What does the stimulus package have to do with me?
Original Post: 4/8/2020
Edited: 6/05/2020
Categories included in this blog post:
Small Businesses
Individuals
Unemployment Insurance
Charitable Donations
Health & Wellness
In the past several months the economy at large has seen an upheaval like it has never seen before. I am going to call it a topsy turvy economical environment, as that’s the best way I can rationalize what’s been going on. Between hundreds of countries feeling the weight of this Covid-19 virus, to hundreds of thousands of people getting sick, and some even passing away.
In order to encourage and stimulate the economy there have been a series of federal relief acts that have come into play. These federal relief acts are meant to revive the US economy during this pandemic. Navigating the intricacies of these federal relief acts is actually no small feat. The bipartisan bills themselves are over hundreds of pages long, and reading/articulating/ and interpreting them is a job in and of itself.
I am going to attempt to help guide your path on your way to economic relief by providing some (hopefully) helpful information to you. This is a somewhat round-up of a post, linking back to the original post articles I am pulling the information from. Things are changing rapidly in this economy, so I’ll be updating this post as I go. Make sure to also do your own research. In the meantime, you can check back here for more updates, as well as my Covid-19 webpage, which lists out bullet points of resources that you can use today.
CARES ACT FOR SMALL BUSINESSES - PPP Funding
Here's a quick summation:
1. PPPFA changes amount of loan needed for payroll to 60%
2. PPPFA extends time period to use funds from 8 to 24 weeks
3. PPPFA pushes back a June 30 deadline to rehire workers to December 31, 2020
It is important to note, however, that the law did not change how salaries are calculated towards forgiveness. The payroll calculation used in the loan application still applies to the forgivable amount. So, employee compensation eligible for forgiveness is still capped at $100,000, and until further guidance, employer owners and contractors are still capped at $15,385. Presumably with the new law, however, having an extra six months of expenses eligible for forgiveness will make up for any gaps and ensure 100% forgiveness of the loan.
4. PPPFA eases rehire requirements
The new law makes two significant changes to these requirements. First, it extends the rehire date to December 31, 2020, and second, it adds additional exceptions for a reduced head count. The law states a business can still receive forgiveness on payroll amounts if it:
Is unable to rehire an individual who was an employee of the eligible recipient on or before February 15, 2020;Is able to demonstrate an inability to hire similarly qualified employees on or before December 31, 2020; or Is able to demonstrate an inability to return to the same level of business activity as such business was operating at prior to February 15, 2020.
5. PPPFA extends the repayment term from 2 years to 5 years
CARES ACT FOR THE INDIVIDUAL
The biggest piece of this relief act, and one that is most widely known about, is the stimulus economic impact payment. Which is actually a rebate on your taxes for 2020. Essentially, the government included this as an additional special tax credit to what would be received as a tax rebate for 2020, but the refund will be ushered in this year, rather then when we file taxes in April of 2021.
Here’s the language directly from the IRS webpage:
Who is eligible for the economic impact payment?
Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible. Social Security recipients and railroad retirees who are otherwise not required to file a tax return are also eligible and will not be required to file a return.
Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child.
The IRS does not have my direct deposit information. What can I do?
In the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail.
Source: https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know
If you want to provide the IRS your direct deposit information, you can head over to Intuit's Turbo Tax Stimulus Check webpage, and then click on Register at the bottom right of the page. If you try this option let me know how it goes! (Direct link: https://turbotax.intuit.com/stimulus-check/)
UNEMPLOYMENT INSURANCE
If you suddenly find yourself having lost your job recently, I would highly recommend you file for unemployment right away. You can file for unemployment here at the State of California’s Employment Development Department (EDD) Website. Within this bill there is an additional $600 per week from the Federal Government on top of what you would normally get, depending on the State you live it is typically two-thirds of total wages.
Additionally, you could use this as an opportunity to look for work, and find yourself a side hustle. If that does not feel like the right move, my next suggestion is to look for ways in which you could create an income stream… Maybe that means selling items around your home. Maybe that means driving for Uber. Maybe that means working for Amazon, Instacart, or even at a local restaurant. If you look hard enough you will find ways in which you are able to bring in an income during this time.
CHARITABLE DONATIONS
Within the CARES act there is a provision titled “Allowance of Partial Above the Line Deduction for Charitable Contributions”. The bill says specifically,
“In the case of taxable years beginning in 2020, the amount (not to exceed $300) of qualified charitable contributions made by an eligible individual during the taxable year. The amendments made by this section shall apply to taxable years beginning after 10 December 31, 2019.’’
This provision is effectively eliminating the need to itemize in order to claim some of your charitable donations as a deduction. There is one organization that I am working with that is in need of financials assistance. I’ve updated this blog post to include information about that organization. Any help you could give is appreciated.
“Specifically, the version of the bill that the Senate passed would allow taxpayers to claim up to $300 in charitable donations as what's known as an "above the line" deduction. That term is legal jargon for a deduction that you don't have to itemize in order to get. Additional contributions would still be eligible for deduction if you itemize, ensuring that the measure won't hurt anyone who already gets a tax break from their charitable giving. The measure would be effective for the 2020 tax year, so those who haven't filed their taxes yet this year shouldn't expect to see this break on their 2019 returns.” Article by The Motley Fool.
HEALTH & WELLNESS
I am not a doctor, nor do I have the desire to replace your doctor’s advice. So, take the following information with a grain of salt as helpful information from me to you. Always, always, always consult your doctor first before taking advice from someone on the internet.
The CDC recommends preparing your family in the chance that you or a family member contracts Covid-19. Here’s a helpful list that you can reference. I would make sure that this is communicated to your family and that everyone is on the same page, as soon as possible. Preparation is key!
Recently I attended a webinar from a doctor at Huntington Hospital who has been there for close to thirty years. This doctor provided the following webpages to keep oneself informed during this pandemic.
www.publichealth.lacounty.gov/media/
Huntington Hospital post their Coronavirus Covid-19 stats here:
Huntington Hospital’s Important Phone Numbers
COVID-19 General Line (626) 397-3777
Surgery cancellations (626) 397-3166
Donations line at (626) 397-5448
The County of LA wants to make sure we are keeping ourselves informed and have also offered resources, which are located here: https://workforce.lacounty.gov/
Mental Health Line for LA County: 800-854-7771
Domestic VIolence Services are open, and accepting intakes: 800-978-3600
The State of California has pulled together a guide for brain health and physical health if you are dealing with any type of stress as related to the pandemic.
https://covid19.ca.gov/manage-stress-for-health/
24-hour Suicide Prevention Lifeline:
1-800-273-8255 or text 838255
24-hour Domestic Violence Hotline:
1-800-799-7233 or click Chat Now
You can find that guide here: https://covid19.ca.gov/resources-for-emotional-support-and-well-being/
If you are in a life-threatening emergency please don’t hesitate to dial 9-1-1 as they are available and ready to help.
Additional References:
From The Hartford: Paycheck Protection Program
From NY Times: Coronavirus Stimulus Package Questions Answered
From the Tax Adviser: CARES Act tax provisions aim to stabilize pandemic-ravaged economy
US Government Coronavirus webpage
Senate’s Guide to the CARES act
The wealthy Accountant article on how to maximize your benefits under the CARES act
Read the full bill here: This Act may be cited as the ‘‘Families First Coronavirus Response Act’’.
Read the full 880 page bill here: Coronavirus Aid, Relief, and Economic Security Act