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How Does the $2 Trillion Coronavirus Aid Package Impact You?

March 2020

Cypress Wealth Services

This week’s news feed has been filled with the monumental stimulus package being approved by Congress and the President. There is a lot of information out there so we thought it would be ideal for us to provide some highlights that may impact you. The bill covers several areas, so if you don’t see below a topic you want to be addressed, please contact us.

There is also a lot of misinformation regarding Social Security benefits being impacted as well so we address that as well.

Who Will Get a Stimulus Check?

- Under the plan, individuals who earn $75,000 in adjusted gross income or less would get direct payments of $1,200 each, with married couples earning up to $150,000 receiving $2,400 -- and an additional $500 per each child. The payment would scale down by income, phasing out entirely at $99,000 for singles and $198,000 for couples without children.

- Married couples would each receive a check and families would get $500 per child. That means a family of four earning less than $150,000 can expect $3,400.

- The cash payments are based on either your 2018 or 2019 tax filings. People who receive Social Security benefits but don't file a tax return are still eligible, too. They don't need to file taxes; their checks will be based on information provided by the Social Security Administration.

Here is a link to a great Q/A article that provides greater detail. They discuss how you how and when you might receive your money. Click here to view the article.

Retirement Savings

- This year, you’ll be able to take a coronavirus-related distribution of up to $100,000 from your retirement plan or IRA without the 10% early withdrawal penalty, according to the most recent version of the bill.

- The bill also relaxes the rules around retirement-plan loans, allowing you to borrow up to $100,000 from your 401(k). That’s double the amount you can normally take.

- Retirees who would normally take required minimum distributions from their retirement savings can waive them for 2020.

Click here to view- What Does the coronavirus bill mean to your retirement?

Extra Unemployment Payments

- The bill makes major changes to unemployment assistance, increasing the benefits and broadening who is eligible. States will still continue to pay unemployment to people who qualify. That amount varies state by state. So does the amount of time people are allowed to claim it.

- This bill adds $600 per week from the federal government on top of whatever base amount a worker receives from the state. That boosted payment will last for four months.

- The legislation also adds 13 weeks of additional unemployment insurance. People nearing the maximum number of weeks allowed by their state would get an extension. New filers would also be allowed to collect the benefits for the longer period.

For example, if an out-of-work person is receiving the national average of about $340 per week, under the new federal program their take-home pay will be $940.

Gig Workers and Freelancer

Typically, Self-employed people, freelancers and contractors can't apply for unemployment. This bill creates a new, temporary Pandemic Unemployment Assistance program through the end of this year to help people who lose work as a direct result of the public health emergency.

Insurance Coverage

The bill requires all private insurance plans to cover COVID-19 treatments and vaccine and makes all coronavirus tests free.

Will Your Social Security Payments Be Interrupted?

There have been online rumors and scams regarding Social Security benefits. Social Security will continue to pay benefits. You can view the letter from the Social Security commissioner here. Be aware that scammers may try to trick you into thinking the pandemic is stopping your Social Security payments but that is not true.

 

Additional Resources

As a reminder, these are only some of the benefits listed. There are other benefits as well as items for small businesses, big businesses, and other areas. Below are some links to articles and additional resources that provide more detail.

Small business owners can apply for assistance from the Small Business Administration here.

 

Please feel free to contact us to discuss your financial situation or any of the topics discussed above. We are here to help!