After two weeks of partisan efforts, the Democrat-controlled Congress and Republican-controlled Senate agreed on a $2 Trillion relief package for American workers, small businesses and other impacted industries like the airlines industry.

Despite an estimated price tag of more than $2 Trillion, it is expected that additional aid will be required in order to keep this prolonged economic shutdown from causing long-term damage to the US economy.  As a reminder, the US economy generates $2 Trillion in Gross Domestic Product each month. 

Relief for People

An estimated 93% of all Americans will receive $1,200 deposited into their accounts by the middle of April.  For couples, this means $2,400.  For each child under 17 who you claim on your taxes, you will get another $500.  According to Congressman Chuck Shumer’s (D-NY) office, seniors and others who do not file tax returns due to a disability will be able to get a check as well although there was no guidance as of March 30th.  Visit for updates.


Unemployment benefits are $600 per week higher and 13 weeks longer than normal through the end of June.

If you have a retirement account like a 401k, the maximum that you can borrow is up $50,000 to $100,000.  If you don’t believe you will be able to pay the loan back to your retirement account over the next five years, hardship withdrawals will not be subject to a 10% early withdrawal as is normally the case.  To withdraw the funds, you will need to prove that your withdrawal is due to the economic fallout created by COVID-19.   As monies from a tax-exempt retirement account are usually taxed as income in the year withdrawn, taxes due on COVID-19 related withdrawals will be paid over three years instead one as is normally the case.  If you already had an outstanding loan, you can defer those payments for an additional year while extending the remaining term of that loan by one year.

Retirees do not have to take their annual required minimum distribution this year if they do not want to.

People will student debt, have their payments suspended until the end of September.  Employer student loan repayment programs will exclude $5,250 from your income.

There are also special protections for workers who contract COVID-19 and cannot work as a result.

For those who can give charitably during these times, a special $300 deduction from gross income is part of the legislation.

Separate to this Federal relief, California is offering special assistance to those who are temporarily unemployed or experiencing reduced hours at work.  Assistance includes protections like preventing evictions, getting banks to defer mortgage payments and the prevention of service disconnections by utility companies.  For more information, visit

Relief for 1099 Employees and Small Businesses

If you are a 1099 worker, sole proprietorship or small business with fewer than 500 employees, the CARES Act has something to help you.  For a relief loan, go to and apply.

The maximum loan will be for 2.5 times your payroll for the previous 12 months and for no more than $10 million in total.  This relief loan which can be forgiven is for 10 years at a rate of 3.75% with no origination fees.  While these loans will be administered by your local bank, all relief loans are started at  The application process is all electronic so be prepared to upload a lot of PDF files.

The part of the loan that will be forgiven occurs after you have provided full documentation to your local bank that proves the expenditures to be eligible for forgiveness.  Forgivable expenses include rent/mortgage and utilities for two months and compensation to all employees for four months.  Reimbursable salaries are capped at $100,000 per year.  If you pay someone more, Uncle Sam will not reimburse you.  This is also not a chance to give everyone raises – it is based on your previous tax records.  Salaries covered are from February 15th through June 30th.

The CARES Act wants workers rehired and will reimburse businesses for it.  If the rehired employee has received some other federal assistance during their unemployed period, that employee will have to pay those monies back as part of their 2020 taxes.

Expect additional aid to be coming in the months ahead as the economic wreckage is uncovered and evaluated.

Haddon Libby is the Founder and Managing Partner of Winslow Drake Investment Management.  Less than 5% of all firms perform to the Fiduciary Standard of Care as we do.  To find out the difference as well as why we won Small Business of the Year by the Cathedral City Chamber of Commerce, email