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CARES Act Updates | December 2020

Andrew Omalley Updated: June 27, 2023 • 5 min read
100$ bill prepared for CARES act update

CARES Act Updates | December 2020

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law by President Donald Trump in March 2020 and it is a $2.2 trillion economic stimulus bill. The COVID-19 pandemic has caused massive damage to businesses all across the United States, with countless people still out of work or restricted as a result of these issues.

The initial CARES Act payments saw $300 billion worth of one-time cash payments going towards individual Americans. This saw most single adults getting $1,200 and those with children getting a higher amount. Significant funds also went towards CARES Act unemployment benefits, the Paycheck Protection Program, aid to major corporations and money for both local and state governments.

The overall goal of the CARES Act was to minimize the economic impact of the large-scale shutdowns caused by the pandemic. It is helping businesses to survive, to keep playing workers, provide CARES Act unemployment benefits for those out of work and to ensure that people have enough money to keep food on the table. This article looks at some of the latest updates to the CARES Act since it was signed into law in March.

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Helping the country

There were four main groups that received aid through the CARES Act. Households were able to avail of CARES Act unemployment assistance and recovery rebates. This included decreasing the individual's tax liability. There were also individual unemployment benefits given to people, with those who have dependents getting more.

CARES Act small businesses received $377 billion in aid through the form of grants and loans. This will help them ride out the closures or limited opening hours due to the pandemic. The Payment Protection Program provided the loans, while the Emergency Economic Injury Disaster Loan Program gave emergency grants.

The third group to get help were business and the markets. Of the $500 billion or so given out, about $46 billion went towards industries that were especially hit hard by the pandemic. The majority of the funds went towards making sure there was market liquidity to avoid an economic credit crisis.

Finally, the aid to state and local governments was about $330 billion. This went towards public health initiatives and hospitals, airports, transit agencies, educational programs, and just all-around funding.

In all, there will be an estimated loss of output of almost $1 trillion in 2022 in the United States, with the CARES Act not making up for it. However, the goal is to close the gap, and hopefully by the middle of 2021, things will ramp up again and the economy will start to recover. The positive news about vaccines has already raised hopes of a successful exit for people, businesses, and governments.

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Time running out

If there is no further stimulus bill, the current provisions of the CARES Act will expire on December 31, 2020. Some of the provisions already expired, such as the Federal Pandemic Unemployment compensation plan that was providing extra unemployment insurance of $600 each week.

However, the bulk of the previous are going to expire if nothing is done by the end of the month. This comes at a time when COVID-19 cases are rising significantly across the United States and there are extensive calls for another round of relief.


There are numerous provisions for individuals that will be expiring at the end of 2020. A lot of the unemployment insurance provisions will longer be active, such as the Pandemic Unemployment Assistance, unemployment benefits for those who work in the gig economy, and the extension of benefits for another 13 weeks.

There will also be the reintroduction of a one week waiting period when you are looking to get unemployment compensation. Certain states have waived this waiting period temporarily.

Another significant provision that will expire for individuals will be the 10% penalty on early withdrawals of retirement account distributions that go up to $100,000. There will also be a reintroduction of the required minimum distribution rules next year.

Qualified early distributions will have to be paid back by taxpayers over the next couple of years. Finally, the $300 above-the-line charitable deduction from gross income in 2020 will also expire.


As well as the provisions for individuals, many of the key aids for CARES Act small businesses and larger corporations aid look like they will be coming to an end also by the close of the year. This will make it tougher for owners to keep on employees during a time when more COVID-19 shutdowns are looming. Some of the provisions that will be expiring for business include:

The Employee Retention Tax Credit gives a refundable payroll tax credit of as much as 50% of wages up to $10,000 to certain employers and it is on the expiry list. The goal of this provision was to have people still on payroll in the midst of the pandemic despite the downturn.

The limitation on loosened net interest tax deduction will also be gone, as well as the delayed employer-side Social Security payroll tax payments. These delayed payments will need to be repaid over the next couple of years, with half due by the end of 2021.

There will be no more net operating loss (NOL) carrybacks for companies that have losses in recent years. There will also be a reinstatement of the limit of 80% on NOL deductions. Finally, a lot of the business taxes that were suspended, such as the alcohol excise on alcohol that was used for the production of hand sanitizer and aviation excise taxes will also be coming back into play.

Other expirations

There are also some other random reliefs that will be ending by the end of the year. These include the likes of support to obtain pandemic-related medical equipment, relief for community banks, and housing protections.

Certain non-CARES Act measures will be gone in addition by the close of 2020. These include the White House's deferred employee-side payroll taxes for those companies that opted in. Works will need to repay deferred payroll tax in the first three months of 2021, which will mean a lower net income for them during this period.

Can eligible citizens still avail of the CARES Act?

Despite these expiring provisions, there is still time for people to avail of certain provisions before they run out at the end of December. The rules can vary from state to state in certain cases, so you should make sure that you are fully aware of what provisions are currently available to you. There is the possibility of an extension to the CARES Act, but nothing has been confirmed at the time of writing.

The main types of CARES Act unemployment benefits are set to expire if nothing is done by the end of the year. If this happens, then over 13 million people could lose out on their CARES Act unemployment benefits.

Andrew is a freelance writer who has been crafting valuable pieces of content relating to personal finance for more than five years. Previously, he studied Economics & Finance at university and he has professional qualifications relating to financial advice.