What families and caregivers need to know about the CARES Act
Legal pay is necessary for employees to receive stimulus payments or unemployment benefits
In an effort to help individuals and businesses cope with the effects of the COVID-19 virus, Congress passed the Coronavirus Aid, Relief, and Economic Security Act — or CARES Act on March 27, 2020. While the details of the law expire at the end of 2020, the newly passed Continuing Appropriations Act 2021 provides some of the same benefits contained in the CARES Act.
“The most important aspects of these laws for families and caregivers to be aware of are the expansion of unemployment benefits and the stimulus payments that are included in the law,” says Eva MacCleery, Director of Care.com HomePay. “Both of these financial safety nets can be very beneficial to those that need it, but caregivers need to be paid on the books in order to receive them.”
Here are the details of each of these benefits and what you and your caregivers need to know about them.
Expanded unemployment insurance benefits
If your employee was let go from their job due to COVID-19 concerns, they may qualify for expanded unemployment benefits through the state. Specifically, the CARES Act allowed employees to collect $600 per week, on top of the financial assistance the state provides, for up to four months. This has now been reduced to $300 per week through March 14, 2021 under the Continuing Appropriations Act as the CARES Act has expired.
Additionally, the Continuing Appropriations Act extends the maximum amount of time your nanny or caregiver can receive unemployment benefits to 50 weeks. The current maximum varies by state, but most states already allow for approximately 26 weeks of unemployment benefits. If your nanny or caregiver is being paid on the books, they should be able to access these benefits if they need them.
Stimulus payments for individuals
To help workers make ends meet, the CARES Act also provided a one-time payment of up to $1,200 ($2,400 for married couples filing jointly), plus an additional $500 for each child. You may have heard this referred to as a “stimulus check” or an “economic impact payment.”
The Continuing Appropriations Act gives another direct payment of $600 for individuals making up to $75,000 per year and $1,200 for couples making up to $150,000 per year. Additionally, families are eligible to receive another $600 for every child dependent they have.
It's important to note that if your caregiver was not paid on the books, they will not have received a W-2 to file their personal income tax return and will be ineligible to receive this financial assistance.
If you had a nanny, senior caregiver or other household employee working for you this year and did not pay them on the books, reach out to HomePay for help. We’ll get you caught up on your household employment taxes and issue your caregiver a 2020 W-2 so they can file their taxes. We make this process very efficient for families and you’ll be set up to continue paying your caregiver legally for 2021 and beyond.