Government financial stimulus during the coronavirus pandemic. What does it mean for you? (Updated April 6)
Article updated April 6
The federal government is moving to enact stimulus and sick time packages designed to help Americans as businesses take a massive financial hit from the coronavirus pandemic. But what does it mean? What financial help will you and your family get? The list below compiled by News 12's Walt Kane breaks it all down. This story will be updated as new financial aid measures are passed and approved.
WHAT'S IN THE STIMULUS?
DIRECT FINANCIAL AID
Will I get the money? 90 percent of American families will get a payment.
How much will I get? Individuals will get $1,200. Couples will get $2,400. There will be additional payments of $500 apiece for up to two children under 17. Individuals making over $75.000 a year, and couples making over $150,000 a year will get reduced amounts. Individuals earning $100,000 a year and couples earning $200,000 a year will not qualify for payments.
If we're over the income level as a couple, would we still get checks for the kids? No.
How does the government calculate my income? Your income is based on your Adjusted Gross Income from your tax return. If you filed your 2019 taxes this year, the IRS will calculate your income based on your 2019 tax return. If you have not, the IRS will calculate your income based on your 2018 tax return. If you have not filed since 2017, you will need to file, unless you were not required to file a tax return.
What if I was not required to file tax returns? The IRS says people who were not required to file tax returns because their income was too low will be automatically included.
When would my check arrive? Americans should start seeing checks around April 15th.
How will the money be sent to me? You will get paid by either check or direct deposit, however, you got your last federal income tax refund.
What if I’ve moved or changed my direct deposit info since then? You’ll need to file a change of address with the IRS.
Do I have to pay this money back? No.
Will this money be taxable? No.
I owe back taxes. If I meet the other criteria, will I still get a check? Yes.
I’m delinquent on a student loan. If I meet the other criteria, will I still get a check? Yes.
I owe back child support. If I meet the other criteria, will I still get a check? No. That’s one of the few cases where the check will be confiscated and used for the child.
I am on Social Security (SSI). If I meet the other criteria, will I still get a check? Yes.
I am on Social Security Disability (SSD). If I meet the other criteria, will I still get a check? Yes, as long as you are not listed as a dependent on someone else's return.
I am in the US on a visa. If I meet the other criteria, will I still get a check? No. Non-resident taxpayers are excluded.
My child is 17 but I claim them as a dependent. Will I get a $500 credit for them? No. Credits are for children under 17 only.
How about a college student? Do they qualify for a check? Most do not. They would have to be fully independent, and most are considered dependents.
How about an elderly parent I take care of? If you list them as a dependent, they will not get a check. If you do not list them as a dependent, they will.
If I cannot get a credit for my adult child or an elderly parent who is a dependent, will they get a payment for themselves? No. If someone is a dependent, they will not get their own payment. So someone over 17 who is a dependent will not receive payment for themselves or for the person responsible for them. I’m not sure why lawmakers drew up the law that way or if every lawmaker who voted on it even knew that’s what’s the law said.
My income is too high in 2018-2019 for me to qualify, but I'm out of work now. Is there anything I can do? Not right now. But technically, this stimulus is considered a 2020 tax credit that people are getting in advance. So If you don't get it now and your financial situation has changed, you might get it a year from now. I know that won't help you right now.
ENHANCED UNEMPLOYMENT BENEFITS
What happens if I’m laid off, terminated or furloughed from my job? The bill provides enhanced unemployment benefits. The benefits last four months, not three. And they are up to $600 a week higher than normal, allowing most workers to be able to recoup 100% of lost income.
How does that work? State unemployment typically covers 40 to 55% of your income, depending on where you file. You’ll continue to get that. Plus, you’ll get $600 a week from the federal government.
How do I file for enhanced unemployment? Just file a claim. If you're asked if it is COVID or non-COVID related, choose COVID to qualify for the federal benefits.
How do I know if I have a valid COVID-related unemployment claim? You have a valid claim if you lost your job or had your income reduced because you had COVID-19, or because a family member had COVID-19, or because your employer voluntarily closed or was ordered to close, or because your employer suffered a slowdown in business. In addition, you have a valid claim if your business illegally refused to close in defiance of a government order and you refuse to go to work for fear of catching COVID-19. However, you do not have a valid claim if your business is legally allowed to be open and you refuse to go to work.
What if my doctor advises me not to go to work? Can I stay home and file for unemployment then? No. But depending on the circumstances, you might be able to file for disability.
I’m self-employed and don’t normally get unemployment. Is there help for me? Yes. The legislation allows self-employed individuals such as subcontractors, freelancers and gig workers, to qualify for unemployment benefits to replace self-employment income they are losing due to economic problems caused by COVID-19.
I'm a freelancer/subcontractor/gig worker. How do I file for unemployment? Just file a claim as a regular worker would. If offered the choice between whether the claim is COVID or non-COVID related, pick COVID, because gig workers can't file unemployment claims for non-COVID related unemployment.
