The CARES Act: What veterinary staff should know
On March 27, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a sweeping, $2 trillion bill aimed at providing relief to millions of Americans as the US economy is seemingly grinding to a halt.
How will this affect veterinary practices and their employees? NEWStat has compiled information below on the impact this complex legislation will have on veterinary staff and employees.
What the CARES Act means for veterinary staff
The check is in the mail (soon)
Under the CARES Act, individuals earning less than $75,000 per year will receive a “recovery rebate” check from the government for $1,200. Couples filing jointly earning less than $150,000 will get a $2,400 check. Families will also receive $500 per child (under 17). Checks are supposed to start showing up in late April, according to the IRS.
Retirement accounts penalty waived
This is probably still not a good idea, but under the new law, in 2020 you can get up to $100,000 out of your individual retirement account or 401(k) without the 10% penalty that usually applies for early distribution before age 59½. If possible, it is better to leave it alone. But if you really need it, it could be a reasonable way to get some extra cash flow.
To get this benefit, it has to be a “coronavirus-related distribution,” which is pretty wide open to interpretation right now. The withdrawal is taxable, but you can spread the amount you take out over three years’ worth of income starting in 2020.
Talk to your financial advisor first!
Student loan payments suspended
Good news! That five jillion dollars that goes out each month to repay your federal student loan from veterinary school can be suspended for six months. Also suspended is interest on those loans until September 30, 2020. More good news: If you are in a loan forgiveness program, those months where payments are suspended will still count as months that you paid on time.
Expanded unemployment benefits
The CARES Act funnels $250 billion into the new Pandemic Unemployment Assistance program. The program expands unemployment benefits for workers needing support during the pandemic. Under the law, self-employed and independent contractors—a category that includes relief veterinarians—are eligible for unemployment benefits. Furloughed workers—those who are temporarily laid off—are also eligible to apply.
Another feature of the law is that unemployment checks will include $600 per week on top of whatever you would usually get according to state laws (generally between one-third and one-half of your normal wages).
Most states allow for 26 weeks of unemployment, but the CARES Act would extend that by 13 weeks for those who need it.
New leave options
If your employer is a “small business,” with 500 or fewer employees, you could qualify for newly expanded paid leave options. These options apply if you become sick, if you need to care for a sick family member, or if you need to care for your child at home due to the pandemic.
Small businesses (which most veterinary practices are) are required under the new law to offer emergency Family Medical Leave Act (FMLA) leave, providing 12 weeks of job-protected leave for childcare. The first 10 days of leave would be unpaid, then paid after that. In addition, full-time employees will be required to receive 80 hours of paid sick leave.
What does all this mean for employers? Check back tomorrow when we will review what the CARES Act means for veterinary practice owners.
More information: The AVMA has extensive information on COVID-19-related legislation available here.
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