What's in the CARES Act for Science Writers
On March 27, Congress passed the $2 trillion stimulus package — the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The law is designed to help businesses and individuals who have been financially hit by the COVID-19 pandemic.
Below are summaries of provisions that are likely to be pertinent to science writers. Implementation of some of these provisions—particularly the Paycheck Protection Program that enables banks to extend emergency loans to small businesses and freelancers—is still evolving and awaiting further guidance from the Small Business Administration. We will update this page as more details become available.
If you have lost your job, been furloughed, or otherwise are suddenly out of work, you can apply for unemployment insurance.
The law now allows states to extend normal benefits by 13 weeks and allows individuals to receive benefits during their first week of unemployment if the state didn’t already cover this. If a recipient’s state does not allow for unemployment benefits to be received in the first week of unemployment, the Act also provides funding to cover the first week, allowing recipients to begin receiving the benefits immediately.
Individuals can receive an additional $600 per week beyond the normal amount for up to four months from the time of enactment. Each state is implementing these provisions through its normal unemployment insurance program, so you’ll need to apply through the government portal in your state.
- Washington – https://esd.wa.gov/unemployment
- Oregon – https://www.oregon.gov/employ/unemployment/pages/default.aspx
- Idaho – https://www.labor.idaho.gov/dnn/Unemployment-Benefits
The law extends benefits to part-time workers, freelancers, and independent contractors who would not normally be eligible for benefits. Those workers should file through a new program, called Pandemic Unemployment Assistance (PUA), which is also operated by each state and accessible through the unemployment insurance portals listed above.
Also qualified for PUA:
- those who have exhausted their standard state unemployment benefits and who would normally be able to work but can’t due to COVID-19-related reasons,
- those who had to stop working in order to care for family members or to homeschool children,
- those whose employer has been forced to close,
- and those who had a job lined up but lost it or can’t go to it as a result of COVID-19.
Of special note for writers, having the ability to telework with pay may exclude you from qualifying for PUA.
Many science writers have full-time or part-time jobs in addition to a freelance business. It is not yet clear to us whether PUA eligibility will extend to lost freelance work in these cases, nor how freelance income will affect (if at all) unemployment benefits available to those laid off from their jobs. States may interpret the law differently for such situations. We have reached out to each state’s unemployment office for guidance and will update this page with more information when we have it.
SMALL BUSINESS LOANS
The CARE Act also includes relief to many businesses, non-profits, and sole proprietors through two loan programs, the Economic Injury Disaster Loan (EIDL) program and the Paycheck Protection Program (PPP). [UPDATE: On April 16, the U.S. Small Business Administration ran out of appropriated funds and stopped processing loan applications for both the EIDL and PPP programs. Congress is debating a bill that would add new funds to the program.]
Businesses that have incurred lost revenue, increased expenses, or other kinds of economic damage attributable to the public health emergency since January 31, 2020 can apply for the EIDL program through the Small Business Administration. The EIDL provide low-interest loans of up to $2 million, with the amount depending on the information provided in the loan application.
Importantly for science writers, the EIDL is available to sole proprietorships, single-member LLCs, S corporations, independent contractors, and non-profit organizations, as well as businesses having 500 employees or fewer. Those in these categories should apply now for a $10,000 emergency grant, which does not need to be repaid. The SBA offers EIDL unsecured loan amounts up to $200,000 without a personal guarantee and up to $25,000 without collateral; unlike the emergency grants, those loans do incur interest and must be repaid. Note that a business receiving a $10,000 emergency grant and also receiving a loan through the PPP will have the $10,000 subtracted from the PPP amount forgiven.
The Paycheck Protection Program is designed to help businesses cover mainly payroll expenses, up to 250% of your normal monthly payroll costs (with a maximum of $10 million). Loans, which have a 1% interest rate and a 2-year term, can be forgiven if the business has no layoffs or rehires employees who have been laid off by June 30, 2020. The first loan payment is not due until 6 months from loan origination. Banks and other lenders, not the SBA, are now accepting applications for PPP loans.
There is currently some confusion about whether amounts that employees have withheld from their paychecks for taxes are included in the forgivable amounts. It is expected that Congress or the Administration will clarify this situation in the weeks to come.
You can apply for both the EIDL and PPP programs as long as the money from each is used for different purposes. Both loans cannot be used to make payroll, for example. EIDL loans received from the SBA since January 31 can be refinanced into a PPP loan from a lender.
Both the EIDL and PPP loans are being made from a fixed allocation of funds on a first-come, first-served basis, so if you qualify, you should apply immediately. PPP lenders are currently being swamped with applications and recommend applying to multiple lenders to increase your chances of receiving a loan before the funds run out.
AUTOMATIC TAX CREDIT PAYMENTS
If you filed a tax return for tax year 2018 or 2019 or received Social Security benefits in either of those years, the IRS will likely be sending you a one-time payment, which is called a tax credit but will not affect the amount of taxes you owe on your 2020 return. No action on your part is required to receive this payment. The amount of the check will depend on that adjusted gross income (AGI) reported on your most recent tax return and on your filing status:
- Filing singly and AGI is less than $75,000 a year: $1,200.
- Filing as head of household and AGI is less than $112,500: $1,200.
- Filing as married with a joint tax return and AGI is less than $150,000: $2,400.
- Households with children under 17 will receive an additional $500 for each child, if the parent’s income qualifies.
The check amount decreases by $5 for every $100 over the threshhold income level. For example, if your AGI was $85,000, then your check should be $1200 – ($5 * $10,000 / $100) = $700.
Taxpayers whose AGI exceeds $99,000 as a single filer or $198,000 as a couple do not qualify for these payments. Also not eligible: adults who are claimed as dependents or households having members who are undocumented immigrants.
If the IRS has your bank info, the payment will likely be sent through direct deposit. Non-filers can use this form to provide bank information to the IRS to receive these payments electronically. The IRS says it expects to make 60 million such payments by mid-April. Payments that must be mailed may take considerably longer to arrive. Click here for more details from the IRS.
OTHER FORMS OF RELIEF
The CARES Act also suspends payments and interest for certain types of student loans and directs additional money to SNAP, WIC, and other nutrition programs. It also waives early withdrawal penalties from certain retirement accounts and allows people to apply for forbearance of mortgages. See this U.S. Treasury page for more details on these provisions.