Frequently Asked Questions (FAQ) regarding COVID-19 Relief Legislation

The president recently signed the Coronavirus Aid, Relief and Economic Security (CARES) Act into law. This roughly $2 trillion relief package will provide immediate, direct assistance to South Dakota families and businesses during these unprecedented times.

We’ve put together some Frequently Asked Questions and are updating this page regularly as new information becomes available. In the coming days, we hope to provide additional information for lenders and other, more specific details regarding the loan programs and rebates.

In addition, various Senate committees and federal agencies have put together additional information on the implementation of the CARES Act:

Department of Labor

Small Business Administration



Information for Families



Information for Families – Rebates, Student Loans, Mortgages

Who will receive money under the CARES Act?

  • Every adult who earns less than $75,000 annually will receive $1200 from the U.S. Treasury, plus $500 per child age 16 and under. Married couples filing jointly will receive $2400 if their combined income is less than $150,000. The direct payment will be reduced by $5 for every $100 in income above these thresholds until it hits zero. Income amounts will be calculated based on your most recent tax filings (2018 or 2019).

How will money be distributed and when?

  • Following the Senate passage of the CARES Act on March 25, 2020, The Treasury Department said it will begin making direct deposits to taxpayers who have previously received refunds using direct deposit in approximately three weeks. Paper checks will be mailed for those without direct deposit information on file with the IRS.

What if my income was above the threshold in 2019, but I’ve lost my job due to COVID-19? Can I still get a rebate check?

  • If your income in 2019 was in the phase-out range you would still receive a partial rebate based on your 2019 tax return. However, the rebate is actually an advance on a tax credit that you may claim on your 2020 tax return. If your income is lower in 2020 than in 2019, any additional credit you are eligible for will be refunded or reduce your tax liability when you file your 2020 tax return next year.

Is the rebate taxable or will I have to pay back any amount if the rebate based on my 2019 return is larger than what it would be if based on my 2020 tax year return?

  • No, the rebate is treated like other refundable tax credits, such as the child tax credit and earned income tax credit, and not considered income. Moreover, if the credit amount you qualify for based on 2020 income is less than what you qualify for based on your 2019 tax return, it does not have to be paid back.

Are individuals with little to no income or those on means-tested federal benefits, such as SSI, eligible for a recovery rebate?

  • Yes, there is no qualifying income requirement. Even individuals with $0 of income are eligible for a rebate so long as they are not the dependent of another taxpayer and have a work-eligible SSN.

Are seniors whose only income is from Social Security or a veteran whose only income is a veterans’ disability payment eligible?

  • Yes, as long as they are not the dependent of another taxpayer. Additionally, on April 1, 2020, the Department of Treasury announced that Social Security beneficiaries who are not typically required to file tax returns will not need to file an abbreviated tax return to receive an Economic Impact Payment. Instead, payments will be automatically deposited into their bank accounts or mailed in the form of a paper check. 

Are college students eligible for a recovery rebate?

  • Only if they are not considered a dependent of their parents. Generally, a full-time college student under the age of 24 is considered a dependent if their parent(s) provide more than half of their support.

What should I do if I did not file a tax return for 2019 or 2018?

  • The best way to make sure you receive a recovery rebate is to file a 2019 tax return if you have not already done so. This could be accomplished for free online from home using the IRS Free file program ( The bill also instructs the IRS to engage in a public campaign to alert all individuals of their eligibility for the rebate and how to receive it if they have not filed either a 2019 or 2018 tax return.

If I have a past due debt to a federal or state agency, or owe back taxes, will my rebate be reduced?

  • No, the bill turns off nearly all administrative offsets that ordinarily may reduce tax refunds for individuals who have past tax debts, or who are behind on other payments to federal or state governments, including student loan payments. The only administrative offset that will be enforced applies to those who have past due child support payments that the states have reported to the Treasury Department.

I have student loan debt. What are the details of the loan deferment provisions and how do I defer them?

  • Under the CARES Act, the Department of Education will automatically defer payments on federally-owned student loans through September 30, 2020. This applies to both principal and interest with no penalty. While this is automatic, individuals should check with individual loan servicers to make certain payments have been suspended.

Are private student loans eligible for this benefit?

  • No. The Department of Education does not have legal authority over private student loans, so they are not covered by the president’s forbearance announcement.

What other types of relief are available for students?

  • There are a number of other provisions of the CARES Act that will help students during the COVID-19 pandemic. For example, Pell Grant students are not required to repay money to the federal government if their terms are disrupted by the coronavirus emergency.

Can homeowners defer payments on their mortgage?

