On March 27th, President Trump signed the CARES Act, legislation that will provide the emergency funds necessary to steer our economy through the outbreak of the China Virus and help Americans meet their financial needs. Part of that legislation provides a check in the form of a tax rebate to the vast majority of Americans. Information about those tax rebates is outlined below and can be found by clicking here. That legislation also provides loans to struggling businesses, non-profits, and other entities through the Small Business Administration. Those loans are also eligible for forgiveness when used for the certain purposes, including payroll, rent, mortgage interest, and utilities. Information about those loans is also outlined below and can be found by clicking here.
Senator Cotton encourages all Arkansans with questions about how the CARES act can benefit them to contact his office at (202) 224-2353 or (501) 223-9081.
Recovery Checks for Americans
Background: On March 27th, President Trump signed the CARES Act, legislation that will provide the emergency funds necessary to steer our economy through the outbreak of the China Virus and help Americans meet their financial needs. Part of that legislation provides a check in the form of a tax rebate to the vast majority of Americans. Information about those tax rebates is outlined in this document.
Eligibility: All U.S. residents are eligible as long as they have a work-eligible Social Security number and meet the income requirements. People whose income is entirely from nontaxable, means-tested programs - such as Supplemental Security Income benefits - are eligible too. If a person is a dependent on someone else's tax return - such as a young adult - they are not eligible for payments.
Click here to calculate how much assistance you will receive
For Individual Filers: Americans who file their taxes as individuals will receive up to $1,200 in assistance. If your income was less than $75,000 in 2019, you will receive the full amount of $1,200. For those making above $75,000, reduced checks on a sliding scale will be paid. For every $100 you make over $75,000, your assistance will be reduced by $5.
For Married Couples Filing Jointly: Americans who file taxes jointly will receive up to $2,400 plus $500 for every dependent under the age of 17. If your joint income was less than $150,000 in 2019, you will receive the full amount of $2,400 plus $500 for every dependent under 17. For couples making above $150,000, reduced checks on a sliding scale will be paid. For every $100 you make over $150,000, your assistance will be reduced by $5.
For Heads of Household: Americans who file taxes as heads of household will receive up to $1,200 plus $500 for every dependent under the age of 17. If your income was less than $112,500 in 2019, you will receive the full amount of $1,200 plus $500 for every dependent under 17. For those making above $112,500, Reduced checks on a sliding scale will be paid. For every $100 you make over $112,500, your assistance will be reduced by $5.
For Those on Social Security, Social Security Disability Insurance, Supplemental Security Income (SSI), or Railroad Retirement Benefits: If an individual has not filed a tax return in 2018 or 2019, the government will use an individual's 2019 SSA-1099 Social Security Benefit Statement or 2019 RRB-1099 Railroad Retirement Benefit Statement to advance payments to individuals who receive Social Security or Railroad Retirement Benefits. All Social Security beneficiaries-retired workers, disabled workers, eligible family members, and survivors-receive a Form SSA-1099. However, SSI recipients are not provided a Form SSA-1099. SSI recipients who also receive Social Security benefits will be automatically forwarded a payment. SSI recipients who do not receive Social Security benefits will need to file a 2019 tax return to receive a payment if they are otherwise eligible. If an individual started receiving Social Security payments in 2020, they will need to file a 2019 tax return to be eligible. Adults who are claimed as a dependent on another taxpayer's return are not eligible for a payment.
Past-Due Debts: The payment cannot be reduced for certain unpaid debts, including debts owed to a federal agency (but excluding child support), past-due state income taxes, federal taxes, or unemployment compensation debts. As for student loans, Direct Loan borrowers and Federal Family Education Loan (FFEL) borrowers with loans that are still owned by the Department of Education will have their payments suspended through September 30, 2020. Federal student loan borrowers do not need to take any action to suspend payments. Your federal student loan servicer will suspend all payments without any action from you. You do not need to contact your student loan servicer. While federal student loan payments are suspended, the loans shall not accrue any interest and the month of a suspended loan payment will be treated as if a loan had been made for purposes of loan forgiveness and loan rehabilitation. The suspension period will result in no negative credit reporting and also involuntary collection of the loan will be suspended-no wage garnishments, tax intercepts, offset of federal benefits, or any other collection activity. These protections do not apply to borrowers with Perkins Loans and borrowers whose FFEL loans are held by banks or guaranty agencies. If you have a Perkins Loan or an FFEL loan that is privately owned, you should contact your loan servicer to explore options they may be offering.
