Federal Coronavirus Aid: A Complete Guide to Questions and Answers
The US $ 27 trillion aid bill, signed on March 2,2 by the President of the United States, will send money directly to Americans, significantly expand unemployment coverage and make a number of other changes to the life of the United States, writes New York Times.
President Trump has signed a $ 2,2 trillion bipartisan economic assistance plan to offer assistance to tens of millions of American families affected by the coronavirus pandemic. Its components include payments for individuals, expansion of unemployment insurance coverage, changes in student loans, various pension account rules and much more.
Here are answers to common questions about what will change after the law comes into force.
Payments to individuals
How big will the payments be?
Most adults will get $ 1200, some — less. For each suitable child under the age of 16 years, the fee will be an additional $ 500.
How many payments are provided?
Only one. Future laws may include additional charges.
How do I know if I will receive the full amount?
It depends on your income. Single adults with Social Security numbers who have adjusted gross income of $ 75 or less will receive the full amount. Married couples without children earning $ 000 or less will receive a total of $ 150. And taxpayers who submit data as the head of the family will receive full payment if they earned $ 000 or less.
Above these indicators, payment is reduced until it completely stops at the indicator for single people who earn $ 99, or for married people who have no children and earn $ 000. According to the Senate Finance Committee, a family with two children will no longer be eligible for any payments if its income exceeds $ 198.
You cannot receive payment if someone declares you a dependent, even if you are an adult. In any family, and in most cases, everyone must have a valid social security number in order to be eligible for payment. An exception — military personnel.
You can find the adjusted gross income in line 8b of the 1040 federal tax declaration for 2019.
More detailed calculations we published below.
Will college students get anything?
Not if someone indicates them as dependents. As a rule, students under the age of 24 are dependent in the eyes of the tax authorities if the parent pays at least half of their expenses.
What year of income do you need to look at?
On the 2019th. If you have not yet prepared a tax return, then you can use the data for 2018. If you haven’t submitted it yet, then you can use the social security certificate for 2019, which indicates your income, to find out what exactly your employer reported to the IRS.
If my income level does not give me the right to pay, but I expect that I will have such a right due to the loss of income in 2020, will I receive a payment?
The new plan does not help people in such current conditions, but you can get help as soon as you file your taxes in 2020: the payment is technically an advance on a tax credit, which is provided for the whole year. So it will depend on how much you earn.
There are many other provisions in the law. You can apply for unemployment benefits or for one of the new loans for small business owners or individual entrepreneurs.
Do I need to apply for a payment?
No. If the Internal Revenue Service already has information about your bank account, it will transfer money to you through a direct deposit based on the latest income tax data that it already has.
When will the payment arrive?
Treasury chief Steven Mnuchin said most people are expected to receive payments within three weeks.
If my payment does not come soon, how can I be sure that it was sent correctly?
According to the law, you will receive a paper notification by mail no later than a few weeks after payment. This notice will contain information on the form in which the payment was made and where it was received. If you cannot find the payment by then, you will need to contact the IRS using the information in the notification.
What to do if I haven’t filed tax returns yet? Will this affect my ability to receive payment?
It is possible. File your return as soon as possible, at least for 2018.
“Failure to file a tax return for 2018 could potentially affect payments.” — says the IRS website.
If you are worried that you owe money and cannot pay it, the IRS recommends consulting a tax specialist who can help you request an alternative payment plan or suggest a different solution.
Will people receive new benefits on social security benefits, pensions and disability benefits?
Will the unemployed and veterans receive these payments?
Yes — and those and others.
Will US citizens living abroad receive payment?
Yes, if they meet income requirements and have a social security number.
Do I have to pay income tax on the amount of my payment?
If my refunds are under arrest due to a default on student loans, will I receive a new payment?
No. In fact, the bill temporarily suspends almost all attempts to repay debts through tax refunds, including to the IRS itself. But this denial may not apply to people who receive child support.
Who will be covered by the expanded program?