  • Homeowners with federally-backed mortgages, regardless of their delinquency status, are eligible for up to 180 days of forbearance, meaning they won’t have to make payments during this time. During the time of forbearance, mortgage servicers are not to levy fees, penalties or interest that would not normally accrue if borrowers paid their monthly obligations.

Information for Small Businesses

What is the Paycheck Protection Program?

  • The Paycheck Protection Program is a new program that will provide $350 billion to support loans for:
    • Small employers with 500 employees or fewer, as well as those that meet the current Small Business Administration (SBA) size standards;
    • Self-employed individuals and “gig economy” individuals; and
    • Certain nonprofits, including 501(c)(3) organizations and 501(c)(19) veteran organizations, and tribal business concerns with under 500 employees.

The size of the loans could be up to $10 million.

What can the loan be used for?

  • The loan can be used for payroll costs such as salary and other compensation for employees (up to an annual rate of pay of $100,000 per employee); employee group health care benefits, including insurance premiums; and retirement contributions from February 15, 2020, to June 30, 2020. The loans can also be used to make payments on interest on mortgages, rent, utilities and interest on any other debt obligations that were incurred before February 15, 2020.

Covered payroll costs include:

  • salary, wages, and payment of cash tips (up to an annual rate of pay of $100,000);
  • employee group health care benefits, including insurance premiums; retirement contributions; and
  • covered leave.

Loans are available through existing SBA-certified lenders, including banks, credit unions and other financial institutions. The legislation also provides an expedited mechanism for new lenders to become certified to participate in the SBA 7(a) program.

What about sole proprietorships or business owners who don’t take a “salary”?

  • Certain sole-proprietors, independent contractors, and other self-employed individuals are also eligible for loans. Details of self-employed individuals are still being worked out. In the meantime, if you have questions, contact the SBA at their Sioux Falls office (605) 330-4243.

What if I applied for a SBA loan and was previously denied?

  • Many of the rules and regulations regarding SBA loan eligibility have changed since the enactment of the CARES Act. Those who have previously been denied for a loan may now be eligible. Local SBA employees are working to reach out to previously-denied applications, but you can also contact SBA proactively. 

State Resources Available:

(information courtesy the Government’s Office of Economic Development) 

The State of South Dakota has approved SB192 to create a reallocated $10.5 million state sub-fund from the Governor’s Office of Economic Development. This new program can provide up to $75,000 per business, for helping small businesses affected by COVID-19. The interest rate is 0% and has no fees charged. The loan is effective immediately and in place until July 1, 2021. Businesses of no more than 250 full-time equivalent employees are eligible to apply for this loan. Contact your Business Development Representative for further details. For COVID-19 information, please refer to the following link:

Information for Businesses with more than 500 Employees

My businesses has more than 500 employees. Am I eligible for assistance?

Yes. In addition to the $350 billion allotted for small businesses, $454 billion has been reserved to provide loans to larger businesses, as well as state and local governments. This program is being administered through the Department of Treasury’s Exchange Stabilization Fund. Details are forthcoming.

Information for Tribes

Are tribes eligible for relief?

  • Yes. The CARES Act includes approximately $11 billion specifically for tribal governments, including $8 billion for tribal governments who certify that the funds will be used to respond to the COVID-19 pandemic. Additionally, certain tribal businesses are eligible for the $350 billion SBA loan guarantee program. Tribes and their businesses, including gaming enterprises, are also eligible for the $454 billion loan guarantee program.

How does a tribal government access their portion of the $8 billion set aside for COVID-19 response?

  • Within 30 days of the CARES Act being signed into law, the Secretary of the Treasury will be developing an application process and guidelines for how tribes can receive aid.

Information on Changes to Retirement Benefits

Am I required to take Required Minimum Distributions (RMD) for 2020?

  • The CARES Act suspends required minimum distributions from certain defined contribution plans and IRAs for 2020.  This will allow retirees to avoid having to withdraw funds from these accounts during the economic slowdown.

What other retirement-related changes are in the legislation?

  • The CARES Act waives the 10 percent early-withdrawal penalty for amounts up to $100,000 from certain retirement accounts if the withdrawals are used for reasons related to the COVID-19 pandemic. It also provides more flexibility to allow savers to take loans from their IRAs if the funds are used to respond to the COVID-19 pandemic.
  • Under these provisions, a coronavirus-related distribution is one made to an individual:
    • who is diagnosed with COVID-19,
    • whose spouse or dependent is diagnosed with COVID-19, or
    • who experiences adverse financial consequences as a result of being quarantined, furloughed, laid off, having work hours reduced, being unable to work due to lack of child care due to COVID-19, closing or reducing hours of a business owned or operated by the individual due to COVID-19, among other things.