• Kyle Hill, CFP®

3 Things You Need to Know About the CARES Act


On March 27, 2020, President Trump signed into law the $2 Trillion CARES Act, a relief effort to help individuals and businesses during the Coronavirus pandemic that has essentially shut down the American economy. This is the largest spending bill in the history of the world. Just add it to our debt tab of $23 Trillion, and growing. On top of this, there will probably be additional relief bills in the coming weeks, and/or months to aid the American people in this very strange time. While I’m no fan of our government running up massive debt, this relief package is needed by the American people.


You may be asking, "what’s in it and what does it mean to me (the CARES Act)?"


Glad you asked. 

While there are other parts to the bill, and maybe future blog posts, these are the main parts that may affect you and are described below:

1. Direct Payments


As a part of the bill, the federal government is going to issue direct relief payments to individuals. Payments will be based on 2019 tax filings, if it has been filed. Otherwise it’ll be based on your 2018 tax filing. Each individual that qualifies will receive up to $1,200. For married filing jointly, couples will receive $2,400 ($1,200 per individual). 


Eligibility is based on your tax filing status and your AGI (Adjusted Gross Income - Line 7 on Form 1040 2018, Line 8b on Form 1040 2019).


  • Married Filing Jointly - making up to $150,000

  • Head of Household - making up to $112,500

  • All Other Filers (e.g., Single) - making up to $75,000 


At or below the above stated phaseouts, individuals will receive the full amount. Above the phase out, $5 is lost per every $100 of additional income.

Most will receive payments direct deposited into your bank account that’s on file with the IRS. 

Additionally, you’ll receive $500 per child under the age of 17. 


The government wants these payments made as soon as possible. In all likelihood, you’ll probably receive payments in late April to early March. Just confirm, if you’re eligible, the IRS has your correct information (e.g., banking information for direct deposit is the same from most recent tax filing). 



2. Student loans


Federal student loan payments have been deferred until September 30th of 2020. That means no payments are required until September 30th, 2020. In addition, no interest will accrue during this period (you won’t be charged interest). 


Great news for those on forgiveness programs (e.g., PSLF), this will count towards your forgiveness program. So you don’t have to make payments during this period, but it will count as though you did.


Now, required payments are suspended, but voluntary payments are not prohibited… meaning you must be proactive to stop payments if you wish to do so. They will not automatically stop your payments.

If you have questions about your eligibility, contact your student loan servicer.

3. Unemployment

Unemployment now has expanded eligibility, longer duration, and bigger checks. This is big news considering nearly 10 million people have filed for unemployment in the last 2 weeks. Prior to the pandemic, national unemployment figures were at historical lows hovering around 3.5%.


Expanded eligibility includes, Pandemic Unemployment Insurance. This is unemployment compensation for those who don’t qualify for anything else.


Under normal circumstances, there is a one week waiting period before collecting unemployment. The CARES Act, provides elimination of the waiting period. The federal government will cover the first week of unemployment (waiting period).


Checks will be larger. The “Regular” state unemployment benefit will have an additional $600 per week for up to four (4) months.


Lastly, unemployment benefits have an extension of thirteen (13) extra weeks of unemployment insurance.



For additional resources, you can read the 880 pages of the CARES Act https://www.congress.gov/bill/116th-congress/senate-bill/3548/text, or for faster relief, the Tax Foundation has a helpful resource page.  https://taxfoundation.org/federal-coronavirus-relief-bill-cares-act/



I hope this helps bring some clarity to your situation and how the CARES Act could impact you. Please let me know if you have any questions by dropping me an email. If you want to chat about what’s going on with the coronavirus pandemic and how you’re feeling about everything, schedule a short call with me.


As always, I’m here to help.


Take care, and be safe.


Kyle Hill, CFP® is a CERTIFIED FINANCIAL PLANNER™ professional that is based is Kansas City, MO and serves clients Nationwide. He is the owner, founder, and financial planner of Hill-Top Financial Planning, LLC, an independent, Fee-Only registered investment advisor in the state of Missouri that provides comprehensive financial planning, and investment management services to young professionals and families. Kyle helps clients build custom, personal financial plans to help them bring clarity to their financial situation so they can build wealth and become financially independent. He helps clients with a range of personal financial topics ranging from: budgeting, cash flow planning, debt elimination, investing, retirement savings, college savings, insurance planning, tax planning, and much more. Hill-Top Financial Planning, LLC serves clients as a fiduciary and never earns a commission of any kind.

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