On March 27th, Congress passed the Coronavirus Aid, Relief, and Economic Security Act, otherwise known as the CARES Act. What does this mean for you and your family?
Below is a breakdown of a few highlights of the new Act to help you navigate important provisions that may provide financial relief during COVID-19. We recommend visiting the Internal Revenue Service’s website for complete and accurate information at www.irs.gov and your state-specific sites for additional information as well.
The Breakdown of This $2 Trillion Dollar Bill
- $290 billion in direct payments to eligible taxpayers
- $260 billion in expanded unemployment insurance
- $150 billion for state and local governments
- $510 billion in expanded lending for businesses and local governments
- $377 billion in new loans and grants for small businesses
- $127 billion for hospitals for ventilators and other equipment
What This Means For Your Household
One of the highlights of the CARES Act is the Economic Impact Payments program or better known as stimulus payments. This program will send direct payments to eligible U.S residents of $1,200 to individual or head of household filers earning up to $75,000 for individuals and $112,500 for the head of household filers. Couples earning up to $150,000 will receive $2,400 if they are married filing jointly and if they are not a dependent of another taxpayer and have a work-eligible Social Security number. Eligible families receive an additional $500 for each child under the age of 17.
For most Americans, no action is required. The IRS will use data from the most current tax returns or Social Security data to provide a rebate to Americans either via direct deposit (if such information is available) or through a paper check in the mail to the last known address on file. The IRS intends to distribute rebates to taxpayers who e-filed with direct deposit bank information beginning as soon as April 11, 2020. Taxpayers receiving rebate checks may have to wait six to eight weeks to receive a paper check in the mail.
ADDITIONAL UNEMPLOYMENT INSURANCE BENEFITS
Those receiving unemployment insurance through their states’ unemployment insurance programs will receive an additional $600 beginning the week ending on April 11, 2020. That’s in addition to unemployment insurance states already pay, which has been extended an additional 13 weeks.
For more information about this program and specifically, California’s response to COVID-19, may be found at edd.ca.gov/about_edd/coronavirus-2019.
NEW EMPLOYER TAX CREDITS
The CARES Act’s spending on businesses through various tax credits should encourage most businesses to rehire some of the record 3.3 million people who filed for unemployment insurance the week ending March 21, 2020 – and keep more workers on their payrolls in the weeks ahead. For more information go to irs.gov/coronavirus/new-employer-tax-credits.
Borrowers of federally backed home mortgages can request forbearance if they have been affected by COVID-19. If approved by the bank, the borrower won’t have to make mortgage payments for up to 180 days. The banks are not allowed to impose any penalties or other fees. Forbearance may also be extended up to another 180 days.
Forbearance does not erase what you owe. You will have to repay any missed or reduced payments in the future. So, if you can keep up with your payments, keep making them. The types of forbearance available vary by loan type as well. For more information, go to consumerfinance.gov/coronavirus/cares-act-mortgage-forbearance-what-you-need-know.
Additionally, for 120 days from the enactment of the Act (March 27, 2020), lessors of all properties backed by federal mortgage loans can neither evict tenants nor charge fees or penalties for the nonpayment of rent.
As this new environment continues to evolve, we will be here to keep you informed on all things real estate related and more!
Stay safe and find a little joy!
*A lot of the information from this post was found on: