COVID-19 $2.2 Trillion Stimulus Bill: What It Means For you
The Senate and House have just passed a sweeping Bill to help Americans amid the Coronavirus (COVID-19) pandemic. The basic details of the Bill and how it can affect you and your family are as follows:
– Direct Payments to Americans- Dependent on income level.
Up to $1,200 for individuals
Up to $2,400 for couples
An additional $500 per child
– $500 Billion for corporations
– $350 Billion for small businesses
– $150 Billion for state & local stimulus funds
– $100 Billion for hospitals
– Expanded unemployment insurance for those that typically don’t qualify.
Things You Should Know
Under the plan, people making up to $75,000 a year are expected to receive checks for $1,200. Couples making up to $150,000 would receive $2,400, with an additional $500 per child. The new agreement removed the phased-in provision that would have excluded lower-income Americans from receiving the full benefit.
The payments would decrease for those making more than $75,000, with an income cap of $99,000 per individual or $198,000 for couples.
The bill is also expected to include roughly $100 billion in assistance for hospitals; $350 billion in assistance to small businesses; $500 billion in aid for corporations, including airline companies and cruise lines, that have been hurt by the outbreak; and about $150 billion for state and local stimulus funds.
Unemployment insurance would also be significantly bolstered for four months by increasing payments and extending the benefit to those who typically do not qualify, such as gig economy workers, furloughed employees and freelancers. Specifically, the bill would increase the maximum unemployment benefit that a state gives to a person by $600 per week and according to Schumer, “ensures that laid-off workers, on average, will receive their full pay for four months.”
Unemployment Insurance Expanded Benefits
Provides for benefits of $600 per week through June 30, 2020, which is fully funded by the federal government.
Pandemic Unemployment Assistance Program
The Pandemic Unemployment Assistance Program provides up to 39 weeks of Unemployment Insurance benefits to people not otherwise eligible for regular unemployment compensation (including self-employed and those who have exhausted their regular benefits).
Small Business Assistance Program
Furthermore, the government is stepping in to help small businesses which are the lifeblood of the American economy, particularly responsible for the employment of many countless millions of Americans. The Federal Government through the Small Business Administration (SBA) will be providing the following:
A $350 billion forgivable loan program designed to ensure that small businesses do not lay off employees
A 50% refundable payroll tax credit on worker wages will further incentivize businesses, including ones with fewer than 500 employees, to retain workers
Looser net operating loss-reduction rules that will allow businesses to offset more
A delay in employer-side payroll taxes for Social Security until 2021 and 2022
Sole proprietors and other self-employed workers could be eligible for the expanded unemployment-insurance benefits the bill provides
A portion of the $425 billion in funds appropriated for the Federal Reserve’s credit facilities will target small businesses
The SBA, under the stimulus package, will also oversee the Paycheck Protection Program, which will distribute $350 billion to small businesses that can be partially forgiven if the companies meet certain requirements. The loans will be available to companies with 500 or fewer employees. See below for details:
Under the CARES Act, qualifying businesses include:
Businesses with up to 500 employees or which meet the applicable size standard for the industry as provided by SBA’s existing regulations
Businesses in the accommodation and food services industries with more than one physical location but no more than 500 employees at each location
Eligible independent contractors and sole proprietors.
Businesses can receive loans up to $10 million, based on how much the company paid its employees between Jan. 1 and Feb. 29. The loans will carry an interest rate of up to 4%. The bill provides for an expedited origination process.
If the business uses the loan funds for the approved purposes and maintains the average size of its full-time workforce based on when it received the loan, the principal of the loan will be forgiven, meaning the company will only need to pay back the interest accrued.
As of Monday, March 30, 2020 the Federal Government with the assistance of the SBA has streamlined the process for applying for these loans. If you need assistance for your small business you should go to: https://www.sba.gov/funding-programs/loans/paycheck-protection-program-ppp or for a disaster loan go to: https://covid19relief.sba.gov/#/
Companies may borrow up to 2.5 times their payroll, or up to $10 million.
The government will pay off the loan balance so long as the companies either do not lay off workers or rehire ones they’ve already let go.
8 weeks for payroll plus 25% for overhead