Everything that You Need to Know About the Federal Stimulus Package
- This article is for Individuals and Families. Keep reading if this applies to you.
- If you are looking for Small Business Federal Stimulus Information it can be found here.
Among the many relief efforts included in the COVID-19 Stimulus bill are such benefits as a one-time stimulus payment, amended unemployment benefits, loan and rent waivers as well as paid sick and family leave. Due to the complexity of the bill’s many provisions, further explanation of the benefits you can expect is sure to be helpful. Let’s take a closer look:
Latest Update: December 31, 2020
What’s in the New COVID-19 Stimulus Package? (Second Stimulus)
After months of waiting and negotiating, Congress reached an agreement and passed a new Covid stimulus package.
Individuals and businesses who have been economically impacted by the coronavirus pandemic will finally receive more federal relief, months after the first bill was passed.
The new Covid stimulus package will provide more than $900 billion to aid the American healthcare system and the economy, which have both suffered due to the pandemic.
Eligible individuals will receive another direct cash payment, and benefits have been added for the unemployed. Small businesses will receive another opportunity to apply for loans to aid payroll and offset revenue losses from the pandemic.
Here’s everything you need to know about the new Covid stimulus package approved by Congress, plus how to get your Covid stimulus money.
New Covid Stimulus Package Features
The new stimulus package covers a wide range of aid for individuals and industries impacted by the pandemic. Most notably, individuals will be eligible for stimulus checks, and small businesses will have access to more Payroll Protection Program loans.
Stimulus Checks for Individuals
Like the CARES Act, which was passed in March, the new Covid stimulus package will provide stimulus checks for qualified individuals.
After Congress approved $1,200 payments for the first stimulus package in the spring, this new deal will feature $600 checks per qualified individual.
President Donald Trump said he might not sign the new stimulus package into law on if individual payments are not increased to $2,000, and that’s still up for debate. But under the current agreement, the checks will be for $600 per individual.
Individuals who grossed more than $99,000 in income in 2019 will not be eligible for any stimulus money. People who made less than that but more than $75,000 will start to be phased out of full payments.
Any individual who made less than $75,000 and filed tax returns for 2019 will be automatically eligible. That threshold is doubled to $150,000 for couples.
Qualified families would also be eligible to receive a $600 payment per child, which is $100 higher than the $500 paid per child in the first stimulus package.
Undocumented immigrants without Social Security numbers are not eligible to receive a stimulus check. However, spouses and children with Social Security numbers can qualify.
In the new Covid stimulus package, unemployed individuals will receive a $300 federal payment per week on top of their state-provided unemployment benefits. This deal is set to run from the end of December through March 14.
Under the March’s CARES Act, unemployed individuals received $600 per week in federal payments, though those benefits expired in July.
The new Covid stimulus package will also extend two other unemployment benefits. The Pandemic Unemployment Assistance Program adds benefits for freelancers, independent contractors, and the self-employed. The Pandemic Emergency Unemployment Compensation Program extends state benefits for 13 weeks if that aid has been used.
Small Business Aid
The new Covid stimulus package will bring back the Paycheck Protection Program, where small businesses can apply for forgivable loans if those businesses keep workers on the payroll.
These new PPP loans would be limited to companies with less than 300 people, and each business must show drops of at least 25% of revenue in the first, second, and third quarters of 2020.
The new bill allocates $25 billion in rental assistance to individuals who have been impacted during the pandemic. Eviction protection will also be extended until Jan. 31.
Vaccine and Healthcare Funding
This stimulus package will provide $20 billion for vaccine purchases, plus $8 billion more for distribution, so the coronavirus vaccines can be made available without charge.
The new stimulus package also allocates money to aid several other industries and institutions.
The bill will provide $82 million in aid to K-12 schools and colleges. Another $10 billion will be granted to child care providers impacted by the pandemic.
Theaters and concert venues that have lost more than 25% of revenue during the pandemic will be eligible to receive part of a $15 billion grant program. This money will help offset the costs of payroll, rent and more.
First preference will be given to venues that have suffered more than 90% revenue loss this year. After a 14-day period, other venues that have taken smaller losses will be eligible to apply for assistance.
Do I Qualify for the New Covid Stimulus Package?
