As of April 23, 2020

Stimulus Bill FAQ

Coronavirus/COVID-19

In March 2020, U.S lawmakers signed a $2 trillion stimulus bill called the CARES (Coronavirus Aid, Relief, and Economic Security) Act to offer assistance to tens of millions of American households affected by the coronavirus pandemic. Its components include stimulus payments to individuals, expanded unemployment coverage, student loan changes, different retirement account rules and more. 
 
Here are the answers to common questions about what’s in the plan.

How large will the payments be?


Most adults will get $1,200, although some would get less. For every qualifying child age 16 or under, the payment will be an additional $500.




How many payments will there be?


Most adults will get $1,200, although some would get less. For every qualifying child age 16 or under, the payment will be an additional $500.




How much will I get?


The IRS bases the amount of your payment on the adjusted gross income (AGI) listed on your most recent tax return: 2018 or 2019. The maximum payment is $1,200 for single filers with an AGI below $75,000 or single parents (heads of household) with an AGI below $112,500. Married couples who file jointly and have an AGI below $150,000 will get a total of $2,400. Payments will begin to phase out at a rate of $5 for each $100 over the AGI threshold before ceasing at an AGI of $99,000 for single filers, $136,500 for heads of household, and $198,000 for married filers. There's also an additional $500 allotted to parents who have an AGI within the phaseout range for each child younger than 17. You can find your adjusted gross income on Line 8b of the 2019 1040 federal tax return.




Do college students get anything?


College students who are older than 17 and still claimed as a dependent by their parents, including any students whose parents pay for over half of their expenses do not qualify for the payment.




Will I have to apply to receive a payment?


No. If the Internal Revenue Service already has your bank account information from your 2019 or 2018 returns, it will transfer the money to you via direct deposit based on the recent income-tax figures it already has.




When will the payment arrive?


Everyone with direct deposit should get the payments before April 24. Then, paper checks will be sent out which could take months.




What if I haven't filed my taxes in 2018 or 2019?


The IRS said if you haven't filed your 2018 federal taxes, that could affect your stimulus check and urges anyone who hasn't filed a 2018 tax return to file now.




Will most people who are receiving Social Security retirement and disability payments each month also get a stimulus payment?


You’ll still receive the payments, as long as you meet the income thresholds. Even if you do not typically file taxes, the IRS will send you the money the same way you normally get your benefits. However, the IRS notes that it does not have information on dependents for people who do not have to file their taxes, so in those cases, you will not get an additional $500 for dependents age 16 or younger.




Will U.S. citizens living abroad get a payment?


Yes, as long as they meet the income requirements and have a Social Security number.




If my payment doesn’t come soon, how can I be sure that it wasn’t misdirected?


According to the bill, you will get a paper notice in the mail no later than a few weeks after your payment has been disbursed. That notice will contain information about where the payment ended up and in what form it was made. If you couldn’t locate the payment at that point, it would be time to contact the IRS using the information on the notice.




Do I have to pay income taxes on the amount of my payment?


No.





Stimulus Payments
Unemployment Benefits

Who will be covered by the expanded program?


Unemployment benefits are typically available to Americans if they have been laid off from their job. Americans who are self-employed, unable to work or do not have a recent earnings history are ineligible to receive the benefits. The program typically excludes people who were fired or quit their jobs without good cause. However, the CARES Act expands eligibility to include self-employed people, those seeking part-time employment and independent contractors. Americans who are diagnosed with COVID-19, the respiratory illness caused by the novel coronavirus, or who are unable to go to work because of quarantine would also be eligible.




How much will I receive?


Under the plan, eligible workers will get an extra $600 per week on top of their state benefit. In California, it is $450. People will receive an extra $600 a week in unemployment benefits for up to four months. So let’s say a worker was making $1,100 per week in California; she’d be eligible for the maximum state unemployment benefit of $450 per week. Under the new expansion, she gets an additional $600 of federal pandemic unemployment compensation, for a total of $1,550, essentially replacing her original paycheck.




Are gig workers, freelancers and independent contractors covered?


Yes, self-employed people are newly eligible for unemployment benefits. Benefit amounts will be calculated based on previous income, using a formula from the Disaster Unemployment Assistance program, according to a congressional aide. Self-employed workers will also be eligible for the additional $600 weekly benefit provided by the federal government.




What if I’m a part-time worker who lost my job because of a coronavirus reason, but my state doesn’t cover part-time workers? Am I still eligible?


