CARES Act

Full Name: Coronavirus Aid, Relief, and Economic Security Act

Overview

The CARES Act was a comprehensive economic stimulus bill passed by Congress in response to the COVID-19 pandemic. It was the largest economic relief package in U.S. history, designed to provide immediate financial assistance to individuals, families, and businesses affected by the pandemic.

The legislation was signed into law on March 27, 2020, and included provisions for direct payments to individuals, expanded unemployment benefits, small business assistance, healthcare support, and support for state and local governments.

Key Components

Economic Impact Payments

The CARES Act provided direct payments to eligible Americans to help offset the economic impact of the pandemic:

• Amount: Up to $1,200 per individual ($2,400 for married couples filing jointly)
• Additional: $500 per qualifying child under age 17
• Income Thresholds: Full payment for individuals with AGI up to $75,000 ($150,000 for married couples)
• Phase-out: Payments reduced by $5 for every $100 above threshold, completely phased out at $99,000 ($198,000 for married couples)
• Distribution: Payments were automatically sent to those who filed 2018 or 2019 tax returns

Unemployment Benefits Expansion

The CARES Act significantly expanded unemployment benefits to help workers who lost their jobs due to the pandemic:

• Federal Pandemic Unemployment Compensation: Additional $600 per week on top of state benefits (through July 31, 2020)
• Pandemic Unemployment Assistance (PUA): Extended benefits to self-employed workers, gig workers, independent contractors, and others not typically eligible
• Pandemic Emergency Unemployment Compensation (PEUC): Extended benefits for 13 additional weeks beyond state limits
• Extended Benefits: Provided up to 39 weeks of total unemployment benefits

Paycheck Protection Program (PPP)

The PPP was designed to help small businesses keep their workforce employed during the pandemic:

• Initial Assistance Pool: $349 billion (later expanded to over $800 billion)
• Assistance Amount: Up to 2.5x average monthly payroll costs
• Forgiveness: Funds could be fully forgiven if used for payroll (at least 60%), rent, mortgage interest, or utilities
• Terms: 1% interest rate, 5-year term, no collateral or personal guarantees required
• Eligibility: Small businesses with fewer than 500 employees, sole proprietors, independent contractors

Economic Injury Disaster Loans (EIDL)

The EIDL program provided low-interest financial assistance and emergency grants to small businesses:

• Assistance: Up to $2 million at 3.75% interest (2.75% for nonprofits)
• Emergency Grants: Up to $10,000 advance (later $1,000 per employee, max $10,000)
• Use: Working capital, operating expenses, fixed debts
• Repayment: Up to 30 years, first payment deferred for one year

Additional Provisions

Eligibility

Eligibility varied by program component:

How to Apply

Note: Most CARES Act programs have closed, but some components may still be available:

• Economic Impact Payments: If you didn't receive payments, you may claim them on your 2020 tax return using the Recovery Rebate Credit
• Unemployment Benefits: Contact your state unemployment office for information about extended benefits
• PPP Forgiveness: If you received PPP funds, you can still apply for forgiveness through your lender
• EIDL: Check with the SBA for any remaining availability

Impact and Results

Important Dates

• March 27, 2020: CARES Act signed into law
• April 2020: First Economic Impact Payments distributed
• April 3, 2020: PPP program opened
• July 31, 2020: Additional $600 unemployment benefits ended
• December 2020: PPP program closed to new applications
• December 31, 2020: Deadline to claim 2020 Recovery Rebate Credit

Resources

Related Programs

Explore other related stimulus programs: