Capital Investment Advisors

Coronavirus Aid Relief Emergency Security (CARES) Act

Questions & Answers

Coronavirus Aid Relief Emergency Security (CARES) Act

Questions & Answers

Our CARES Act Task Force is answering questions every day from readers, listeners and viewers just like you. If you have a question for our team, please submit it here.

Update: As of 4/16, the SBA and White House announced that the first round of appropriated funds for PPP & EIDL have been exhausted. That’s right, all $350 billion of it, in two weeks. There is an additional stimulus on the docket right now. Due to the demand, I hope they come to a resolution quickly, but that will take a few more days possibly weeks.

Question: We own a restaurant and had to close temporarily last week and layoff 39 employees. We want to re-open when things settle down as we’ve been in business almost 30 years. My question is if we haven’t kept our employees on the payroll can we take advantage of getting the utilities and rent assistance?

Answer: In order for the loan amounts to be forgiven, the business must maintain the same number of employees (equivalents) from February 15, 2020 through June 30, 2020 as it did during either the same period in 2019 or from January 1, 2020 until February 15, 2020. To the extent this requirement is not met, the amount eligible for forgiveness will be reduced, ratably. Additional reductions in the amount to be forgiven will be incurred if employees with under $100,000 of compensation have their compensation cut by more than 25% as compared to the most recent quarter.

HOWEVER – there is flexibility for business that re-hire workers that were previously laid off.
Declines in headcount or wages between February 15, 2020 and April 26, 2020 will not trigger a reduction in loan forgiveness if the business reverses the decline and returns to pre-decline levels by June 30, 2020. Loan forgiveness will not be included in a business’s taxable income.

Question: What is the fewest amount of employees a small business can have to qualify for these SBA PPP loans?

Answer: Sole proprietorships, independent contractors, and other self-employed individuals are eligible. The limit is on the maximum number of employees, which is 500 (per physical location in the case of food services).

Question: As a Realtor (sole proprietor/independent contractor), is it better to apply for the emergency grant (up to $10,000), a PPP loan, or PUA?

Answer: Click here for an article we posted on comparing these three options:

  • Paycheck Protection Program (PPP)
  • Economic Injury Disaster Loan (EIDL)
  • Pandemic Unemployment Assistance (PUA)

Which is the best choice for you will really boil down to your specific situation.

It will really boil down to:

  • How much you qualify for under each option.
  • How quickly do you need the funds.
  • Your expectations for forgiveness/taxation.

Assuming your average monthly payroll costs are $8,333.33 per month ($100,000.00 per year, capped at $100K per individual), you would qualify for roughly $20,833 under PPP which would be forgiven as long as you keep yourself employed. If you have a current lender for your real estate business, I would reach out to him/her as this might be your fastest option.

If you don’t have a current banking relationship you can use this link to find an eligible SBA lender by zip code (we have heard Synchrony and Fifth/Third are taking applications).

If you don’t have a banking relationship your next best option would be to apply directly through SBA here for EIDL. Just keep in mind that, unlike the PPP loan, only up to $10,000 of the EIDL is forgivable.

Applying for PUA here will likely take the longest to confirm eligibility and this is also 100% taxable.

But that’s the order I would likely recommend for your case:

  • Option 1: PPP if you have a current lender (forgiveness)
  • Option 2: EIDL if you don’t have a current lender (only $10K eligible for forgiveness)
  • Option 3: PUA if you are denied options 1 & 2

Question: I can’t find anywhere whether part time employees can be paid through PPP. I know you are supposed to use their figures in applying. But do you know if there is loan forgiveness for keeping them on and paying their salaries? Not 1099 just W 2 part time.

Answer: You are correct in that part-time W-2 employee  salary/wages (not 1099 contractors) are included in your Payroll Cost calculation.

As part of your Paycheck Protection Program Borrower Application, applicants are required to provide:

  • Number of employees (top right page 1)
  • Documentation certifying the number of full-time equivalent (FTE) employees on the Applicant’s payroll (page 2, Certifications, item 4)

Here is where “loan forgiveness” comes into play.

The amount of loan forgiveness will be reduced by the average of FTE employees for the eight (8) week period from the start of the loan (FTE Post PPP Loan) divided by one of the following (FTE Loan Pre PPP):

  1. Average FTE employees from 2/15/19 to 6/30/19
  2. Average FTE employees from 1/1/20 to 2/29/20 (new business operating prior to 2/15/20)


  • Company (2019) has 10 employees: 5 full-time (40 hours per week) and 5 part-time (20 hours per week)
    • FTE employees (FTE Loan Pre PPP) = 7.5
  • Company is approved for $100,000 PPP Loan
  • During the eight (8) week period from the start of the loan, company terminates 1 full-time and 1 part-time employee
    • FTE employees (FTE Loan Post PPP) = 6.0
  • FTE Post PPP Loan / FTE Pre PPP Loan = 0.80
  • Forgivable Loan = $80,000 (0.80 x $100,000)

So as long as the Borrower maintains employee head count (full-time and part-time) and pays their salaries, the full loan will be forgiven as long as:

  • The Borrower does not reduce salaries by more than 25%
  • The Borrower spends 75% of the loan funds on payroll costs (remaining 25% on rent, utilities, mortgage interest)

Question: Need PPP help, I own a 35-year-old business. I bank at Wells Fargo who is not taking any more PPP loan apps, nor is any other lender it seems. What do we do?

Answer: We have had a few clients hit the same wall with Wells Fargo. Wells Fargo referred them to Synchrony and they were able to open a business account and submit an application successfully for PPP.

In addition to Synchrony, the SBA has published a website (click here) where you can search by zip code for eligible lenders in your area (I would check this site after contacting Synchrony).

As a third option, you can apply directly through the SBA for an Economic Injury Disaster Loan (EIDL). Here is the link to apply directly through SBA (click here).

  • With the EIDL you can receive an emergency grant up to $10,000 which has forgiveness feature similar to PPP
  • Once approved an EIDL can be refinanced into a PPP loan

So at this time, those are the three options:

  1. See if you can open business account and get approved through Synchrony
  2. If you hit the wall with Synchrony, try the SBA site
  3. If you hit the wall there, go for the EIDL and refinance to PPP

Question: Here’s where I’m confused. I’m a “solo act”, S-Corp consultant. I teach leadership and team building/staffing. My wonderful business, since 1988, easily weathers all economic climates EXCEPT a pandemic where, over night, with the shutting of many practices I’m out of work. My CPA (who is not pleasant or helpful these days), has my paycheck issued every quarter for an annual sum of $30,000. The rest of my income comes from draws I make. With my payroll being so small (and, working in a tiny out-building on my hobby farm), it seems more logical to me for me to file employer assisted unemployment with the GA DOL rather than tossing my hat into the PPP loan/forgiveness program. Yet, the last brief exchange with my CPA is an across the board “all of you who are self-employed should file for the PPP”. Am I missing something? First of all, I won’t be generating an income again on June 30. Offices I typically work with, if they are even open, will be in survival mode and my work will be for gratis and good karma. My work will resume once offices have need to staff for new employees and have money for marketing and skill development. We are a ways from that.

Answer: The CARES Act provides multiple relief options for small businesses (operational prior to February 15, 2020) including:

Think of PPP as a short-term forgivable grant to cover salaries (capped at $100,000 per employee), benefits, mortgage interest payments, rent, utilities.

So while I don’t know the annual expense of your health benefits, covered leave, rent, utilities etc., I do know from your question that your annual salary is approximately $41,000. So based on salary alone under PPP you would be eligible for:

  • $30,000 / 12 = $2,500/mo
  • $2,500 x 2.5 = $6,250
  • Forgivable as long as you maintain your solo act through June 30, 2020 and loan proceeds are documented for allowable use

So in this case, PPP might not be the best fit for you.

EIDL is for long-term non-forgivable financing based on half of your gross profit = gross revenue – cost of goods sold (up to $2 million with a max interest rate and term of 3.75% up to 30 years). EIDL offers an advance up to$10,000 that does not have to be repaid, but the EIDL (if approved) will have to be repaid. In addition to payroll, EIDL can be used to cover accounts payable and other expenses that can’t be paid because of the COVID-19 disaster impact.

  • EBL is available to small businesses who currently have a relationship with an SBA Express Lender and allows access up to $25,000 in advance (instead of $10,000)

EIDL is likely the best fit for you. You can apply directly for EIDL through SBA here.

PUA provides the following:

  • additional supplement of $600/week (in addition to regular state unemployment benefits which is $365/week in GA) until July 31, 2020
  • extends the state unemployment benefits by 13 weeks (39 weeks instead of 26 weeks) until December 31, 2020
  • expands eligibility to self-employed individuals and independent contractors
  • Click here for Georgia Department of Labor overview
  • So if you were approved for the PUA max benefit on April 17th you would be eligible for:
    • $365/week + $600/week = $965/week for 15 weeks (until July 31, 2020) = $14,475.00
    • $365/week for 12 more weeks (until December 31, 2020) = $4,380.00
    • $18,855.00 total (which would give you more than PPP, although this is non-forgivable)

Question: A few questions regarding the article in Sundays’ AJC regarding the PPP and Care’s program. We applied for the PPP with Truist, and as of yet it has not been processed. I need to terminate an employee for a legitimate reason, will this affect our repayment of the possible loan?

Answer: The SBA Paycheck Protection Borrower Application Form updated 4/2/20 (here) requests the following information:

  • Number of employees (page 1)
  • Documentation certifying the number of full-time equivalent (FTE) employees on the Applicant’s payroll (page 2, Certifications, item 4)

I have not seen the specific Truist PPP application form, but I would assume similar information is requested.

The information for borrowers on the U.S. Department of Treasury website (here) states the following on page 3, bullet 3 under “How much of my loan will be forgiven?”:

  • Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.”

So while on its face it appears that if an employer were to terminate an employee before April 26, 2020, they would still be eligible forgiveness provided that full-time employment per their submitted application was restored before June 30, 2020.

Although this guidance has been issued by the Treasury Department, I would encourage the applicant to confirm this directly with their lender (in this case, Truist) so there is no question or ambiguity regarding loan provisions for termination, re-hires and loan forgiveness.

Question: Results of a Google search on “stimulus bill” and “RMD” led me to several web sites that said the RMD suspensions are only available to people new to the RMD process. I’m 74 and have been taking them for several years. Am I exempt for 2020?

Answer: In regards to your question, you will be exempt from having to take your 2020 RMD, as Section 2203 of the CARES Act amends IRC Section 401(a)(9) to suspend Required Minimum Distributions (RMDs) during 2020. The relief provided by this provision is broad and applies to Traditional IRAs, SEP IRAs, and SIMPLE IRAs, as well as 401(k), 403(b), and Governmental 457(b) plans. Furthermore, the relief applies to both retirement account owners, themselves, as well as to beneficiaries taking stretch distributions.

Question: My question is about the up to $100k IRA withdrawal. In what YEAR does the ordinary income have to be reported? Is it $100k in 2020, $33k per year, etc. what happens if I put money back (modify prior returns,etc.). I find conflicting info. I know it is all new. Just want facts.

Answer: The way the distribution would work is that you can take up to $100K and it’s defaulted to be reported over the next 3 years (including 2020). You can elect to have all $100K reported in 2020 however.

If you do pay any of the distribution back, let’s say in 2022, then you would want to file an amended return to re-claim a refund of any tax paid attributable to the repaid amount.

Question: I was surprised to hear that RMDs for this year have been suspended. Can I somehow return money I have already withdrawn from our traditional IRAs? We’re both 73, and they are not inherited.

Answer: Yes, you can reinstate the money into your IRA, but when you took the IRA will determine how it is done. If you took the IRA in the last 60 days, this is still inside the window of doing an indirect rollover. You can open another IRA and deposit the funds in there (plus any taxes you may have had withheld). (Note that if you have done an indirect rollover in the last year this is not an option.) Now, if you took your RMD on January 1st for example, you are outside of this 60-day window. In this case, you would have to show that you were negatively impacted by COVID-19 to be able to replace the funds taken, but this would give you three years to deposit back. Another option in this scenario is to deposit in Roth and count it as a conversion. Normally you cannot convert the amount of your RMD, but in this case, it looks as though you can.

Question: You mentioned on your Sunday program that RMDs will be forgiven for 2020; however, I’ve already withdrawn mine and my husband has already withdrawn half of that. Are you aware of any provision or tax credit that we will be given to offset our withdrawal? Please advise. Thank you.

Answer: Please be advised Section 2203 of the CARES Act amends IRC Section 401(a)(9) to suspend Required Minimum Distributions (RMDs) during 2020. The relief provided by this provision is broad and applies to Traditional IRAs, SEP IRAs, and SIMPLE IRAs, as well as 401(k), 403(b), and Government 457)b) plans.

Returning Unwanted 2020 RMDs That Have Already Been Distributed

Despite the fact that we’re not quite yet through the first quarter of the year, a number of individuals have already taken their RMDs – or at least, what they thought was their RMD at the time – for 2020. Now, in light of the CARES Act, these individuals may wish to ‘return’ unwanted and no longer necessary RMDs.

For IRA, 401(k), and other retirement account owners, this may be possible in two different ways:

  1. In a best-case scenario, the ‘RMD’ distribution will have taken place within the last 60 days, and the distribution won’t be prevented from being rolled over due to the once-per-year rollover rule (either because it came from a plan, is going to a plan, or becuase no IRA-to IRA rollover has been made within the past 365 days). In such instances, an individual can simply write a check, or otherwise transfer an amount equal to the ‘RMD’ back into a retirement account before the end of the 60-day rollover window.
  2. For retirement account owners who took their RMD very early in the year, and for whom the 60-day rollover window has already expired, there is another potential approach. If it can be shown that the individual has been impacted by the COVID-19 crisis enough to qualify under the liberal guidelines outline for a Coronavirus-Related Distribution, then the rollover can still be completed…anytime for the next three years (from the date the distribution was received)!

Question: I am over 70.5 years and have started taking my MRD for 2020. Can I redeposit the amount back into my IRA even if I am outside the 60 day limit?

Answer: If you have taken your RMD and want to return it, but are outside of the 60 day indirect rollover window, you have two options:

  1. Claim a hardship for COVID-19 and put the money back into the IRA. Distributions from IRA/401ks are able to be returned by those “impacted by the Coronavirus” because they have been diagnosed with COVID-19, have a spouse or dependent diagnosed with COVID-19, experience adverse financial consequences as a result of the disease
    1. This last definition is what may enable you to return a distribution from a retirement account, and is intentionally liberal.
    2. Remember if you withheld taxes, you will need to put the gross amount back in (ex: you took out $10K, but withheld $2K, you would need to put $10K back in).
    3. You will want to make sure you work with a CPA to report everything correctly
  2. Convert the funds into a Roth IRA

Either will serve the purpose of putting the money back into a tax advantaged retirement account.

Question: I would like to know about applying for unemployment. I understand that the new bill provides a way for self-employed and contract workers to get some help with unemployment funds. I have never applied for unemployment so just curious about the process. Do I need to wait for links to be created for self-employed and contract workers? Do I apply at the state level or the federal level?

Answer: You will file a claim at the STATE level with your local office for your STATE Dept of Labor…the links have already been created.
Brief explain of state v/s federal level unemployment:
*The federal-state unemployment compensation program is a federal fund, but each state has its own unemployment program with its own qualification guidelines, benefit amounts and periods.
*The state programs operate based on federal laws.
So again, you apply (file a claim) with your local office for your STATE Dept of Labor.

Question: Do I have to pay taxes on my unemployment pay?

Answer: Yes, unemployment insurance payments are considered taxable income, reportable on a 1099-G.

Question: How long can I collect unemployment benefits?

Answer: Your claim lasts one year (your benefit year), but most states only pay benefits for 13 to 26 weeks (a little more than six months) during the year. During periods of high unemployment, the federal government may extend the benefit period, but at some point, benefits will stop. This has been extended an additional 13 weeks under the CARES Act.

Question: What if I did not get laid off, but my hours got cut and that caused me to make less money?

Answer: Section 2108 of the CARES Act – check with your local unemployment office to see what “short-time compensation” program exists in your state. Fed Gov’t will cover 50% of the start-up costs to those states that set up these programs, but you will need to check with your local unemployment location to see what they offer.