Common Questions and Answers
Q: How will I receive the assistance?
A: For the vast majority of Americans, no action on their part will be required in order to receive a rebate check. The IRS will use a taxpayer's 2019 tax return if filed, or in the alternative their 2018 return. This includes many low-income individuals who file a tax return in order to take advantage of the refundable Earned Income Tax Credit and Child Tax Credit. If you gave your bank account information to the IRS when filing your taxes, you will likely receive a direct deposit from the government. If you did not, you will likely receive a check in the mail. No later than 15 days after the date on which Treasury makes a payment to an eligible taxpayer, a notice will be sent by mail to that taxpayer's last known address. That notice will indicate the method of payment and the amount of payment.
Q: When will my payment arrive?
A: Treasury Secretary Steven Mnuchin has said he expects most people to get their payments within three weeks.
Q: Will I have to pay taxes on these payments?
Q: Do I need to have income to qualify?
Q: What tax year will be used to determine my income?
A: If you have already filed your taxes for 2019, your income for that year will be used to determine your assistance. If you have not filed your taxes for 2019, the IRS will use your 2018 tax filing to determine your assistance.
Q: What If I haven't filed a tax return for 2018 or 2019?
A: If you meet the eligibility requirements for a payment but have not filed a tax return in the last two years, you must file a tax return to receive a payment. If you make less than $69,000 a year, you can find free tax filing options at the IRS Free File webpage. If you make more than $69,000 a year, there may be free options available to you offered by several commercial tax prep companies, like Intuit (TurboTax), H&R Block or TaxAct. If you want in-person tax help for free, You may qualify for the IRS' Volunteer Income Tax Assistance (VITA) program. To qualify, you must
The program matches you with IRS-certified volunteers across the country who can help with free basic income tax preparation and electronic filing. You can use the Volunteer Income Tax Assistance locator tool or call 800-906-9887 to find someone to help you. Keep in mind that some locations may require an appointment.
Q: Would most people who are receiving Social Security retirement and disability payments each month also get a stimulus payment?
Q: Will eligible unemployed people get these stimulus payments? Veterans?
A: Yes, to both
Q: If my income tax refunds are currently being garnished because of a student loan default, would this payment be garnished as well?
SBA Paycheck Protection Loan Program Overview
Background: On March 27th, President Trump signed the CARES Act, legislation that will provide emergency funding to steer our economy through the outbreak of the China Virus and help Americans meet their financial needs. Part of that legislation provides loans to struggling businesses, non-profits, and other entities through the Small Business Administration. Those loans are also eligible for forgiveness when used for the certain purposes, including payroll, rent, mortgage interest, and utilities.
Interested Borrowers/Lenders: If you are a potential borrower interested in participating in the Paycheck Protection Program, you should contact your financial institution and ask if they are a Small Business Administration 7(a) approved lender or if they intend to participate in the Paycheck Protection Program. If so, they can likely help steer you through this process. If you would like to find an approved SBA lender or if you are a financial institution interested in participating in the program, you can contact the Small Business Administration Arkansas District Office at (501) 324-7379.
Common Questions and Answers
Q. Where can I apply for the Paycheck Protection Program?
A. You can apply for the Paycheck Protection Program (PPP) at any lending institution that is approved to participate in the program through the existing U.S. Small Business Administration (SBA) 7(a) lending program and additional lenders approved by the Department of Treasury. This could be the bank you already use, or a nearby bank. There are thousands of banks that already participate in the SBA's lending programs, including numerous community banks. You do not have to visit any government institution to apply for the program. You can call your bank or find SBA-approved lenders in your area through SBA's online Lender Match tool. You can call your local Small Business Development Center or Women's Business Center and they will provide free assistance and guide you to lenders.
