Congress worked fervently last week to complete the CARES Act. This $2-trillion, bipartisan deal, short for the Coronavirus Aid, Relief, and Economic Securities Act, includes cash payments to individuals, expanded unemployment benefits, and Small Business Administration Disaster Loans. If your massage therapy career is facing a major hurdle in the form of COVID-19, financial relief may be on the horizon. Let’s analyze how massage therapists can access the CARES Act’s resources.
Individual Cash Transfers
The CARES Act includes direct payments to individuals, to be distributed in the next couple of weeks. Eligible families will generally receive $1,200 per adult and $500 per child. For a personalized estimate, we recommend you read this Washington Post article, which includes a calculator you can use to figure out the likely amount of your CARES act check.
When can you expect this check? A recent IRS publication specifies that payments will go out in the next three weeks and will be calculated according to 2019 tax returns. If you have not yet filed taxes for 2019 (the deadline for doing so has been extended to July 15), your check will be based on your 2018 taxes. Therefore, if you had a major change in revenue in 2019, particularly a major decrease, it behooves you to file your 2019 taxes ASAP. The check amount will be $1,200 per individual for those with incomes up to $75,000. That payment amount will be decreased by $5 for each additional $100 above the $75,000 threshold.
Expanded Unemployment Benefits
Traditionally, only full-time employees are eligible for unemployment. The CARES Act has eased these restrictions, so that part-time and self-employed individuals may also receive unemployment benefits due to coronavirus-related loss of work. As such, massage therapists who operate as sole-proprietors and contract workers will be eligible.
The rollout of this program is not crystal clear. For instance, when will these expanded benefits begin? In one section, the CARES Act specifies February 15 as the start date for increased eligibility; in another place it states the augmented eligibility will begin once each states enters into a contract with the US Department of Labor (which will likely occur in the next couple of days).
Unemployment benefits always include a portion of your recent earnings; however, the CARES act includes an additional $600 of special coronavirus relief from the federal government.
A final adjustment to traditional unemployment is when benefits may be collected. Typically, unemployment benefits are not paid for the first week of eligibility; the CARES act waives this requirement, allowing for faster payments.
In order to be eligible for unemployment payments, individuals must apply for unemployment benefits, continue actively seeking work, keep a record of job-seeking efforts, and register with the state. The CARES act requires states to “provide flexibility in meeting such requirements in cases of individuals unable to search for work because of COVID-19, including because of illness, quarantine, or movement restriction.”
Small Business Administration (SBA) Disaster Loans
Beginning March 26, small businesses may apply for long-term, low-interest Economic Injury Disaster Loans. Of course, these will need to be paid back, but they may allow you to keep your business afloat. Sole proprietors are eligible through June 30th, 2020. They may apply for SBA loans here.
Partnerships, limited partnerships, limited liability entities, and corporations may apply for SBA loans here.
Additional Financial Resources
We recommend keeping an eye on the New York Times’ Hub for Help during the Coronavirus Crisis. This excellent resource includes information on receiving paid leave, which the CARES Act also expanded. (Note: Part-time and self-employed workers are also included in this paid leave allowance, although self-employed individuals will receive the benefit in the form of tax credits.) This site also includes financial advice on how to survive this crisis, including taking steps like pausing your federal loans.
Finally, we encourage you to keep abreast of state and local news, where you may discover additional financial resources. For instance, $2 million in grants is being distributed to Portland businesses. To be considered for this grant, apply by April 1st through Prosper Portland.
It is likely that additional loans and grants will be made available in the coming weeks and months. We will continue to keep an eye on developments and share them with you though our social media sites (we’re on Facebook, Instagram, and Twitter) as well as through this blog. Financial savviness in the face of worldwide epidemics is not a topic that is typically covered in massage classes, nor in massage continuing education, but we will be here to support you through these challenging times.