The plan covers far more workers than are usually eligible for unemployment benefits, including self-employed and part-time workers.
Bottom line: those who are unemployed, partially unemployed or cannot work for a variety of reasons related to coronavirus are more likely to receive benefits.
How much will I get?
It depends on your staff.
According to Andrew Stettner, a senior fellow at Centur Foundation, a government policy research group, benefits will be expanded to replace the average wage. Such an employee earns about $ 1000 a week, and unemployment benefits often replace about 40% to 45% of this. The extension will fill in the gap.
Under the plan, eligible workers will receive an additional $ 600 per week in addition to state benefits. But some states are more generous than others. According to the Century Foundation, the maximum weekly payout in Alabama is $ 275, but in California it's $ 450, in New Jersey. — 713 dollars.
Let's say a worker made $ 1100 a week in New York; he will be eligible for state unemployment benefits of a maximum of $ 504 per week. As part of the new expansion, he will receive an additional $ 600 of federal unemployment compensation totaling $ 1104, which will generally replace his original salary.
The states have the opportunity to provide the full amount for one payment or send an additional part separately. But all this must be done on the same weekly basis.
Are gigonomics workers, freelancers and independent contractors covered?
Yes, self-employed people are eligible for unemployment benefits.
Benefit amounts will be calculated on the basis of previous income using the formula from the disaster relief program. Self-employed workers will also be eligible for an additional $ 600 weekly benefit from the federal government.
If I work part-time and lose my job due to a pandemic, but in my state the benefits do not apply to part-time workers, am I eligible for help?
Yes. Part-time workers are eligible for benefits, but the amount and duration of benefits depends on your state. They are also eligible for an additional weekly benefit of $ 600.
And if I have COVID-19 or do I need to take care of a family member who has one?
If you have been diagnosed, are experiencing symptoms or are awaiting a diagnosis, and as a result are left without work, become partially unemployed, or cannot work — you will be insured. The same thing happens if you have to take care of a member of your family or household who has been diagnosed with COVID-19.
What should I do if my child’s school or kindergarten is closed?
If you, in order to be able to work, rely on a school, kindergarten or other institution for caring for a child, an elderly parent or other family member, and this institution has been closed due to coronavirus, — You have the right to help.
The paramedic advised me to isolate myself. What about the more common orders to stay home?
People who must be self-insulating are entitled to help. The law also states that people who cannot get into work due to quarantine imposed as a result of the outbreak must be paid.
I was about to start a new job and now I can’t get there because of the pandemic. What do i need to know?
You are entitled to benefits. You will also be insured if you were fired from your new job and you do not have sufficient work experience to qualify for benefits in ordinary circumstances.
I had to leave work because of the coronavirus. Can I apply for benefits?
Differently. Suppose your employer did not fire you, but you had to quit because of the quarantine recommended by your healthcare provider, or because your child’s kindergarten is closed, and you — primary guardian. Similar situations are covered by the terms of the new rules.
But this does not apply to people who quit (or want to leave) because of fear that continued work will put them at risk of contracting coronavirus.
The employer closed my workplace because of the coronavirus. Am I eligible for benefits?
Yes. If you are unemployed, partially unemployed, or cannot work due to the fact that your company has closed, the bill applies to you.
The breadwinner of my family died of coronavirus. I counted on his income, and besides, I do not work. Is such a situation covered?
Who is not entitled to payouts?
Workers who can work from home and those who receive paid sick leave or paid family leave are not covered by the new benefits. People who are looking for work for the first time and cannot find, are also not eligible for benefits.
How long will the money be paid?
Many states already provide benefits for a period of 26 weeks, although some states have already reduced this period. Others provide a sliding scale tied to the level of employment.
The law provides all relevant workers an additional 13 weeks. Thus, participants in states with 26 weeks will be eligible for 39 weeks in total. The total amount should not exceed 39 weeks, but in some states it may be less.
An additional payout of $ 600 will continue for up to 4 months, spanning unemployment weeks ending July 31.
How long will the extended program last?
Extended coverage will be available to workers who have recently been eligible for unemployment benefits for several weeks, from January 27, 2020 until December 31, 2020.
I am already getting unemployment benefits. Will I get any more help?
Yes. Even if you already receive unemployment benefits for reasons other than coronavirus, your state benefits will still be extended for 13 weeks. You will also receive an additional $ 600 per week from the federal government.
My unemployment registration has recently ended. Can I register again?
Yes. Skilled workers who have exhausted their benefits can usually reapply. But how much you will receive and how long it depends on what state you worked in. Each will receive at least another 13 weeks along with an additional payment of $ 600.
Will this income disqualify me from other programs?
May be. An additional $ 600 allowance is considered income in determining eligibility for need-tested programs, with the exception of Medicaid and the Children's Health Insurance Program known as CHIP.
How long do I need to wait for benefits?
States are interested in abandoning the one-week waiting period, but it is unclear how long it will take to process applications, especially because official agencies are under stress due to their flow.
The federal government has already refused two-month payments and interest for many federal borrowers. Will these exemptions be expanded in accordance with the new law?
Yes. Until September 30, payments on any student loan held by the federal government will be automatically suspended. It’s hard to get in touch with many loan agents, so check your account online in the coming weeks. As soon as you log in, see the current amount payable. There you can see if billing systems are configured so that you do not pay.
How do I know if my loan is suitable?
If you have borrowed money from the federal government (the so-called direct loan) over the past 10 years, then you definitely have the right to help. 90% of loans (in dollar terms) will fit the rules.
Old Federal Family Education Loans (FFELs) that are not owned by the US Department of Education are not suitable, as are Perkins loans, loans from government agencies, or loans from private lenders such as Discover, Sallie Mae, and Wells Fargo. Holders of all these types of loans can offer their own assistance programs.
You should receive a notice within a few weeks indicating what happened to your federal loans. You can continue to pay the principal if you wish. Then, after August 1, you should receive several notifications informing you of the end of the suspension period and that you may be eligible to participate in an income-based repayment plan.
Will a loan agent charge me interest for a six month period?
The bill says interest on a loan is “not charged” during the suspension period. At the end of the suspension, carefully monitor what your loan agent is doing (or not doing) in order to return you to the previous repayment mode: mistakes are not uncommon.
Will a six-month grace period cost me money as I try to qualify for the loan forgiveness program by making 120 monthly payments?
No. The law says that the amount of your payments will increase by one payment every month for a six-month break, even if you will not make any payments. This is true for all forgiveness programs or restoration loans.
During the six-month period, was there a suspension in the payment of wages caused by a delay in loan payments?
Yes. As well as the confiscation of tax returns, the reduction of any other federal payments and other mandatory fees.
Are there any changes to the rules if my employer pays some of my student loans?
Yes. Some employers do this as compensation to employees. Between the date of signing the bill and the end of 2020, they can offer assistance in the amount of up to $ 5250 excluding this money as part of the employee’s income. If the employer pays for employee training, this money will also be taken into account in the help of 5250 dollars.
What pension account rules are suspended?
During calendar 2020, you will not have to make the required minimum allocation from any individual retirement accounts or retirement savings plans in the workplace, for example 401 (k). Thus, you do not have to sell investments that may fall in value, resulting in losses.
This change will not affect old-style pensions.
What if I need to borrow money from my IRA or workplace retirement plan earlier?
You can withdraw up to $ 100 this year without the usual 000% penalty, if only because of an outbreak of coronavirus.
You can also distribute any income taxes that you must pay within three years from the date you received the distribution. And if you want, you can put money back into your account before the expiration of these three years, although the rules usually make it difficult to make such a big contribution.
This exception applies only to seizures related to coronavirus. You have the right to do so if you, the spouse or dependent, have a positive test result, or you have experienced many other negative economic consequences associated with the pandemic. Employers can allow employees to independently confirm that they have the right to withdraw money from their retirement account.
Can I still borrow money from my 401 (k) retirement plan or other workplace plan?