What if I was not laid off but my hours were reduced, or my salary was cut because of the economic conditions? In many cases, you can file for partial unemployment to temporarily compensate you for this loss of income.
What if I was laid off already and my unemployment ran out? Could I get an extra month now? Better than that. You can file for a new 13-week claim. The first claim would have been non-COVID related and the new one will be COVID related.
HELP FOR SMALL BUSINESS OWNERS
I have a? small business. is there help for me? Small business owners are eligible for $10,000 grants and low-interest loans. In many cases, the loans do not have to be repaid.
How do I apply for small business assistance? You can apply for several programs on the Small Business Administration website at https://www.sba.gov/funding-programs/loans/coronavirus-relief-options
What programs are there? The Paycheck Protection Program allows you to get a forgivable loan of up to $10 million if you don't fire employees or hire back employees you've fired. The Economic Injury Disaster Loan Program offers two options. You can get a grant of up to $10,000 that does not have to be repaid. Or you can apply for a loan of up to $2 million. The loan will have to be repaid, but it’ more flexible in how the money can be used.
HELP FOR HOMEOWNERS
I'm not able to pay my mortgage. Is help available? Yes. The stimulus package allows homeowners hurt by the COVID-19 crisis to postpone mortgage payments by up to 12 months.
How do I apply? Call your mortgage company and tell them you are unable to pay your mortgage because of financial problems caused by COVID-19. Tell them you are requesting a forbearance of up to 6 months under the CARES Act, with the option to extend by up to another 6 months.
Do I have to provide proof of financial hardship? Technically, the law says homeowners may be required to show proof. But Federal Housing Finance Agency Director Mark Calabria says "We’re operating on the honor system". He says homeowners merely have to ask their banks and the forbearance will be granted automatically. However, if too many borrowers abuse the lenient rules, it's possible the government could ask for proof later.
HELP FOR RENTERS
What if I rent instead of own? Can I skip paying my rent? No, there's no provision quite like that. But there is a six-month moratorium on evictions for any landlord who has a mortgage that is either backed or owned by Fannie Mae, Freddie Mac or any other federal mortgage agencies. Your landlord also cannot charge you late fees or penalties for missed payments.
HELP FOR STUDENT LOAN BORROWERS
Can I get help with my student loan? Yes. If you have a federal student loan, the federal government has already waived two months of payments and interest and is now waiving six months more. You can choose to keep paying in which case 100% of your payments will go toward principal with nothing going toward interest.
What if I'm trying to make consecutive on-time payments in order to get loan forgiveness or a lower interest rate? That cannot be held against you. The loan is just frozen.
What if my wages are being garnished because of student loan payments? Those must be suspended for the next six months too.
HELP FOR PEOPLE WITH RETIREMENT ACCOUNTS
What changes are there to retirement account rules? You will not be forced to take a required minimum distribution in 2020 for any IRA, 401(k) or other retirement savings plan. In other words, if you don't need to take that money no one will force you to sell any of those investments at a fraction of what they were worth a couple of months ago. You'll have at least a year to have them regain some value.
What if I need to take money out of my retirement account and I have not reached retirement age? On the other hand, if you do need to access retirement funds right now, the stimulus makes it legal for you to withdraw up to $100,000 without penalty. You will have to certify that the withdrawal is necessary due to economic stress caused by the coronavirus. You can also spread out the income on that withdrawal over 5 years for tax purposes.
Can I take out a loan against my 401(k) and repay myself? Yes. And you can now borrow up to $100,000, rather than the usual $50,000. You also have an extra year to repay any existing 401(k) loans.
I called to make an early withdrawal from my 401(k) and my employer is refusing. Isn't that illegal? Unfortunately, it is not. The stimulus plan makes those penalty-free distributions legal. It does not force your company's 401(k) plan sponsor to allow them. The sponsor gets to decide whether to allow early withdrawals and to set the criteria for them. I don’t know why lawmakers wrote the law that way or even whether all of them knew that’s what the law said when they were voting on it.
SICK TIME, PAID LEAVE AND OTHER BENEFITS
Am I guaranteed sick time? Under a law previously passed by Congress, most workers are guaranteed two weeks of paid time off if they are ill or quarantined due to COVID-19.
Will I get full pay? Payments are capped at $511/day. So unless you make more than $133,000 a year, you will get full pay.
Are all employers required to provide this sick time? No. Large employers with more than 500 employees are exempt. The assumption is that they should be providing at least two weeks of PTO anyway.
What if I need time off due to COVID-19 but I'm not personally sick? Under a law previously passed by Congress, most workers can get two weeks of paid leave if a family member is ill with COVID-19 or to care for children whose schools are closed.
Will I get full pay? No. In this case, payments are capped at two-thirds of your annual salary, with a maximum of $200 a day
Are all employers required to provide this paid leave? No. If you are a health care worker or emergency responder,your employer is exempt from this requirement. in addition, as with the guaranteed sick time, large employers with more than 500 employees are exempt.
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