Yes. Part-time workers are eligible for benefits, but the benefit amount and how long benefits will last depend on your state. They are also eligible for the additional $600 weekly benefit.




What if I have Covid-19 or need to care for a family member who has it?


If you’ve received a diagnosis, are experiencing symptoms or are seeking a diagnosis — and you’re unemployed, partly unemployed or cannot work as a result — you will be covered. The same goes if you must care for a member of your family or household who has received a diagnosis.




What if my child’s school or daycare shut down?


If you rely on a school, a day care or another facility to care for a child, elderly parent or another household member so that you can work — and that facility has been shut down because of coronavirus — you are eligible.




What if I’ve been advised by a health care provider to quarantine myself because of exposure to coronavirus? And what about broader orders to stay home?


People who must self-quarantine are covered. The legislation also says that individuals who are unable to get to work because of a quarantine imposed as a result of the outbreak are eligible.




I was about to start a new job and now can’t get there because of an outbreak.


You’re eligible for benefits. You will also be covered if you were immediately laid off from a new job and did not have a sufficient work history to qualify for benefits under normal circumstances.




I had to quit my job as a direct result of coronavirus. Would I be eligible to apply for benefits?


It depends. Let’s say your employer didn’t lay you off but you had to quit because of a quarantine recommended by a healthcare provider, or because your child’s day care closed and you’re the primary caregiver. Situations like that are covered.




My employer shut down my workplace because of coronavirus. Am I eligible?


Yes. If you are unemployed, partly unemployed or unable to work because your employer closed down, you’re covered under the bill.




The breadwinner of my household has died as a result of coronavirus. I relied on that person for income, and I’m not working. Is that covered?


Yes.




Whom does the bill leave out?


Workers who are able to work from home, and those receiving paid sick leave or paid family leave are not covered. New entrants to the workforce who cannot find jobs are also ineligible.




How long will the payments last?


Many states already provide 26 weeks of benefits, though some states have trimmed that back while others provide a sliding scale tied to unemployment levels. The bill provides all eligible workers with an additional 13 weeks. So participants in states with 26 weeks would be eligible for a total of 39 weeks. The total amount cannot exceed 39 weeks, but it may be shorter in certain states. The extra $600 payment will last for up to four months, covering weeks of unemployment ending July 31.




How long would the broader program last?


Expanded coverage would be available to workers who were newly eligible for unemployment benefits for weeks starting on Jan. 27, 2020, and through Dec. 31, 2020.




I’m already receiving unemployment benefits. Will I receive any help?


Yes. Even if you’re already receiving unemployment benefits for reasons unrelated to the coronavirus, your state-level benefits will still be extended by 13 weeks. You will also receive the extra $600 weekly benefit from the federal government.




My unemployment recently ran out — could I sign up again?


Yes. If you’ve exhausted your benefits, eligible workers can generally reapply. But how much you get and for how long depends on the state where you worked. Everyone gets at least another 13 weeks, along with the extra $600 payment through July 31.




Are any unemployment benefits retroactive?


Maybe. If you are newly eligible for benefits, you may be able to claim state-level benefits retroactively, back to Jan. 27. But it will ultimately be determined by your state, which will consider the date that you became unemployed and any extenuating circumstances that prevented you from filing earlier, according to a representative for the Department of Labor. People who are already receiving unemployment will not get any retroactive benefits. If your benefits run out, you’ll be eligible for the added 13 weeks of state-level benefits (as long as you continue to meet the eligibility criteria). The extra $600 payment being paid by the federal government is also not retroactive.




Will this income disqualify me from any other programs?


Maybe. The additional $600 benefit counts as income when determining eligibility for means-tested programs, except for Medicaid and the Children’s Health Insurance Program, known as CHIP.




How long will I need to wait for benefits?


States have been incentivized to waive the one-week waiting period, but it’s unclear how long it will take to process claims — especially with state offices so strained by a flood of them.





Retirement Accounts

The federal government has already waived two months of payments and interest for many federal student loan borrowers. Is there a bigger break now with the new bill?


Yes. Until Sept. 30, there will be automatic payment suspensions for any student loan held by the federal government. It is hard to contact many of the loan servicers right now, so check your account online in the coming weeks. Once you are logged in, look for the current amount due. There, you should be able to see if the servicer has reset its billing systems so that you are showing no payment due.




How do I know if my loan is eligible?


