“You will keep in perfect peace those whose minds are steadfast, because they trust in you.”
Isaiah 26:3
We are certainly living in unprecedented times, however, as Isaiah 26:3 tells us, when we trust in the Lord we are able to be kept by God in His perfect peace. We are living in unknown times, yet we serve a God who does know and is equipping His people to continue expanding His Kingdom. Amid the continued spread of COVID-19 in the United States, individuals, places of work, and government are navigating how to both survive and care for those around them.
As many of you are aware The United States Congress passed the Coronavirus Aid, Relief and Economic Security (CARES) Act to help with the effects of the stay home orders in the United States.
The CARES Act is made up of multiple components.
Paycheck Protection Program
The Paycheck Protection Program will provide aid to small businesses, including churches, to retain workers and continue the expanding of His Kingdom during this time of crisis.
This program is for small businesses who were in operation on or before February 15, 2020, who employ 500 or fewer employees and includes 501©3 nonprofit organizations. The loans max out at 2.5 times the average monthly payroll cost of Jan 1, 2019 to Dec 31, 2019 or $10 million, whichever is less. Payroll costs are limited up to $100,000 per employee and include:
Employee salaries and other wages, such as housing allowance, and payments made to an individual contractor
Employer paid health care benefits and employer paid retirement benefits
Employer paid state and local payroll taxes
There are stringent expectations on what the Program funds should be used for and the time frame for the funds to be used. Look at this Small Business Guide and Checklist created by the US Chamber of Commerce for a detailed look at the Paycheck Protection Program.
Please advise that this is a dynamic Act. The Small Business Administration is still working out the details of how the act will be executed.
Federal Unemployment Provisions
The CARES Act expanded unemployment insurance (UI) for workers, including:
a $600 per week increase to benefits for up to four months
extending unemployment benefits for 13 weeks
AND federal funding to provide UI for individuals who are not usually eligible for unemployment (self-employed, independent contractors, those now unable to work due to caring for children during COVID-19, etc.).
Individual Stimulus Checks and additional individual provisions
The CARES Act includes refundable tax credits for individuals of $1,200 per individual and $500 per dependent. The rebates are not counted as taxable income and will be a credit against tax liability with 2020 personal tax returns.
There are income thresholds that will decrease the rebate received. However, those who hit the income thresholds will still receive 5 percent per dollar of qualified income or $50 per $1000. The rebate phases out completely with income at $99,000 for singles with no dependents and $198,000 for joint taxpayers with no dependents.
The rebate uses 2018 and 2019 tax return income. If an individual’s 2020 tax return income is different the rebate may be added to their 2020 refund as either refundable to the US government or as an additional rebate.
Additional individual provisions include:
A $300 partial above-the-line charitable contribution for filers taking the standard deduction on their 2020 tax return
The 10% early withdrawal penalty on retirement account distributions is waived and re-contributions can be made for three years without affecting the retirement account cap
Certain employer payments of student loans on behalf of employees are excluded from taxable income up to $5,250 annually.
We have created resources and will continue to provide opportunities for partnership during this season. Get on our email list to make sure you don’t miss any new information!
Wisdom Over Wealth continues to partner with churches and see the Kingdom expanded. Reach out to Wisdom today to see how we can partner with you through this season!
Wisdom Over Wealth has created a CARES Act Payroll Protection Program Calculator that you can download for free!