What does the CARES Act mean for me?

What does the CARES Act mean for me?

April 16, 2020

Tagged As: Personal

What does the CARES Act mean for me?

The recently enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act includes a variety of measures to help American workers, families, and businesses get through the COVID-19 pandemic. Depending on your occupation and financial situation, you may be eligible for several of these relief efforts. Read on to learn how you can access these federal benefits (like those outlined in the CARES Act) and those from the state of Iowa.

Will I be getting a check?

The CARES Act includes a provision to deliver an emergency “economic impact payment” of $1,200 to nearly every adult American who makes under $75,000 a year. Those making between $75,000 and $100,000 annually will receive a prorated check, with the payment amount decreasing by $5 for every $100 in income above $75,000 (with one exception: individuals filing as a “head of household” can make up to $136,500 annually and still receive the full $1,200 payment).

Here’s an example of how that math works out for individuals’ salaries:

  • $75,000/year: $1,200 payment
  • $80,000/year: $950 payment
  • $90,000/year: $450 payment
  • $95,000/year: $200 payment

Married couples can receive $2,400, as long as their adjusted gross income is less than $150,000. The prorated cut-off for married couples is $198,000. Those with children under the age of 17 will also earn an additional $500 per child, whether or not they are married or filing as a single head of household.

How and when will the government get money to me?

The fastest way to receive your payment is through direct deposit. Most eligible U.S. taxpayers will automatically receive their Economic Impact Payments including:

  • Individuals who filed a federal income tax for 2018 or 2019
  • Individuals who receive Social Security retirement, disability (SSDI), or survivor benefits
  • Individuals who receive Railroad Retirement benefits

Those who may not automatically receive their payment include eligible U.S. citizens or permanent residents who:

  • Had gross income that did not exceed $12,200 ($24,400 for married couples) for 2019
  • Were not otherwise required to file a federal income tax return for 2019, and didn't plan to

You can provide the necessary information to the IRS easily and quickly for no fee through the IRS website. The IRS will use this information to determine your eligibility and payment amount and send you an economic impact payment. After providing this information you won’t need to take any additional action.

The U.S. government plans to make most direct deposit payments to Americans by April 17. It may already be in your account!

To use your Hills Bank account information for direct deposit:

  • Routing Number: 073913755
  • Account Number: At the bottom of a paper check (the middle number) or:
    • Log into Hills Bank Online
    • Open the "Services" tab on the left-hand navigation bar
    • Click on "Paperless" to see a list of your monthly electronic statements

If you need help finding your account number, feel free to get in touch with a banker through the HERE by Hills Bank app.

If you’d rather receive a check in the mail, you may have to wait a bit longer for the money to get to you.

Another important thing to note: you won’t need to pay back the economic impact payment you receive.

Unemployment insurance benefits

The CARES Act greatly increases the availability of unemployment insurance benefits for those who are self-employed, contract workers, ineligible for state unemployment benefits, or have already exhausted their state benefits. This includes gig workers like rideshare and meal-delivery drivers. If you have lost your job or have otherwise had your income impacted by the coronavirus (such as if you are required to self-quarantine and not able to work), you may be eligible to receive payments. You can apply for unemployment benefits through the Iowa Workforce Development website.

Student loans

If you’ve taken out student loans through the federal government, you likely won’t have to make payments until Sept. 30, 2020 – and interest will not accrue in the meantime. Those who use auto-pay for their loans won’t even have to pause their payments manually, according to the Department of Education: loan servicers have been instructed to suspend automated payments. However, it’s best to check for yourself to ensure you aren’t still paying when you don’t need to.

If you have private student loans, there may still be options available to you. Many loan servicers now offer options to pause your payments without late penalties, though that doesn’t necessarily mean that interest-accrual will pause as well.

Additionally, now could be a good time to refinance your student loans. Interest rates are at historical lows, which means you can end up paying much less on the balance of your loan over the long run by securing new loan terms.

Learn more about how the CARES Act impacts student loan borrowers.

Individual Retirement Accounts (IRAs)

The CARES Act also includes provisions affecting retirement plans – specifically IRA accounts. It waives required minimum distributions (RMDs) for 2020. Any individual who was otherwise required to take an RMD in 2020 is no longer required to do so for this year. An IRA owner may still elect to take some or all of their RMD if desired. IRA owners who have attained age 70½ can continue to make qualified charitable distributions (QCDs) from their IRAs.

Charitable Giving

Nonprofits are facing significant hardship from the fallout of COVID-19, and if you can manage it, now is a great time to give to your favorite charitable organization. For 2020, the CARES Act allows taxpayers to take a charitable deduction of up to $300 – even if the taxpayer does not itemize. For those who do itemize, the CARES Act lifts the cap on cash donations from 60% of adjusted gross income (AGI) to 100% of AGI, thus allowing donors to deduct more of their charitable cash contributions this year.

Small business owners

Small businesses are eligible for several relief options under the CARES Act. We’ve compiled a list of resources that can help.

Assistance from Hills Bank

We’re here for our customers in these trying times. If you are facing financial difficulties due to the COVID-19 pandemic, please get in touch with us to see how we can help.