The Coronavirus Stimulus Package: A Concise Outline Of What It Means For Your Finances
The $2 trillion Coronavirus stimulus package has been passed and it is the largest in US history. The Coronavirus has hit our nation hard. With thousands of cases on the books and the numbers rising, everyone is wondering what will be in store for their finances. From what we know, there is something in this package for everyone.
Here are the key provisions you need to know about the Coronavirus stimulus package
What is in the Coronavirus stimulus package for single taxpayer individuals?
- Single taxpayers with an adjusted gross income of $75,000 a year or less, are expected to receive $1,200.
- Every individual will be subject to a 5% deduction for every amount above the $75,000 threshold. So, if your income is $85,000, your payment will be lowered by $500 making your payment $700.
- If you are making $99,000 a year or more, you have exceeded the threshold and will not be eligible to receive a payment.
What is in the Coronavirus stimulus package for married couples?
- Married couples making a combined $150,000 per year or less, will receive $2,400.
- As mentioned above, payments will be phased out by a rate of 5% for any amount above the threshold. If you are making a combined income of $198,000 or more, you will not receive a payment.
- Depending on your income, an additional $500 will be given for each child under the age of 16.
- Single individuals who are making $109,000 or more will not be receiving this additional $500 per child benefit.
- Married couples who are making $208,000 or more will also be ineligible for the $500 per child benefit.
**If you have not filed a tax return yet for this year, they will look at your income level from your 2018 tax return**
Other important information about these stimulus checks:
- This is a one time payment although there could be additional bills proposed down the line.
- You must have a valid Social Security number. An exception will be made if you are a military member.
- There is currently no relief for those that are ineligible for a payment but may become eligible due to a pay cut during this time. You may be able to file for unemployment though.
- The IRS will automatically transfer the money to your bank account on file via direct deposit. They will go off of your most recent income-tax figures that they already have.
- Most payments will be received within the next three weeks but that is not set in stone. Some say payments may not go out until May.
- A few weeks after your payment has been sent out, a notice will come in the mail informing you where the payment was deposited and in what format the deposit was made. If you can’t locate your payment, get in touch with the I.R.S.
- If you have not filed your tax return for 2018, do so immediately. According to the IRS website, those without filings on record could experience issues with receiving a check.
- Those that are getting Social Security and/or disability benefits will also receive a check.
- Those who are unemployed as well as veterans can expect to get a check too.
- Your stimulus check WILL NOT be garnished if you are currently being garnished on your income tax refunds for defaulting on a student loan.
Unemployment Benefits in the Coronavirus stimulus package
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There is some good news within the Coronavirus stimulus package with regards to unemployment benefits for those that have been temporarily furloughed or laid off.
Here is what you need to know:
- In addition to state level unemployment benefits, the average eligible worker will receive $600 per week in unemployment benefits for up to four months. As of right now, there is not an exact date for when the money will be sent out.
- With this bill, all eligible workers will be given an additional 13 weeks of benefits added onto whatever their state currently provides. The total amount will not exceed 39 weeks, and some states will be shorter.
- Each state will determine the amount of money you will receive. They will also have the option to issue one lump sum payment or send the extra money separately. Either way, all the money has to be received within the same week.
- Unlike current unemployment benefits, gig workers or any other self employed worker will be eligible for benefits. The benefit amount you will receive will be determined by what your income has been up to this point, using this formula.
Additional unemployment benefit details:
If your child’s school or daycare is shut down and you rely on that for childcare, you will be eligible for benefits.
- There currently are not details on how these additional benefits will affect those that have had their hours cut but do not qualify as fully unemployed. We also don’t know if people in this situation will be eligible for standard unemployment benefits.
- If you are a part-time worker and you have lost your job and your state does not cover part-time workers, you will be eligible for benefits. The amount of money you will receive and for how long, will be determined by your state. The $600 weekly benefit will also be given to you.
People who were about to start a new job and are unable to work because of this outbreak will be eligible for benefits.
You will also be covered if you were currently laid off from a new job.
Those that will NOT be eligible for benefits include: Those working from home, those receiving sick or paid family leave or those that are new entrants into the workforce.
Each state is different but most states provide 26 weeks of benefits. Some states provide less while some states work with a sliding scale as it relates to unemployment levels.
If you have exhausted your unemployment benefits, you can reapply. The amount you will get and for how long, depends on your state.
- The $600 benefit may disqualify you for certain Welfare programs. Exceptions would be for CHIP (the Children’s Health Insurance Program) and Medicaid.
Unemployment benefits for those who have tested positive or are subject to quarantine:
You are covered If you have tested positive for Coronavirus or are caring for a family member who has tested positive. This applies regardless of your employment status.
Those who are self-quarantined will be covered.
If a quarantine has been imposed on you and you are unable to work, you will be eligible for benefits.
- If you had to quit your job as a direct result of Coronavirus, you MAY be eligible for benefits. Some situations that would be covered include:
A health care provider ordered you to self quarantine or you’re the primary caregiver and your child’s day care has been closed.
** This provision is not for people who quit or want to quit because they are fearful of contracting the virus**
- If your employer shut down your workplace because of the Coronavirus, you will be eligible for benefits.
Student loan benefits in the Coronavirus stimulus package:
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- Federal student loan borrowers will be able to forgo payments until October. Any accrued interest during this time will be waived.
- If you have unspent money from a Pell Grant or student loan, you can keep that money.
- If you had to leave school because of the Coronavirus, this will not affect your eligibility for future Pell Grants.
- Colleges and universities will be allowed to pay students for work-study programs even if they are unable to work.
Protections for housing and mortgages in the Coronavirus stimulus package
- Anyone who cannot make their mortgage payment on any federally backed mortgage loan, will be granted a forbearance of up to 60 days. You also have the option to extend this for 30 days across four different periods.
- All penalties, fees or additional interest will not be charged on delayed payments.
- For those who have multifamily federal mortgage loans, a 30-day forbearance will be granted and you will be allowed to add up to two 30-day extensions.
- If you have one of these federally backed mortgage loans and you have tenants, you CANNOT evict them for failure to pay rent for a 120-day period.
- You also cannot charge tenants any fees or penalties for failing to pay rent.
The Coronavirus stimulus package will help all Americans
As outlined above, there is a lot in this Coronavirus stimulus package for the American people. This is all the current information that is available and more will trickle down over the coming days and weeks. It is also possible that some of the provisions we outlined will be altered as the final details work themselves out.