March 19, 2020 6:47pm
U.S. Senate unveils Coronavirus stimulus package
The United States Senate unveiled a $1 trillion stimulus package in response to the COVID-19 pandemic. The bill, titled the Coronavirus Aid, Relief, and Economic Security Act (or CARES ACT), seeks to ward off a recession and address some of the economic damage already caused by the crisis by directly injecting cash into the economy and supporting other relief efforts.
Majority Leader Mitch McConnell is the lead sponsor of the bill. “[W]e need to help protect American workers, families, and small businesses from this unique economic crisis that threatens to worsen with every day. We need to have the American people’s backs. This legislation is a significant next step. And the Senate is not going anywhere until we take action,” said Leader McConnell in a statement about the CARES Act.
The White House announced a framework for its plan earlier this week.
What the CARES Act does
- Provides direct cash payments of $1,200 to Americans making less than $75,000 annually (based on 2018 tax filings). For joint filers, the payment would be $2,400 with a limit on annual income of $150,000. In addition, the bill would provide parents with another $500 per child. For every $100 an individual makes above $75,000, their direct payment would be reduced by $5. Individuals making $99,000 or more would be ineligible.
- Provides loans for small businesses and specific impacted industries, such as the airline industry and cargo carriers.
- Delays business estimated tax payments and employer payroll tax deposits.
- Waives early withdraw penalties from retirement accounts (up to $100,000) if the withdraw is related to the COVID-19 pandemic.
- Makes changes to net operating loss carryback provisions.
- Incentivizes charitable giving by allowing for a $300 deduction for charitable giving regardless if one itemizes their taxes. For those who do itemize, the bill increases limits.
- Allow individuals with federal student loans to defer payments.
- Moves the tax filing deadline from April 15 to July 15.
The full bill is available here.