Here’s What Individuals, Workers and Businesses Need to Know About the Coronavirus Stimulus Package
How it affects unemployment, charitable donations, payroll taxes and more. Plus: when you should expect that $1,200 check.
On Wednesday, the Senate announced its $2 trillion economic stimulus package, aimed at helping support individuals and businesses, and keep our economy afloat during the coronavirus crisis. With the bill passing out of the House today, it looks like relief is on the way. To help break down what the legislation entails, we spoke with Debra Friedman, a Philadelphia-based labor and employment attorney at Cozen O’Connor. Here’s what you need to know …
… If you’re a person who makes less than $99,000 annually.
Probably the most-publicized part of the package is the promise of a $1,200 check for every adult, or $2,400 for every married couple, plus $500 for each child in a household. That’s mostly true, though the amount of that $1,200 check will be reduced for individuals who earn more than $75,000 a year. Essentially, no single person who earns $99,000 annually or more, nor married couples with no children who earn more than $198,000, will receive this benefit (unless you filed your taxes as a “head of household,” in which case the cap is $112,500). These checks will not be subject to income tax.
“We know that the goal is to get checks in people’s hands as quickly as possible to help the economy,” Friedman said. “But we don’t know the logistics of that. And part of the issue is that this legislation is being put together and passed very quickly. Often these types of bills don’t fully address implementation issues and everyone’s questions about the scope. Some of that work is going to be done after the bills are passed.”
Treasury Secretary Steven Mnuchin said that he wants the payments to go out within three weeks of President Trump signing the bill into law. If the IRS has your direct deposit information, you’ll receive the money that way. Otherwise, you’ll likely receive a check in the mail.
… If you’re unemployed.
You’ll be eligible for large unemployment payments over a longer period of time. Under the current law, Pennsylvania offers 26 weeks of benefits, with a maximum weekly payment of $573. The new stimulus bill adds another 13 weeks to this cap, and increases the payments by $600 a week.
… If you’re newly unemployed.
You won’t have to wait the normal 1 week waiting period before your benefits kick in.
… If you’ve been unemployed for a while and have exhausted your unemployment benefits.
You may be eligible for new or extended benefits under this bill.
… If you’re an independent contractor, are self-employed or have a limited work history.
These are categories of workers who would typically not be eligible for unemployment benefits. But under the stimulus bill, you’ll be able to apply for support if you’re unable to work due to the public health crisis.
… If you have student loan payments.
Student loans from the federal government will be paused until September 30th. Loans will not accrue interest during this time.
… If you need to take money out of your IRA.
The bill eliminates the 10 percent penalty for removing up to $100,000 dollars from a retirement account for virus-related reasons.
… If you’ve made or plan to make donations to charitable organizations.
You’ll be able to utilize a new tax deduction for 2020 without itemizing your deductions, for up to $300 in donations to qualified charities. Money given since January 1, 2020. counts toward this amount.
… If you’re worried about being evicted or being unable to pay rent.
Any landlord whose mortgage is backed or owned by federal entities will not be able to evict renters for a 120-day period.
… If you’re a business owner.
The bill would postpone payment of payroll taxes. It would also establish a number of business loans for employers, many of which will be eligible for loan forgiveness. For example, a loan under the Small Business Act that is part of the payment protection program is eligible for loan forgiveness “equal to the amount that the borrower spent during an eight-week period after the origination date of the loan.”
“The idea is that if the borrower spends that loan on payroll costs or interest payments on any mortgages, or rent or utilities, those are the types of costs that would be eligible for loan forgiveness,” Friedman said. “The incentive is to get businesses to retain their employees.”
Those so inclined can find the full text of the coronavirus stimulus package legislation here.