Although the CARES Act’s $2 trillion allocation to the economy has been compared to President Obama’s 2009 American Recovery and Reinvestment Act, the more recent measure should be thought of as a relief effort, rather than economic stimulus. CARES is addressing the immediate fallout in the business world and in peoples’ personal finances, an attempt to cushion the impact of social distancing and the loss of work and business that it entails.
The big picture perspective is that the CARES Act allocates $150 billion to enhance hospital capacity, a $500 billion loan fund for businesses in distress and $150 billion in direct support to state and local governments to help fight the coronavirus epidemic.
On top of that, the government will be cutting checks directly to individuals. The IRS will look at your 2019 tax returns (or 2018 if it can’t find a 2019 filing) and send $1,200 to single filers with adjusted gross income below $75,000; $2,400 to joint filers with AGI below $150,000. The government will add $500 for each dependent under the age of 17. These benefits will phase out at higher income levels (you lose $5 for every $100 in income above the threshold), until they reach zero for a single filer with no children and an adjusted gross income of $99,000. It has been estimated that three-quarters of tax filers will qualify for aid, and that the total amount of all those checks will reach $507 billion.
Some people who did not file a 2018 or 2019 tax return because they earned less than the standard deduction might qualify otherwise; for example, for people who receive Social Security benefits, the government will determine their eligibility for a check based on their Form SSA-1099, Social Security Benefit Statement.
But many others will be left out of the distribution. Individuals without Social Security numbers are also excluded—leaving out Dreamers and families of filers with only Individual Taxpayer Identification Numbers. Dependents over the age of 17 (including cared-for parents and disabled children) are also not eligible for the direct payment....