If you’ve borrowed money from the federal government — a so-called direct loan — in the past 10 years, you’re definitely eligible. According to the Institute for College Access & Success, 90 percent of loans (in dollar terms) will be eligible. Older Federal Family Educational Loans (F.F.E.L.) that the U.S. Department of Education does not own are not eligible, nor are Perkins loans, loans from state agencies, or loans from private lenders like Discover, Sallie Mae and Wells Fargo. The holders of all those kinds of loans may be offering their own assistance programs. Within a few weeks, you are supposed to receive notice indicating what has happened with your federal loans. You can choose to keep paying down your principal if you want. Then, after Aug. 1, you should get multiple notices letting you know about the cessation of the suspension period and that you may be eligible to enroll in an income-driven repayment plan.




Will my loan servicer charge me interest during the six-month period?


The bill says that interest “shall not accrue” on the loan during the suspension period. At the end of the suspension, keep a close eye on what your loan servicer does (or does not do) to put you back into your previous repayment mode. Servicer errors are common.




Will the six-month suspension cost me money, since I’m trying to qualify for the public service loan forgiveness program by making 120 monthly payments?


No. The legislation says that your payment count will still go up by one payment each month during the six-month suspension, even though you will not actually be making any payments. This is true for all forgiveness or loan-rehabilitation programs.




Is wage garnishment that resulted from being behind on my loan payments suspended during this six-month period?


Yes. So is the seizure of tax refunds, the reduction of any other federal benefit payments and other involuntary collection efforts.




Are there changes to the rules if my employer repays some of my student loans?


Yes. Some employers do this as an employee benefit. Between the date the bill is signed and the end of 2020, they can offer up to $5,250 of assistance without that money counting as part of the employee’s income. If the employer pays tuition for classes an employee is taking, that money will also count toward the $5,250.





Student Loans

The federal government has already waived two months of payments and interest for many federal student loan borrowers. Is there a bigger break now with the new bill?


Yes. Until Sept. 30, there will be automatic payment suspensions for any student loan held by the federal government. It is hard to contact many of the loan servicers right now, so check your account online in the coming weeks. Once you are logged in, look for the current amount due. There, you should be able to see if the servicer has reset its billing systems so that you are showing no payment due.




How do I know if my loan is eligible?


If you’ve borrowed money from the federal government — a so-called direct loan — in the past 10 years, you’re definitely eligible. According to the Institute for College Access & Success, 90 percent of loans (in dollar terms) will be eligible. Older Federal Family Educational Loans (F.F.E.L.) that the U.S. Department of Education does not own are not eligible, nor are Perkins loans, loans from state agencies, or loans from private lenders like Discover, Sallie Mae and Wells Fargo. The holders of all those kinds of loans may be offering their own assistance programs. Within a few weeks, you are supposed to receive notice indicating what has happened with your federal loans. You can choose to keep paying down your principal if you want. Then, after Aug. 1, you should get multiple notices letting you know about the cessation of the suspension period and that you may be eligible to enroll in an income-driven repayment plan.




Will my loan servicer charge me interest during the six-month period?


The bill says that interest “shall not accrue” on the loan during the suspension period. At the end of the suspension, keep a close eye on what your loan servicer does (or does not do) to put you back into your previous repayment mode. Servicer errors are common.




Will the six-month suspension cost me money, since I’m trying to qualify for the public service loan forgiveness program by making 120 monthly payments?


No. The legislation says that your payment count will still go up by one payment each month during the six-month suspension, even though you will not actually be making any payments. This is true for all forgiveness or loan-rehabilitation programs.




Is wage garnishment that resulted from being behind on my loan payments suspended during this six-month period?


Yes. So is the seizure of tax refunds, the reduction of any other federal benefit payments and other involuntary collection efforts.




Are there changes to the rules if my employer repays some of my student loans?


Yes. Some employers do this as an employee benefit. Between the date the bill is signed and the end of 2020, they can offer up to $5,250 of assistance without that money counting as part of the employee’s income. If the employer pays tuition for classes an employee is taking, that money will also count toward the $5,250.





Other Features of the Bill

How does the aid for small businesses and nonprofits work?


Many small companies and nonprofits are eligible for federal grants and low-interest loans.




How do student loan deferment and forbearance affect your credit score?


Neither deferment or forbearance on your student loan has a direct impact on your credit score.




Is there any relief for renters in the bill?


The bill protects renters by issuing a 120-day moratorium on evictions from federally subsidized housing or from a property with a federally backed mortgage loan. Landlords can’t charge any fees or penalties for nonpayment of rent.




Did the legislation make it illegal for any internet provider to cut off service to an individual or small business that can’t pay its bills?


No.




Did the legislation make it illegal for utility providers to cut off service?


No.





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