Question: What if I was a waiter/waitress and most of my income was from tips. Since my hours have been reduced, I have less time to wait tables. Can I get any assistance for ALL of my lost income?

Answer: Tips are considered part of compensation for unemployment benefits. But some employers underreport that tip income. The state, without a record of tips, would pay a smaller unemployment check — one based off of nontip income. Your state will usually determine the amount of your unemployment check based on the last year of wages.

Question: I have been on the phone all day and the offices are closed b/c of social distancing. How am I supposed to apply for unemployment benefits?

Answer: DO NOT GIVE UP! Try applying during off-peak hours online! High volume has crashed some state websites and clogged up phone systems, while some in-person locations have been closed for social distancing.

Question: How do I file a claim for unemployment in GA?

Answer: The rules are different in each state. Go to your State Dept of Labor website and follow the instructions on how to apply.
*Once it receives your application, the GDOL will send you some documents, including a Benefit Determination, stating your potential benefit amount and duration.
**REMEMBER, and this is VERY IMPORTANT! Once you file, you will probably need to continue to file weekly claims with your STATE (GDOL in GA) for each week for which you are claiming benefits.

Question: How much money will I get form unemployment?

Answer: FOR GEORGIA: Benefits are calculated by combining your wages from the two highest quarters in your base period (earliest 4 of the 5 complete calendar quarters before you filed your benefits claim), and dividing that number by 42.

Your weekly benefit amount is subject to a weekly minimum of $44 and a maximum of $330. Benefits are available for up to 20 weeks.

The CARES Act will add $600 per week for up to 4 months, and extend the benefits an additional 13 weeks.

Question: What if I got laid off, but I don’t know if my company will get the PPP or not…. What should I do in the meantime?

Answer: Apply for the expanded unemployment benefits.

Question: What if I cannot make my mortgage payment?

Answer: CARES Act prohibits rental evictions for 120 days on properties secured with a government-backed mortgage. That covers about half the market for multifamily properties, according to the National Multifamily Housing Council. Many states and cities have also halted evictions, BUT it is not universal!!! Contact your city government to ask about local moratoriums or check your state government website for information about statewide laws.

Question: What if I cannot make my car payment?

Answer: Talk to your lender by phone if possible. Many lenders are offering special forbearance programs to help borrowers through the next several months. If yours is not, there are still options available. Not doing anything or hiding your job loss from your lender is not a good strategy. Missing payments and potentially defaulting on your loan are mistakes that can haunt your credit for years after the crisis has passed.

Question: Do the extended unemployment benefits cover independent contractors that don’t pay unemployment insurance?

Answer: YES, it will cover those independent contractors.

Question: I work 2 jobs and lost one of them, can I file for unemployment?

Answer: You can file for unemployment any time you experience a loss of work. If you have two jobs and lose both of them, you can file a total loss of work claim. If you had two jobs and lose one or experienced reduced hours at either or both, you can file a partial loss of work claim. This will vary from state to state, and be aware that income from the second job may likely be used to offset your benefits. So every dollar you earn at job #2 reduces EI benefits (potentially by 50 cents)

Question: Am I eligible for unemployment if I also have income from investments?

Answer: In a nutshell, you can collect unemployment benefits if you have investment income. Investment income is passive income and not W2 or 1099 income. Therefore, you are technically not employed. The government does NOT penalize you for saving and investing your money wisely to generate investment income. In general, income that comes from sources other than an employer doesn’t affect benefits. Examples include capital gains, interest, dividends and rental income.

Question: What dates does is the PUA available for?

Answer: Retro Active back to the week of Jan 27, 2020, and benefits cannot be paid beyond Dec 31, 2020.

Question: What is the maximum wage that can be earned on a weekly basis to file a partial unemployment for an employee working less than full time (30 hours)?

Answer: The threshhold amount you are asking about may be $415/week.  This the weekly benefit for regular unemployement +$50.00 each week.

Pandemic Unemployement Assistance as part of the CARES Act does provide enhanced parital unemployment benefits to workers who have had their hours reduced due to the COVID-19.

The Georgia Department of Labor will determine eligiblity based on a number of factors including wages, hours, current partial income up to the past 15 months of work history.  Each person is evaluated for eligibility to both regular Unemployement Benefits as well as the Pandemin Unemployment Assistance.

