The Coronavirus Aid, Relief, and Economic Security Act or, CARES Act, was passed by Congress on March 27th, 2020. This bill provided $2.2 trillion in direct economic aid to Americans negatively impacted by the COVID-19 pandemic.
Maybe you took advantage of the CARES Act provisions, like the paycheck protection program to keep your business afloat and your employees onboard. Maybe you’ve used your stimulus money to help pay the bills.
Has your business utilized all the benefits of the CARES Act? Here are some lesser-known parts of the CARES Act you may not know about:
Individuals
The COVID pandemic has caused financial strain on individuals and families from lost jobs, reduced work hours, and businesses losing money. The CARES Act gives Americans more access to their retirement funds by allowing the withdraw of up to $100,000 from a 401(k), 403(b), or IRA without paying an early-withdraw penalty. The withdrawn funds can be used for the years 2020, 2021, and 2022.
The ability to take up to $100,000 of your retirement savings is normally not a good idea, but with the financial shortfall families have experienced with shutdowns, these funds can provide immediate relief.
Small Business
Small businesses have also struggled financially due to the ebb and flow of shutting down and re-opening over the course of the pandemic. Here are some of CARES Act provisions geared towards helping small businesses:
- Your business can defer paying its share of the federal Social Security tax through December 31, 2022.
- Your business can go back five years (granted your business had a surplus income) and carry-forward the losses of 2020 with past income taxes. Your business can use the losses this past year to offset your profitable past years for a quick, possibly substantial refund.
- Your business can utilize a refundable employee retention tax credit of up to $5,000 per employee.
- As an employer, you can contribute toward an employee’s student loan repayment tax-free through January 1, 2026.
In addition to the Paycheck Protection Program, the CARES Act gives your business tax credit for retaining employees, defer parts of your federal income tax, and help lessen the financial burden of your college student employees.
Students
It’s hard to lay employees off or reduce their work hours. Your college student employees are likely feeling the financial pinch. Even during the pandemic, college is expensive and your employees rely on work to pay their expenses. The CARES Act has provided provisions for students to take some of the financial burden. These include:
- Allowing college students to receive unemployment benefits, provided they can prove they had paid work last year.
- It gives $14 billion in emergency funding to higher education institutions to provide cash grants to students
- It offers more flexible repayment terms for federal student financial aid
Student-workers can get some extra financial assistance through more generous grants and loans with more lenient repayment schedules, the eligibility for unemployment, and the ability to get paid when they are unable to work.
Medical Care
As a small business owner, your health and the health of your employees are critical right now. Medical costs will already add to the financial strain your business is feeling. The CARES Act has some medical provisions that can help including:
- Requiring all health plans and health insurance carriers, to cover Coronavirus testing and vaccinations
- Allowing Americans to use their Health savings and flexible savings accounts as payment for over-the-counter medications and menstrual care products
- The Act expands Telehealth, investing $145 million over four years into the technology
Health is currently a vital topic. The CARES Act allows anyone with health insurance to be diagnosed and vaccinated for COVID free of charge. Additionally, virtual doctor office visits and quicker, safer, and cheaper ways to get prescriptions help you and your employees stay healthy and safe.
Holloway Benefit Concepts knows the difficulties businesses are experiencing due to COVID-19. We offer a variety of employee health benefit plans that fit your business’ needs and budget. Contact us today for peace of mind knowing your employees and customers are safe.