Any individual who made less than $75,000 in gross income in 2019 will be edible for the stimulus payment. Couples who combine to gross less than $150,000 will qualify for a $1,200 payment.
Those individuals who made more than $75,000 but less than $99,000 in gross income may be eligible for some payment, but it’s unclear what the exact amount will be.
Individuals who grossed more than $99,000 in 2019 will not be eligible for a stimulus check.
When Will I Get my Stimulus Money?
The process will follow the original CARES Act in terms of how to get your stimulus money.
Qualified individuals who paid taxes in 2019 and have a linked bank account will have the check delivered via direct deposit. Checks can also be mailed for those without bank accounts on file with the IRS.
Treasury Secretary Steven Mnuchin said if President Donald Trump signs the new stimulus package into law this week, payments could be made as early as first week of 2021.
The new Covid stimulus package will provide some needed relief for individuals and small businesses impacted by the pandemic.
Qualified taxpayers will receive another stimulus check for $600 to help boost the economy. Unemployed individuals will receive more federal aid, along with more assistance from support of state unemployment agencies.
Small businesses that have had revenue impacted by the pandemic will be able to apply for another round of PPP loans meant to help maintain payroll.
The second Covid stimulus package might not be the final bill passed by Congress to help the country get through the pandemic. But for now, it will deliver some needed aid to those impacted the most.
Details from the First Covid-19 Stimulus Package in April 2020
The $1200 Check
The stimulus check is the most commonly discussed out of all of the new relief efforts and is also perhaps one of the most misunderstood. The stimulus check comprises a one-time payment, sent in the form of a check to eligible US citizens. According to the bill, a qualified recipient is any legal resident, who is not being claimed as a dependent and meets a stipulated income level.
The payments will be issued according to the data on each person’s IRS tax filing for 2019, or 2018 if no filing in 2020 has taken place yet. The stimulus payment is means-based, and, according to terms of the bill, the following are ineligible for this payment:
- Individuals with a reported adjusted gross income (AGI) greater than $99,000;
- Married couples with an AGI greater than $198,000; and
- Single parents with dependents who filed as heads of household with an AGI of more than $198,000.
- College students or young adults who may have filed income taxes in 2019, but are still reported as dependents in 2019 and received more than half of their income from their parents.
Americans who do meet the criteria can expect to receive a payment according to the following schedule:
- Individual taxpayers: $1,200;
- Married couples who filed jointly in 2019: $2,400
- For each child under the age of 17, families will receive an additional $500.
However, take note that in cases where individuals make between $79,000 and $99,000 they will receive less than the full $1,200. Also, in cases where there are outstanding child support payments, the government may still garnish the stimulus check.
Many US residents do not fall into the categories set out above, but the bill does take other situations into account.
- Individuals who receive retirement or disability benefits from Social Security or Railroad Retirement but are not required to file returns due to insufficient income the IRS will base payment on 2019 SSA-1099 and RRB-1099 which should have been filed.
- If you receive Supplemental Security Income, you will not be required to file any extra forms. The IRS will issue your payment.
- If you have not made sufficient income to file in previous years, $12,200 in 2019, or $24,400 for married couples filing jointly, you can still receive a stimulus payment by filing here: Non-Filers Enter Payment Info Here.
- For those who may not be eligible based on their 2019 return, but who are suffering substantial financial loses in 2020 this payment may be considered akin to an early tax credit for 2020. In this case, an individual will be eligible for a payment in 2021, after filing their 2020 income.
- If an individual receives a check based on their 2019 or 2018 returns, yet becomes ineligible due to their 2020 reported income, they will not be expected to reimburse the government.
The money should be disbursed sometime in late April or early May. Payments will be made by direct deposit into accounts already on file with the IRS. It is also possible to file your bank account address on the IRS website Get My Payment if you wish to receive your funds via direct deposit. For households who have not reported this account information to the IRS, the checks will be mailed.
New Unemployment Benefits
The new stimulus package offers an additional payment intended to expand current state benefits to ensure that these benefits match the level of a median weekly wage. According to these new terms:
- Individuals will receive an extra $600 on top of regular state-level benefits for a period of up to four months.
