COVID-19, the CARES Act, and State and Local Government

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COVID-19, the CARES Act, and State and Local Government Photo Credit: Wikimedia Commons

by Sevion DaCosta ’21, Tara Mehra ’23, Robin Peterson ’22,

Henry Schulz ’22, and Nathan Tran POM ’23 May 6, 2020

Andrew E. Busch, Faculty Supervisor

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is intended to flood money into the economy and generate enough spending to prevent a full-blown recession caused by the COVID-19 pandemic. It provides emergency assistance to individuals, families, and businesses through the form of cash payments, bolstered unemployment benefits, small business loans, and the suspension of student loan payments and interest. The law appropriates funds for state and local governments as well to be distributed based on population. As heavily discussed in the media, the CARES Act authorizes millions of payments to be sent to individuals and families to help with expenses caused by the coronavirus. The intent of issuing one-time checks is to aid those who are suffering economic loss and unemployment as a result of the pandemic. Expert financial analysts consider the check a “rainy day” fund, and recommend that it be used for essentials such as rent, groceries, and emergency supplies.1 The extra money is meant to allow more people to pay their landlords and contribute to their local economy. Under Section 2201 of the CARES Act, the law breaks down who will be getting a tax credit and what the requirements are. All incomes will be based on the households or individuals’ 2018 tax return, unless they filed their 2019 tax return--in which case it will be based on their most recent filing. Individuals who did not file a tax return in 2018 or 2019, are still eligible to receive stimulus payments. People who get social security retirement, disability (SSDI), survivor benefits, Supplemental Security Income (SSI), recipients of Veterans Affairs benefits, and those who receive Railroad Retirement benefits will get the payment through those programs.2 Finally, people who are eligible, but who do not fit into any of the automatic payment categories, can apply directly to the IRS for payments.3 Individuals will get $1,200 in the form of a tax credit if their tax return shows they make less than a specified amount. If a couple files a joint tax return and makes less than $150,000 per year, the couple will receive


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COVID-19, the CARES Act, and State and Local Government by Rose Institute, CMC - Issuu