The Georgia Department of Labor website (updated as of 4/12/20) is best resource for questions, and has information for both individuals and employers:

Question: Am I being unpatriotic if I use our $2400 to buy stock instead of buying some kind of consumer goods (shoes made in China, for example)?

Answer: Like many Americans, there may not be a need for a check but it is coming regardless. Unpatriotic may be a harsh word for doing what you feel is best with the money received.

Question: Will the stimulus checks to families occur automatically (based on their 2017 returns), or is there a website or something where we need to submit info?

Answer: The amount will be based on your most recent tax filings (either 2018 or 2019), and is not something that Americans need to opt into.

Question: Good morning Wes. How is income level being defined for the $1200 government payment? Does it include IRA distributions?

Answer: Your adjusted gross income will be used for 2019 if filed already, and 2018 if not. That would include distributions from an IRA or 401k.

Question: What if I did not get laid off, but my hours got cut and that caused me to make less money?

Answer: Section 2108 of the CARES Act – check with your local unemployment office to see what “short-time compensation” program exists in your state. Fed Gov’t will cover 50% of the start-up costs to those states that set up these programs, but you will need to check with your local unemployment location to see what they offer.

Question: What if was under the 2018/19 AGI income threshold, and I did get a Recovery Rebate check, and then my income actually went up in 2020, and I made more money which put me OVER income limit in 2020…. will I have to pay back the amount?

Answer: No, there will be no clawback, and you will get to keep it.

Question: What if I made too much in 2018/19 to qualify for the Recovery Rebate check? And now in 2020, I have been laid off and I will make much less. What assistance will I be eligible for?

Answer: Eligible for assistance in 2021 based on their 2020 income. Not eligible now. (With the largest ever spike in weekly unemployment claims ever at 3.3m between March 15th and March 21st 2020, there will be a lot of people in this same situation.)

Question: I am trying to help my elderly friend who has not filed taxes for a few years because she has such little income. Can she file 2019 taxes now to have an account, so the government can find her for the $1,200 which a single person will receive from the government do to issues with virus. She lives on very low social security and really needs the windfall. We have located all her documents (1099 from social security, tax bill, and one statement for a VERY small dividend) for 2019, but I can not find anything for 2018. Is there a way to find her 1099 and her other documents for 2018, OR will filing 2019 work?

Answer: Individuals who typically do not file a tax return will need to file a “”simple”” tax return for 2019 to receive an economic impact payment (low-income taxpayers, senior citizens, Social Security recipients, some veterans and individuals with disabilities who are otherwise not required to file a tax return).

I wouldn’t worry as much about the 2018 filing, as the 2019 filing will suffice. I would encourage you to continue to check as they will soon provide information instructing people in these groups on how to file a 2019 tax return.

Question: Can a publicly traded company use their Federal stimulus money (ex: Delta) as earnings to protect their stock value?

Answer: No they cannot.

Question: Is the Fed backstopping corporate bonds?

Answer: By purchasing corporate bonds in their quantitative easing program, they may be indirectly backstopping that part of the credit market.

Question: Wes, The CARES act includes a provision for tax-favored corona-virus related distributions from IRAs. Is there an opportunity for me and my wife to leverage this new law with regards to Roth Conversions?

Answer: The tax-favored provision related to IRA distributions is the elimination of the 10% early withdrawal penalty. Traditional IRA distributions are still taxed at your ordinary income rates. Even under normal circumstances, when you complete a Roth Conversion there is no 10% penalty levied, only the ordinary income tax.

However, there are some opportunities that may present during this time. A couple thoughts:

  1. If your income is substantially lower in 2020 (due to the coronavirus or otherwise) then a Roth conversion could make sense as you’d be paying a lower tax rate.
  2. The other opportunity that could exist with the decline in market value is converting an IRA that’s dropped in value and getting it immediately reinvested in a Roth IRA so that you can participate in the rebound within the Roth IRA. In both cases though, you’re still paying ordinary income tax rates on the conversion amount.


This information is provided to you as a resource for informational purposes only and should not be viewed as investment advice or recommendations.  This information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax, or investment advisor before making any investment/tax/estate/financial planning considerations or decisions.