Since it is now the second week of April, and this pandemic lock-down has been going on since mid-March, many regular people are quite stressed. They have either spent the last of their savings on paying their rent, so that it won’t be compounded when they are able to return to work. Or, they have foregone rent payments entirely, and their landlord is now upset with them.
This pandemic has affected everyone, from the poorest to the richest, though perhaps in different ways. From business bills that are not forgiven or deferred (storage units, phone lines, credit card bills, etc.) to groceries that you cannot buy because there is nothing left in the stores or because you don’t have enough money to buy without an income, you are affected.
Here is a brief guide to some of the benefits that ordinary Americans may qualify for under the new CARES Act that was passed last month.
First, and most importantly, is Pandemic Unemployment Assistance. This special unemployment benefit allows individuals who normally would not qualify for unemployment, to qualify.
This includes self-employed persons (defined as those who, if they weren’t working for themselves, would qualify for family and medical leave), gig workers, freelancers, and others. Basically, although the definitions are vague, if you would normally have to pay Self Employment tax (even if your losses prevent you from actually having to pay it), you would qualify for unemployment.
This is still administered by the states, so you need to apply through your states’ Department of Labor website. Most of the phone systems are not working, and it takes a long time for the benefits to be disbursed, so patience is crucial.
All unemployment recipients, including those already receiving assistance and those who newly qualify, will receive an additional $600 in benefits each week. The benefits have also been extended for an extra 13 weeks in all states, and this is paid for by the federal government through the CARES act.
If you are a member of one the groups newly eligible under the CARES act, then at first, your benefits will be denied, and this is a prerequisite to qualifying for PUA. The quicker you file, the quicker your application can be processed.
The second benefit, that we have all been hearing about, is the economic stimulus payment. This is a lump sum payment of $1,200 to all Americans with an income of less than $75,000 annually for single filers.
These payments are expected to start going out this week, and you must have your taxes on file from 2019 or 2018. Ideally, you need to have signed up for direct deposit on your taxes.
If you have a low income, and were not required to file taxes, you should file them right away. The IRS has already said that they have fewer workers due to the pandemic, so your payment might be delayed if you wait to file.
If you weren’t required to file taxes, that means that you would have had to have an adjusted gross income of less than $8,600. If your income was less than this amount, then the standard deduction would reduce your tax liability completely.
Just follow the instructions if you are unable to pay an accountant. You can also, in many cases, claim the EITC. Just fill in that field with “calculate.” You might be surprised and even get a small refund.
If you receive social security benefits, then you don’t have to worry, as the 1099 filed by the SSA will be used by the IRS to issue your payment.
Finally, the Paycheck Protection Act is available to most small businesses, those having less than 500 employees. In order to qualify, you must not have laid off your workers, and you must continue to keep them employed throughout the pandemic.
If you have already furloughed or laid off workers, then you may not be able to get this loan. However, if after receiving the loan, you use it to pay those employees, then you should qualify. If you are issued this special loan for payroll only, then when you prove that you haven’t laid off any of your workforce, or that you have continued to pay your workers even though they aren’t working due to COVID-19, this loan would be forgiven in full.
This loan is being administered by the Small Business Administration, but local banks are taking the applications. Be sure to call them first, as many of them have reduced in-bank staff, and may only have drive-thrus open without an appointment.
If you are a low income family, please see our upcoming article on ways that you can keep your family fed during this pandemic.