to the economy as a result of COVID-19.
How? By providing $2.2 trillion economic relief package to individuals, businesses, hospitals and local governments.
Help For Individuals
Stimulus Payment | Extended Deadlines
- Direct payments, otherwise known as Stimulus/Economic Payments, to eligible taxpayers.
- Extending tax deadlines and waiving penalties for certain items.
- Expanding unemployment insurance
- Loans and grants, known as Payroll Protection Program (PPP) through the Small Business Administration (SBA)
Stimulus/Economic Payments to Individuals
Most Americans with Social Security Number (SSN) and who are not dependents can qualify for $1,200 as single or head of household; can qualify for $2,400 as married filing jointly; and can receive $500 for each child under the age 17.
CARES Act Rebate Calculator
The amount of payment is reduced for taxpayers with income over $75,000 ($150,000 for couples). The stimulus payment amount is based on 2018 or 2019 adjusted gross income (AGI).
During the tax return filing for 2020, taxpayers will receive adjustments in credits if it is in their favor. Taxpayers won’t have to pay any stimulus back if their AGI for 2020 increases above the threshold. The stimulus payment will not be included in taxpayers’ gross income for 2020 tax returns.
How to Claim It
Follow the steps below or review this infographic.
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- If you filed 2018 or 2019 tax return :
- and had a refund —> no action is needed. You will receive a payment to the direct deposit account from your tax return. If your account has changed, you will receive a check.
- and had an amount due —> IRS can send you a check or a debit card to your address or you can update your direct deposit information on the IRS website by selecting “GET MY PAYMENT” button.
- If you didn’t file 2018 or 2019 tax return but receive SSI income or other federal benefits, you will receive a deposit to your bank account where you receive SSI income.
- If you didn’t need to and didn’t file 2018 or 2019 tax return and don’t receive SSI you have to notify IRS were to send your payment by using the Non-Filers: Enter Payment Info
It is important not to use the tool if you need to file 2018 or 2019 tax return. The tool should only be used if you didn’t need to file tax returns in the past two years.
- If you didn’t file 2018 or 2019 tax return but should have, then you have to file these tax returns in order to receive your stimulus payment.
- If your situation changed since 2018/2019, for example, you had a baby in 2020 or 2019 and don’t need to file. While filing your 2020 tax return, you will receive a $500 credit for each dependent that you didn’t receive the stimulus check for.
Check the status of your payment by going to the IRS website and clicking the button
Extended Deadlines & Waived Penalties
- Tax Returns for 2019 were due July 15, 2020.
- To claim a refund, tax returns for 2016, has been extended to July 15, 2020.
- IRA contributions for 2019 could be made until July 15, 2020.
- Taxpayers who owe taxes to the IRS also had until July 15 to make their payments without interest or penalties.
- Retirement plan “coronavirus-related distribution” up to $100,000, early withdrawal penalty of 10% will be waived.
- Student loans interest rate is set to 0% and payments are suspended for student loans owned by the federal government from March 13 until September 30, 2020.
- Taxpayers with installment agreements were relieved of their payment obligations between April 1 and July 15, 2020.
Mortgage relief options exist for federally backed mortgages that have to be approved by banks. If approved, the borrower won’t have to pay the mortgage for 180 days without penalties.
However, until now after 180 days the borrower will have to pay all the payment at once. Congress is trying to modify these terms.
Help with your utility bills exist in Chicago, Cook Country, IL
Most states have extended their filing deadlines to July 15, 2020, and others have not. TurboTax has a very comprehensive list of deadline information on each state, which is continuously updated.
IL: Illinois income tax returns for the tax year 2019 have been extended to July 15, 2020.
Few states in particular DIDN’T extend the deadlines: Mississippi, New Jersey, Virginia, Washington
Expanded Unemployment Insurance
The current Covid-19 crisis has resulted in the highest unemployment claims in US history. The CARES Act had three different unemployment parts.
Congress is currently working on extending the benefits. Check the status at USA.gov/unemployment.
- Under the Pandemic Unemployment Compensation (PUC) assistance, there was an additional $600 a week for four months of unemployment insurance on top for the regular benefits received, which officially ended July 31, 2020.
- Additionally, the Pandemic Emergency Unemployment Compensation (PEUC) provides an additional 13 weeks of state unemployment benefits after taxpayers exhaust all their regular benefits.
- Finally, the Pandemic Unemployment Assistance (PUA) provides help to workers that are typically left-out of regular state unemployment pay.
Each state administers a separate unemployment insurance program, but all states follow the same federal guidelines.
Where to file for Unemployment Insurance Benefits
Apply for Unemployment payments in Illinois
Internal Revenue Service (IRS): Filing & Payment Deadlines Q&A
Forbes: All you Wanted to Know About Tax Stimulus Checks
Forbes: FAQ about Tax Stimulus Checks
The Balance: What is CARES Act?
IRS – Economic Impact Info
Consumer Financial Protection Bureau (CFPB) –Student loans and COVID-19
National Employment Law Project –Unemployment Insurance in the CARES Act