The $2 trillion federal stimulus package is intended to help American families and businesses, both large and small, as they struggle to survive economically during the COVID-19 pandemic that has already killed tens of thousands around the world.
The legislation is the largest economic rescue in modern American history and will impact millions of people across the nation who have lost their jobs, been furloughed or had their businesses shuttered and worry how they will pay their rent, mortgages, and loans.
In addition to the programs that will be impacted, including unemployment insurance, mortgages and student loans, the stimulus will also deliver checks to millions of citizens. Businesses too will have grants and loans made available to them. Some of the packages’ highlights include:
Stimulus checks: Individuals who earned less than $75,000 last year, or in 2018, if they have not yet filed their 2019 tax return, can expect to receive $1,200. A couple, filing jointly, can receive $2,400, if their adjusted income doesn’t exceed $150,000.
Those receiving Social Security or disability benefits, but earn too little to file an income tax return, can also receive a check based on the IRS forms SSA-1099 and RRB-1099, according to the law.
Additionally, if your income exceeded the cap this year, but is likely to drop in 2020 due to the health crisis and its impact on the economy, you can qualify for the stimulus check in 2021.
Unemployment insurance: The program has undergone significant expansion and recipients can now receive income for 39 weeks, up from 26 weeks. In addition, the stimulus package supplements state benefits with an additional $600 per week. People working in the so-called gig economy, those who are self-employed, and independent contractors can also qualify, as can those who are furloughed, but not laid off. The 7-day waiting period for payments has been waived, under the stimulus package.
Paid sick leave: Employees, whether full time or part time, are eligible to receive 80 hours of their pay, up to $511 per day. Those who are unable to work or tele-work due to being quarantined or undergoing treatment for the coronavirus, those who suspect they have it or those who have been directed to self-quarantine at home, are also eligible.
If you are providing home care to someone with COVID-19 or someone who is suspected to have the illness, or have a child whose school or daycare is closed due to the virus, you are eligible for two-thirds of your pay, up to $200 per day.
Mortgage and rent support: Those with a federally backed mortgage (Fannie Mae or Freddie Mac), can request forbearance for up to six months. Keep in mind, interest continues to accrue. No one with a federally backed loan can be evicted or foreclosed upon during those months.
Student loan relief: Between April and Sept. 30, no interest will accrue on federal loans and no payments are required. For borrowers in a loan rehabilitation program, your payments are also suspended during this period.
Retirement: Individuals, regardless of age, who are affected by the global health crisis can withdrawal up to $100,000 from their retirement accounts without incurring the 10% penalty. In addition, required minimum distributions (RMD) from traditional IRAs, SEPs and 401(k)s have been waived for 2020.
If you have any questions about the Federal Stimulus Program and how it affects you, please contact your tax advisor at Diamond & Associates, PC CPAs. We are here to help!