Yes, and you can take twice the usual amount. Within 180 days of accepting an account confirming that you have been affected by a pandemic, you can take out a loan of up to $ 100. Usually you can’t withdraw more than half of your balance, but this rule is suspended.
If you already have a loan and you had to repay it before December 31, then you get an extra year.
On the subject: 9 tips for creating an emergency cash reserve
I want to help people who suffer from a pandemic. Does the bill affect charitable donations?
Yes. The bill provides for the possibility of a new deduction (and not only for 2020) up to $ 300 in the form of annual charitable contributions. It is available only to people who do not detail their contributions, and you calculate a new figure by subtracting the amount you give from your gross income.
To qualify, you must give cash to a qualified charitable organization, not a donor-funded fund (a charitable account often used by wealthy people to collect contributions for a given year to maximize contributions). If you have already given money back from January 1, then this contribution will be considered a limit of $ 300.
I was lucky to have a significant amount, and I want to give more to charity than usual. Have restrictions on such deductions changed?
Yes, have changed. Under the bill, donors can deduct 100% of their donation from adjusted gross income in 2020. If you have an income of $ 1 million, you can allocate $ 1 million to charity and deduct the full amount in 2020.
The new deduction only applies to cash gifts that go to charity. If you give money to, say, your private foundation, the old retention rules apply. Although the organizations that manage donor-funded funds are state-owned, you don’t get a higher deduction for donating money to your donor-funded fund.
If your assets are significant enough so that you can give more of your income this year, you will not lose the deduction for exceeding the amount. You can use it next year, as it always has been.
Other features of the bill
Will it negatively affect my credit report if I take advantage of the benefits associated with the pandemic, including the suspension of student loans?
No. At least it shouldn't.
The bill indicates that for a period starting January 31 and continuing 120 days after the termination of a national emergency, lenders and others must mark your credit file as current, even if you use changes in payments.
If your document had black marks before the pandemic, they will remain if you do not solve the problem during an emergency.
Credit agencies may make mistakes. Be sure to check your credit report several times a year, especially if you accept any help from any financial institution or payer this year.
Is there any relief for tenants in the new law?
Yes. The bill provides for a temporary, nationwide ban on eviction for all tenants whose homeowners have mortgages secured or owned by Fannie Mae, Freddie Mac, and other federal agencies. This will last for 120 days after passing the law, and landlords also cannot charge any fees or penalties for non-payment of rent.
Has the law made it illegal to disable Internet service providers for individuals or small businesses that cannot pay their bills?
Has the law barred utility providers from disabling services?
How to calculate how much you will receive as a help in connection with a pandemic
Individuals with adjusted gross income of up to $ 75 per year will be eligible for a full check for $ 000. Preferential checks will be issued to individuals earning up to $ 1200 per year (the payment amount drops by $ 99 for every $ 000 of income over $ 5).
Married couples are eligible for $ 2400 if their adjusted gross income is less than $ 150 per year. Preferential checks on a sliding scale will apply to couples who earn up to $ 000. Married couples will also receive an additional $ 198 for each child under the age of 000.
People who submit documents as the head of the family (usually single parents with children) are eligible to receive a check for $ 1200 if they have adjusted gross income of up to $ 112 per year. Preferential checks on a sliding scale are available for household heads earning up to $ 500 a year. Household heads will also receive an additional $ 136 per child under 500 years of age.
How many Americans will receive these payments? According to Kyle Pomerlo, a tax expert at the American Enterprise Institute, about 125 million people will receive a check, or about 83% of those who filed tax returns.
Who will not receive the check? The main persons excluded from receiving payment are wealthy “non-resident aliens” and “dependents” who can claim to be included in someone else's tax return.
Will there be another payment in the summer? May be. President Trump said that this is possible, but only if the economy remains unstable throughout the spring and additional growth is required.
Washington Post offers use calculator, which will help to more accurately calculate how much is owed to you as part of assistance in connection with the coronavirus pandemic.
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