How To Get Access to Your COVID Stimulus Money 

It’s the beginning of the month, and bills are coming due. If you are stressed out, it’s important that you know where and how to get access to financial relief. Please consider this not only for yourself, but for your adult children and elderly parents, too, even if you do not need it for yourself.

On March 27, President Trump signed a $2.2 trillion stimulus bill into law that will hopefully provide some relief for many, perhaps including you. The CARES Act (Coronavirus Aid, Relief, and Economic Security Act) sends money directly to Americans, expands unemployment coverage, and funds loans and grants for small businesses. So let’s look at how you can access these funds.

All eligible adults who have a Social Security Number, filed tax returns in 2018 and/or 2019 will automatically get a $1,200 direct stimulus deposit from the government within a particular income bracket. This is true whether you have been laid off, are currently employed, or are currently self-employed or an independent contractor.

To get the full amount:

• A single adult must have an adjusted gross income of $75,000 or less.
• Married couples with no children must earn $150,000 or less for a combined total stimulus of $2,400.
• Every qualifying child 16 or under adds $500 to a family’s direct stimulus.
• If you have filed as head of household, have dependents, and earned $112,500 when you last filed, you will get the full payment.

This payment is not considered income—it’s essentially free money from the government. Therefore, it will not be taxed. It also is not a loan, so if you are eligible, you will not be charged interest or expected to pay it back. As of right now, the stimulus is a one-time payment.

Payment decreases and eventually stops for single people earning $99,000 or more or married people who have no children and earn $198,000 annually. Additionally, a family with two children will no longer be eligible for payments if their income is over $218,000.

If you are an adult claimed on your parent’s tax return, you do not get the $1,200.

For most people, no action is necessary. If the IRS has your bank account information already, it will transfer the money to you via direct deposit. If, however, you need to update your bank account information, the IRS has posted on their website that they are in the process of building an online portal where you can do so.

An important note: if you have not filed a tax return in the past couple of years, or you don’t usually need to file one, you should file a “simple tax return” showing whatever income you did have, so you can qualify for these benefits.

You can continue to check for updates on how to make sure you get your payment by regularly checking for updates on their Coronavirus Tax Relief page.  https://www.irs.gov/coronavirus

Treasury secretary Steven Mnuchin says that he expects most people will get their payments by Friday, April 17th, though other sources say that it could take up to 4–8 weeks.

If you have a business, are an independent contractor or are self-employed, you can apply for loans, and get a $10,000 grant from the government via the CARES Act.

These are Economic Injury Disaster Loans (EIDL) and Paycheck Protection Program (PPP) loans. Please note that there are still elements of these loans that are not fully understood, and we are giving our best legal interpretation based on information from the Small Business Administration and the US Chamber of Commerce.

The CARES Act’s $350 billion allocation to small businesses is specifically called the Paycheck Protection Program (PPP). It specifically incentivizes borrowers who maintain their payrolls, i.e., don’t lay off their employees. This program will fully forgive loans where at least 75% of the forgiven amount is used to pay employees for the eight weeks following the loan. If you lay off employees or cut salaries and wages, your loan forgiveness will also be reduced.

PPP loans can be used to cover:

• Payroll costs,
• Group health care benefits during periods of paid, sick, medical, or family leave, and insurance premiums;
• Interest on a mortgage obligation,
• Rent, under lease agreements in force before February 15, 2020,
• Utilities, for which service began before February 15, 2020,
• Interest on any debt incurred before February 15, 2020.

Small businesses with less than 500 employees (including sole proprietorships, independent contractors, and those who are self employed) are eligible. You can apply through SBA 7(a) lenders, federally insured credit unions, or participating Farm Credit Systems (ie your bank). Other lenders might be on the scene soon as well, but a lot of them are currently being reviewed for approval to the program.

Full details are available here: https://www.sba.gov/funding-programs/loans/paycheck-protection-program-ppp

You can also see find a Paycheck Protection Application here, and be prepared when applications open on April 3rd to apply through your local bank: https://www.sba.gov/sites/default/files/2020-03/Borrower%20Paycheck%20Protection%20Program%20Application_0.pdf.

If you don’t qualify for stimulus money, all is not lost. There are several other ways that the CARES Act has made it easier for you to get a short term financial boost.

1. Unemployment

The CARES Act has also legally expanded unemployment benefits, expanding them for 13 more weeks and adding an additional $600 per week. Some self-employed, freelance, and independent contractors may be eligible, too. These benefits vary from state to state, and you can find how to apply at the Unemployment Benefits Finder site: https://www.careeronestop.org/LocalHelp/UnemploymentBenefits/find-unemployment-benefits.aspx?newsearch=true. Be sure to have your Social Security number, the Social Security numbers for dependents you are claiming, and your driver’s license or state ID handy while you apply.

2. Private Loans

If you’re in good standing with your bank, you may be able to get a “bridge loan” extended to you in order to cover your bills. Several major banks have set aside money specifically for the purpose of supplying these loans to customers that they deem eligible for them.

3. Retirement Account

If you don’t have another rainy-day savings account, the CARES Act waives the 10% penalty tax that you would normally get for withdrawing money early. The criteria is pretty open-ended, and applies to people who experience financial hardship because of COVID-19 in some way.