Coronavirus Stimulus Package: What it Means For You
- Coronavirus stimulus payments can help you get through financial challenges during COVID.
- Payments depend on your income, marital status and number of children.
- Other protections include suspension of eviction and foreclosures.
President Trump signed a $2 trillion coronavirus relief bill on March 27, making it the largest emergency spending package in U.S. history. The stimulus bill speaks to the needs of those hardest hit by the sharp, sudden decline in economic activity as millions of Americans remain at home in an effort to slow down the spread of COVID-19. In addition to aid for struggling industries, the stimulus bill also includes help for workers, homeowners, renters, the unemployed, and low-income individuals. This is a challenging and confusing time for most people.
The following information will help you make sense of the coronavirus stimulus package, and focuses on provisions in the bill that may directly help every day workers and families.
Cash assistance for individuals and families
The direct payment of cash to taxpayers and their families was one of the most talked-about provisions of the stimulus bill during negotiations. Cash is expected to be disbursed around mid-April, either by direct deposit (if you e-filed your 2018 or 2019 taxes) or a mailed check.
Lawmakers settled on the following:
$1,200 for individuals who earned less than $75,000 in 2019
$2,400 for married couples who earned less than $150,000 in 2019
$500 for each child under 17 years old
Higher earning individuals will see a $5 payment decrease for every $100 earned over the $75,000 limit, while those who earned $99,000 or more ($198,000 for couples) will not receive cash assistance. The IRS will provide updates on the status of this one-time payment.
Boost to unemployment insurance benefits
In an effort to provide help for workers who have been impacted by the coronavirus crisis, the stimulus bill expands unemployment insurance (UI) eligibility and increases weekly payments. Those filing for unemployment can receive an additional $600 per week until July 31, 2020, on top of their regular state benefits (which average $200 to $550, depending on the state). The law also permits states to extend their UI benefits for up to 13 weeks, and there’s talk of extending the $600 weekly federal amount as well.
In addition, the stimulus bill expands the eligibility criteria to include those who are partially unemployed, still employed but unable to work because of the outbreak, independent contractors, the self-employed, and others who don’t traditionally qualify for UI. This means the growing segment of so-called “gig economy” workers would qualify. And instead of the usual one-week waiting period, the relief package calls for checks to be sent immediately upon filing.
Student loan payments, interest, and collections
If you have student loan debt, the stimulus bill could provide relief in a few different ways. Many of these provisions expand on the President’s executive actions, which included halting collections on defaulted student loan debt. Economic stimulus related to federal student loan debt includes:
Freeze on monthly payments until Sept. 30 (this is optional, but you will not incur a penalty or accrue interest if you take advantage of this moratorium)
If you are pursuing (or plan to pursue) a student loan forgiveness program, those six months ending Sept. 30 will count regardless of whether payments were made during that time
Eligibility of your employer to pay up to $5,250 of your student loans, tax-free
Suspension of federal student loan debt collection against borrowers who are in default; retroactive to March 13 and continuing indefinitely
Protection against foreclosure and eviction
Since the combination of stay-at-home orders and a suddenly slowing economy could create real stress when it comes time to pay the rent or mortgage, the stimulus bill also protects many people from eviction and foreclosure.
Specifically, any homeowner facing hardship as a result of COVID-19 is eligible for:
Forbearance on their federally backed mortgage loan for up to 60 days. This can be extended for up to four 30-day periods, as needed.
Servicers of federally backed mortgages may not start the foreclosure process for 60 days (beginning March 18), during which lenders may not charge interest, fees, or penalties.
If you have a federally backed mortgage and rent any portion of that property to tenants:
You may not evict them (or charge any penalties) for a 120-day period solely for failure to pay rent.
California banned the eviction of those directly affected by the coronavirus crisis or its economic impacts through the end of May.
A few more things to know
People will be affected by the coronavirus crisis in different ways. Depending on your situation, this $2 trillion stimulus bill may offer additional relief, including:
Direct medical care for military veterans and care for homeless veterans
Nutrition assistance, particularly a $15 billion increase in funding for the Supplemental Nutrition Assistance Program (SNAP)
Various relief services for Native American communities
$900 million increase in funding for the Low-Income Home Energy Assistance Program (LIHEAP)
Additional funding for the non-profit Legal Services Corporation to assist families and small businesses facing legal issues as a result of the coronavirus outbreak
Need help with your finances during this trying time? We’re here to help.
The coronavirus stimulus bill should help ease some of your anxiety as we all hunker down and stay safe. But if you’re struggling with your debt or concerned about making your payments, you may want to take additional actions. Freedom Debt Relief is here to help you explore your options, including our debt settlement program. Our Certified Debt Consultants can help you get a solid footing and chart a path toward a better financial future. Find out if you qualify.
Editor’s Note, May 22, 2020: This post was updated with information and links to reflect the latest changes in government support and benefits.