What is the CARES Act?
The Coronavirus Aid, Relief, and Economic Security Act is a $2 trillion economic stimulus package, passed by the US Congress on March 27, 2020 to provide liquidity for the American people and economy during the current pandemic.
The Act includes provisions for benefits, loans, grants, deferred payments and other measures to help the entire US economy, including—for the first time—independents. We’ll show you how.
VIDEO: How the CARES Act Benefits Independent Workers
Gene Zaino, MBO’s Founder and Executive Chairman, introduces the CARES Act and outlines key passages that benefit independents.
Stimulus Across the Economy
The CARES Act contains provisions that provide benefits across all areas of the economy, including large and small businesses, individuals, state and local government, and our public systems, including healthcare and education. The $2 trillion bill is allocated to keep Americans on their feet and provide much-needed “liquidity,” or ready cash spend, in the near term.
Treasury Secretary Steve Mnuchin said the CARES Act would facilitate up to $4 trillion in financing for U.S. business by leveraged lending from the Federal Reserve, backstopped by Treasury funding, as well as by Treasury loans and loan guarantees. The CARES Act is a big part of the Treasury story, but the CARES Act on its own provides impressive further liquidity from a combination of spending, tax deferral, tax relief, and small business lending.
CARES Act Benefits At-a-Glance for Independent Workers
These key provisions of the CARES Act show exactly where independents can take advantage of the new benefits to maximize relief.
Direct Payroll Relief
Americans – both self-employed and not – enjoy direct aid in the form of stimulus checks.
Retirement Account Access
All workers can withdraw from existing retirement vehicles such as 401(k) funds at increased limits of up to $100,000, with waived penalties and increased payback windows.
Individual income tax deadlines have been pushed back to July 15. Certain entities are eligible for additional tax deferral options on payroll taxes, and an increased window to “carry back” a loss.
CARES for the first time ever expands unemployment benefits to independent workers, extending the coverage period by 13 weeks and adding in an additional $600 per week of “Pandemic Unemployment Assistance” for up to three months. It also eliminates the waiting period and job search requirements.
Loans and Grants
The Small Business Administration (SBA) has more than $350 billion in discretionary funds, distributed via loans and grants, to let small businesses, including independent contractors, pay rent, keep workers on staff, offer paid sick leave and more.
Want to See More?
View key passages from the CARES Act, with MBO’s expert commentary on how they work and what they accomplish.
Put the CARES Act to Work for You
Ready to take advantage of the economic stimulus? Read MBO’s guide to benefits for independents and how to qualify.
Programs and benefits are evolving rapidly. States’ responses continue to unfold, in parallel with the federal response. Sign up for MBO’s Newsletter, and we’ll send you updates when new benefits emerge for independents.
The information provided here does not constitute legal, tax or financial advice. It does not take into account your particular circumstances, objectives, legal and financial situation or needs. Before acting on any information, you should consider the appropriateness of the information for your situation in consultation with a professional advisor of your choosing. This is a rapidly changing area of the law and will be subject to change and interpretation.