- Unemployment benefits will be paid beyond their normal expiry date. The extended payments will last for 39 weeks instead of the standard 26 weeks.
- Expanded unemployment insurance will cover independent contractors and other self-employed individuals who work in the gig economy.
- Benefits are also granted to those who cannot work due to reasons related to the coronavirus. These include this who may be suffering from COVID-19, or have a family member who has been diagnosed. If a head of household passes away due to COVID-19, their family is also eligible for benefits. Additionally, individuals waiting to start a new position but whose workplace has been shut down temporarily due to the coronavirus are also granted benefits.
- If workers have received a furlough, they are also eligible for benefits.
- Additionally, the traditional 7 day waiting period before the issuance of unemployment benefits has been waived.
There are a few things to remember before applying for unemployment, according to experts. Make sure to use up any paid sick leave that you might have accrued. Your paid sick leave might equal an amount higher than your unemployment insurance. Also, bear in mind that the process of applying for these benefits may take a while. Applications have been flooding into these offices since the crisis began, and filings will take substantially longer to be processed.
To begin filing your unemployment benefits submission, select your state on this page. (INSERT LINK)
Paid Family Leave
New provisions in the stimulus package also build upon the family leave set out in the Families First Coronavirus Response Act, signed by President Trump on March 18. The March bill initially only covered business with less than 500 employees, offering 12 weeks of family leave with 10 weeks paid, to those forced to stay home due to the closure of schools and daycare facilities.
Under the new bill, any employee of more than 30 days who was fired on or after March 1, and subsequently rehired in 2020, is eligible for family leave. Eligible individuals will receive 2/3 of their pay, up to a maximum of $200 per day, and up to a total of $10,000 per employee. In essence, business are asked to pay up to $1000 per week for which the IRS will reimburse them.
Paid Sick Leave
Full and part-time employees who cannot work due to COVID-19 are eligible for up to 80 hours of paid sick leave, for which they will receive their full salary. This salary payment is capped at $511 per day, equal to a total of $5,110 per worker. Part-time employees will receive a pro-rated amount according to their hours of employment.
Others who must stay at home in order to care for sick family members or children who require full-time care are also eligible for paid sick leave at a rate of two-thirds of their pay. This payment has been capped at $200 per day, an aggregate of $2000 per employee.
Rent and Mortgage Payments
Anyone with federally backed loans, such as Fannie Mae and Freddie Mac, who is experiencing financial difficulties can request delaying payments on their loans for up to six months. Those needing this type of assistance must provide their loan servicer with a statement proving their financial difficulties during this time. Also, all foreclosures and evictions on properties that have federally backed mortgages have been cancelled. Although payments are waived, interest will still accrue on the loan. Nevertheless, companies managing the loans are forbidden from charging any penalties or additional fees.
Renters facing eviction are also protected under this new bill. However, this only applies in cases where they are living in a multifamily property, or a single family residence with a mortgage backed by federal funds. Under this rental relief plan, landlords are prohibited from evicting tenants or charging any late fees or penalties on delayed rent payments.
Some relief measures were implemented by the Department of Education earlier the year. The new stimulus package expands these initiatives, particularly for those who might have defaulted on loans or those who were applying to loan forgiveness programs.
- Interest has been halted on student loans from the period of April to September 30. Payments are also halted.
- Even though payments are not due, the Department of Education will consider this period equivalent to a borrower paying into public loan forgiveness programs.
- For those who are in a loan rehabilitation program, this period of suspension will apply towards the rehabilitation.
- Credit scores will not be impacted during this period of suspense payments.
- Wage garnishment and other seizures are suspended during this time.
In an additional measure, the Department of Education announced that $1.8 billion in offsets would be refunded. The department also stated that the actions of private collection agencies in the pursuit of defaulted borrowers is halted for the interim.
Changes in Retirement Plans
Previously if a person withdrew money from retirement accounts before the age of 59 1/2 they would face a 10% penalty and a requirement to pay income taxes on the amount.
In light of the current situation, the penalty has been waived, allowing “coronavirus-related” disbursements of up to $100,000. The sum may be repaid back into the account within three years without penalty and will not be counted as part of normal annual contribution caps. If the sum is not repaid, it will be subject to income taxes extended over three years.