U.S. President Donald Trump on Friday signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law, calling it “the single biggest economic relief package in American History – twice as large as any relief bill ever enacted.” The $2.2 trillion package aims to deliver urgently-needed relief for families, workers, and businesses hit by the COVID-19 pandemic. Trump tweeted that the bill will provide direct payments, help small businesses stay open, keep workers employed, and support health care providers.
Details of the Largest Relief Bill in History
The CARES Act provides $300 billion in direct cash payments to American citizens earning less than $99,000 per year. The White House explained that the payments are treated as a refundable tax credit and are based on adjusted gross income (AGI) from 2019 federal tax returns (or 2018 if 2019 has not been filed). For single filers with a Social Security number and AGI under $75,000, the full amount is $1,200. The payment decreases for incomes above $75,000 and phases out completely at $99,000. Heads of household with AGI under $112,500 also receive $1,200, phasing out at $146,500. Married couples filing jointly with AGI below $150,000 receive $2,400, phasing out at $198,000. Families with children aged 16 or younger receive an additional $500 per child. For instance, a family of four could receive up to $3,400.
Expanded Unemployment and Business Relief
The law extends jobless benefits to freelancers, gig workers, and others not typically covered. It also provides loans and tax breaks to companies impacted by COVID-19. However, some critics on social media questioned whether the package is sufficient given the unprecedented economic disruption — last week unemployment claims surged to a record 3.3 million. Others blamed Trump for initially downplaying the crisis and overpromising a cure.
Timing: When Will Stimulus Checks Arrive?
Treasury Secretary Steven Mnuchin stated that Americans who have direct deposit set up with the IRS can expect payments within three weeks. Those without direct deposit will receive paper checks by mail. The IRS will automatically send money to qualifying tax filers without any application required. To facilitate this, the IRS extended the tax filing deadline from April 15 to July 15, 2020.
The CARES Act represents an unprecedented federal intervention into the economy, but its long-term impact on recovery and public health remains to be seen.