President Donald Trump signed an unprecedented $2.2 trillion economic rescue package into law Friday to support businesses, rush resources to overburdened health care providers and help struggling families during the coronavirus situation.
His signature came just hours after the House of Representatives passed the measure by a voice vote, and less than 48 hours after it received unanimous approval from the Senate.
“I want to thank Democrats and Republicans for coming together and putting America first,” Trump said.
A historic $2 trillion economic recovery package will be sent to the president’s desk for signature after House lawmakers passed the bipartisan bill Friday afternoon.
The legislation, known as the CARES Act, is the third aid package from Congress during the growing coronavirus pandemic.
This relief package includes direct payments to Americans, an aggressive expansion of unemployment insurance and billions in business loans and aid to hospitals.
Who is getting a check?
Everyone earning up to $75,000 in adjusted gross income — the income on your tax return — and who has a Social Security number will receive a $1,200 payment. The payment steadily declines for those who make more, and phases out for those who earn more than $99,000. For married couples, both adults receive $1,200, with the phaseout starting at $150,000 of income and falling to zero for couples who earn $198,000 or more. Each child will also get $500. For heads of household with one child, the benefit starts to decline at $112,500 and falls to zero at $146,500.
What do I have to do to get one?
For most people, nothing. The U.S. Treasury will direct deposit the money in your bank if they have that information from this year’s tax return or last year’s. For everyone else, they will mail a check. If you didn’t file a tax return for either 2018 or 2019, your check could be delayed. The government can use your Social Security benefit statement as well.
When will I get the payment?
Treasury Secretary Steven Mnuchin has said repeatedly that it should arrive in three weeks. Even if it arrives electronically, you should receive a written notice within 15 days after the payment that specifies how much you received and how it was delivered.
Is there help in the bill for the unemployed?
The bill adds $600 a week, for a period of four months, to standard unemployment benefits, which vary by state. The measure adds 13 weeks of coverage for people who have exhausted their existing jobless benefits. It also provides funding for states to let people collect their payments immediately, eliminating a one-week waiting period.
What if I only work part-time?
Some states do provide partial unemployment for people who work part time or whose hours have been reduced. And the emergency legislation provides incentives for states to set up “short time compensation” programs, which provide benefits to offset lost pay through reduction of work hours. Those programs are intended to provide companies an alternative to cutting jobs.
For example, the rescue bill would pay half the cost of providing benefits to those with reduced hours through the end of the year to states that launch such programs.
I am a gig worker, can I qualify?
Yes. The bill would create a temporary Pandemic Unemployment Assistance program to cover many workers not traditionally eligible for unemployment benefits, including self-employed people, contractors and those with limited work history. That program will last through December 31.
How much might I receive?
The total amount of unemployment insurance depends on what each state provides. Economists at Goldman Sachs calculate that for the average worker who earns about $1,200 a week, the enhanced weekly benefit should fully replace their lost wages. For lower-income employees of restaurants and hospitals, it should provide more than their usual salaries.
Has the government done anything for housing payments?
Yes. Government-backed mortgage buyers Fannie Mae and Freddie Mac have said that they will suspend all foreclosure sales and evictions of borrowers in single-family homes owned by their companies. They have also expanded their forbearance program, offering more borrowers relief for up to one year and suspending late charges and penalties. Together they guarantee about half of the U.S. home market.
Also, the federal government suspended foreclosures and evictions for mortgages insured by the Federal Housing Administration.
If you’re worried about missing a mortgage payment, contact your lender immediately. Numerous banks have said they are willing to work with distressed borrowers, including potentially suspending or reducing mortgage payments for a stretch.
What about renters?
Renters’ fates depend on where they live and who they rent from. Reach out to your landlord or property management company to ask for leniency.
Several cities have halted evictions due to the coronavirus. Fannie and Freddie are also offering owners of multifamily properties forbearance relief on their mortgages, on condition they suspend all evictions of renters unable to pay because of the virus.
What about student loans?
Student loan borrowers have a few options.
If you have a federal student loan, you can apply for a deferment or a forbearance at any time. Both of these postpone payments temporarily but interest still accrues on some loans with deferment and all with forbearance.
Now, federal loan borrowers can seek an emergency administrative forbearance, which would allow them to postpone payments for up to 60 days. Borrowers must contact a servicer to apply. The postponement is automatically applied for borrowers more than 31 days late on payments. Interest will not be added to the balance at the end of the forbearance period.
Switching to an income-driven repayment plan may be a good option for some borrowers, said Mark Kantrowitz, a student loan expert and publisher of website Savingforcollege.com. If you’ve been laid off or your hours were greatly reduced, the payment can be lowered to zero.
The federal government also lowered the interest rate on all federally held student loans to 0% for an indefinite period. However, that will not lower the size of the monthly payment; instead it will apply the payment entirely to the principle of the loan.
If you have private student loans, contact your servicer for their options.
Will there be multiple payments?
No, this legislation only authorizes one-time payments. But House Speaker Nancy Pelosi suggested on CNN that Congress could revisit the issue: “We think we’ll get more direct payments in another bill.”
How will the money be sent?
If you’ve gotten a tax refund in the last two years by direct deposit, that’s where the money will be sent. If not, the IRS can mail a check to your “last known address,” and it has 15 days to notify you of the method and amount of the payment. They’ll send a phone number and appropriate point of contact so you can tell them if you didn’t receive it.
If you’ve moved recently, it may be a good idea to notify the IRS as soon as possible. The IRS also suggests that if you haven’t yet filed a tax return for 2018 or 2019, do it as soon as you can, so that the government has your up-to-date information on file.
I’m not an American citizen. Do I qualify?
Yes — as long as you’re living and working in the U.S. with a valid Social Security number. That includes green card holders, and it generally includes those on work visas, such as an H-1B and H-2A. But it generally excludes visitors and people who are in the U.S. illegally.
Are the cash payments taxable?
Do I have to pay the money back?
No. The money isn’t a loan, but a credit. You are not required to pay the government back.
What if I’m homeless or recently got out of prison? Will I get help?
As long as you have a Social Security number, you should be eligible to apply for the relief payments under the new system created by the IRS.
I owe back taxes. Will the IRS snatch my check?
No, your payment won’t be affected if you owe past due taxes to federal or state governments.
Are individuals with little to no income or those on means-tested federal benefits, such as SSI, eligible for a recovery rebate? Yes, there is no qualifying income requirement. Even individuals with $0 of income are eligible for a rebate so long as they are not the dependent of another taxpayer and have a work-eligible SSN.
Are seniors whose only income is from Social Security or a veteran whose only income is a veterans’ disability payment eligible? Yes, as long as they are not the dependent of another taxpayer. The bill also provides IRS with additional tools to locate and provide rebates to low-income seniors who normally do not file a tax return by allowing them to base a rebate on Form SSA-1099, Social Security Benefit Statement or Form RRB-1099, which is the equivalent of the Social Security statement for Railroad Employees. However, seniors are still encouraged to file their 2019 tax return to ensure they receive their recovery rebate as quickly as possible.