Q. Who is eligible for the loan?
A. You are eligible for a loan if you are a small business that employs 500 employees or fewer, or if your business is in an industry that has an employee-based size standard through SBA that is higher than 500 employees. In addition, if you are a restaurant, hotel, or a business that falls within the North American Industry Classification System (NAICS) code 72, "Accommodation and Food Services," and each of your locations has 500 employees or fewer, you are eligible. Tribal businesses, 501(c)(19) veteran organizations, and 501(c)(3) nonprofits, including religious organizations, will be eligible for the program. Nonprofit organizations are subject to SBA's affiliation standards. Independently owned franchises with under 500 employees, who are approved by SBA, are also eligible. Eligible franchises can be found through SBA's Franchise Directory.
Q. I am an independent contractor or gig economy worker, am I eligible?
A. Yes. Sole proprietors, independent contractors, gig economy workers, and self-employed individuals are all eligible for the Paycheck Protection Program.
Q. What is the maximum amount I can borrow?
A. The amount any small business is eligible to borrow is 250 percent of their average monthly payroll expenses, up to a total of $10 million. This amount is intended to cover 8 weeks of payroll expenses and any additional amounts for making payments towards debt obligations. This 8 week period may be applied to any time frame between February 15, 2020 and June 30, 2020. Seasonal business expenses will be measured using a 12-week period beginning February 15, 2019, or March 1, 2019, whichever the seasonal employer chooses.
Q. How can I use the money such that the loan will be forgiven?
A. The amount of principal that may be forgiven is equal to the sum of expenses for payroll, and existing interest payments on mortgages, rent payments, leases, and utility service agreements. Payroll costs include employee salaries (up to an annual rate of pay of $100,000), hourly wages and cash tips, paid sick or medical leave, and group health insurance premiums. If you would like to use the Paycheck Protection Program for other business-related expenses, like inventory, you can, but that portion of the loan will not be forgiven.
Q. When is the loan forgiven?
A. The loan is forgiven at the end of the 8-week period after you take out the loan. Borrowers will work with lenders to verify covered expenses and the proper amount of forgiveness.
Q. What is the covered period of the loan?
A. The covered period during which expenses can be forgiven extends from February 15, 2020 to June 30, 2020. Borrowers can choose which 8 weeks they want to count towards the covered period, which can start as early as February 15, 2020.
Q. How much of my loan will be forgiven?
A. The purpose of the Paycheck Protection Program is to help you retain your employees, at their current base pay. If you keep all of your employees, the entirety of the loan will be forgiven. If you still lay off employees, the forgiveness will be reduced by the percent decrease in the number of employees. If your total payroll expenses on workers making less than $100,000 annually decreases by more than 25 percent, loan forgiveness will be reduced by the same amount. If you have already laid off some employees, you can still be forgiven for the full amount of your payroll cost if you rehire your employees by June 30, 2020.
Q. Am I responsible for interest on the forgiven loan amount?
A. No, if the full principal of the PPP loan is forgiven, the borrower is not responsible for the interest accrued in the 8-week covered period. The remainder of the loan that is not forgiven will operate according to the loan terms agreed upon by you and the lender.
Q. What are the interest rate and terms for the loan amount that is not forgiven?
A. The terms of the loan not forgiven may differ on a case-by-case basis. However, the maximum terms of the loan feature a 10-year term with interest capped at 4 percent and a 100 percent loan guarantee by the SBA. You will not have to pay any fees on the loan, and collateral requirements and personal guarantees are waived. Loan payments will be deferred for at least six months and up to one year starting at the origination of the loan.
Q. When is the application deadline for the Paycheck Protection Program?
A. Applicants are eligible to apply for the PPP loan until June 30th, 2020.
Q. I took out a bridge loan through my state, am I eligible to apply for the Paycheck Protection Program?
A. Yes, you can take out a state bridge loan and are still be eligible for the PPP loan.
Q. If I have applied for, or received an Economic Injury Disaster Loan (EIDL) related to the China virus before the Paycheck Protection Program became available, will I be able to refinance into a PPP loan?
A. Yes. If you received an EIDL loan related to the virus between January 31, 2020 and the date at which the PPP becomes available, you would be able to refinance the EIDL into the PPP for loan forgiveness purposes. However, you may not take out an EIDL and a PPP for the same purposes. Remaining portions of the EIDL, for purposes other than those laid out in loan forgiveness terms for a PPP loan, would remain a loan. If you took advantage of an emergency EIDL grant award of up to $10,000, that amount would be subtracted from the amount forgiven under PPP.