The stimulus package: what the new deal offers

In the United States, lawmakers agreed to issue stimulus payments of $ 600 and distribute a federal unemployment benefit of $ 300 for 11 weeks. But that money will take time to arrive.

Another dose of aid is finally on the way for the millions of Americans facing financial difficulties due to the coronavirus pandemic.

On Sunday, U.S. Congressional leaders from both parties announced a financial aid package to provide a round of $ 600 stimulus payments to most Americans and will partially restore the enhanced federal unemployment benefit, offering $ 300. for 11 weeks. The agreement also contains provisions related to student loans, rental assistance, and medical bills.

President Donald Trump threatened Tuesday night to derail the process, saying he wanted Congress to amend the legislation to replace the provision that called for the $ 600 stimulus payments to be replaced by $ 2,000 checks. Whether lawmakers will do so, and how that change could disrupt the disputed agreement that led to the measure’s passage, was not immediately clear.

The legislation, which is 5,600 pages long, will give many people welcome, albeit temporary, help. However, how quickly the money reaches your pocket will depend on several factors.

Here’s a closer look at what the latest legislative package will mean for you. This article will be updated as more details of the agreement become available.

Adult individuals with adjusted gross income on their 2019 tax returns of up to $ 75,000 per year would receive a payment of $ 600, heads of the household up to $ 112,500, and a partner (or someone whose spouse died in 2020) earning up to $ 150,000 dollars a year would receive double that amount. If they have dependent children, they would also receive $ 600 for each child.

People with incomes just above these levels would receive a partial payment that decreases by $ 5 for every $ 100 of income.

Did you earn much less money in 2020 than in 2019, making you eligible for this new payment even though your income in 2019 makes you appear ineligible? When you file your 2020 return, there will be a way to claim this money in the form of a refundable tax credit.

Treasury Secretary Steven Mnuchin told CNBC on Monday that he expected the first payments to come out before the end of the year. But it will take a while for all eligible people to receive their money.

When stimulus checks were approved under the Coronavirus Relief, Relief, and Economic Security Act (CARES) earlier this year, it took about two weeks for payments to begin coming through a direct deposit. But those who received their payments by another method often had to wait much longer.

Yes, for many beneficiaries. For the first round of payments, the government also issued payments by paper check and prepaid benefit cards.

You can claim what is known as a “recovery refund credit” when you file your tax return for 2020. The Internal Revenue Service has a page in Spanish on its website that explains the details.

If they are 17 or older, they will not be entitled to a payment and you will not be able to collect support on their behalf

In the spring, that situation usually prevented either member of the couple from being paid. Now, if two people are married filing their taxes jointly and only one spouse has a social security number, the couple would be eligible for a single payment of $ 600. Each of your children with a social security number would also be eligible for the $ 600.

This change would be retroactive, meaning they could use their 2020 tax return to claim the payment they missed in the spring.

Legislators agreed to extend the time people can collect unemployment benefits and restart an additional federal benefit that is provided in addition to the regular state benefit. But instead of $ 600 a week, it would be $ 300. That would last until March 14.

Everyone eligible for unemployment benefits will receive an additional 11 weeks, although the new federal extensions would disappear after April 5.

This includes people who receive benefits at the state level, as well as individuals who receive checks through the so-called Pandemic Unemployment Assistance program, which had been scheduled to run out on December 26. The Pandemic Unemployment Assistance program covers the self-employed, temporary workers, those who work part-time, and others who are not normally eligible for regular unemployment benefits.

Here’s how the extension would work in practice: Most states pay subsidies for 26 weeks, although some offer less. After that, the CARES Act extended benefits for 13 weeks. The latest package would add 11 more weeks, bringing the total extension to 24 weeks for anyone receiving state benefits or pandemic unemployment assistance. This federal extension would be deactivated on March 14, unless maximum benefits have not been reached. In that case, the benefits would continue until April 5.

(During periods of high unemployment, your state may also offer its own extended benefits program. Extended benefits typically last half the length of the state’s standard benefit period, but can be longer in some locations.)

Everyone who qualifies to receive unemployment checks will also receive an extra payment of $ 300 per week. The so-called federal Pandemic Emergency Unemployment Compensation benefit will be paid for 11 weeks, from the end of December to March 14.

That’s less generous than the first package, which gave an extra $ 600 a week to all workers who qualify for statewide benefits or equivalent. That extra payment ran out in July, though President Donald Trump later issued a memorandum making another $ 300 available for about six weeks.

There is a provision to assist the unemployed who have a mix of income from both self-employment and wages paid by other employers. These people are often caught with a lower state-issued benefit based on their (lower) wages.

The settlement would seek to ameliorate that problem by providing an additional federal benefit of $ 100 a week to individuals who have earned at least $ 5,000 a year in self-employment income but are disqualified from receiving a more generous Benefit Assistance benefit. Unemployment in the event of a Pandemic because they are eligible for state benefits. Let’s say a person earned the majority of their income from large freelance film jobs but received less income from working in restaurants when they were not on a film project. These workers would qualify for lower benefits statewide based on restaurant work.

The $ 100 weekly payment would be in addition to the $ 300 weekly federal subsidy and would also come to an end on March 14. This benefit will only take effect after your state reaches an agreement with the Department of Labor.

If your benefits have already run out, experts said check your state’s website for more information on whether you’ll be required to do anything to receive the additional 11 weeks of help. States are likely to reinstate them automatically, but you may need to wait at least a few weeks.

“You may have to wait until well into January to access benefits that stopped at the end of December,” said Michele Evermore, senior policy analyst for social security at the National Employment Bill. “If Congress approves the aid, it has historically been structured so that its benefits are restored as of the date of enactment. So there shouldn’t be a gap in your eligibility if that happens, just a gap in when you get paid. “

Hundreds of thousands of people are estimated to have been overpaid from the Pandemic Unemployment Assistance program, in large part due to clerical errors that occurred while trying to quickly issue benefits using an entirely new program. The federal guidance changed three times, experts say, and mistakes were inevitable. Some people were overpaid thousands – perhaps even tens of thousands – of dollars.

The problem now: Even when the state is guilty of an overpayment, the beneficiary is still generally liable. And states often collect what is owed by automatically withholding a portion of a person’s benefit.

The more recent legislation would fix it by giving states the discretion to waive overpayments when honest mistakes were made that could be difficult for the applicant to pay, Evermore said.

The deal would provide $ 25 billion to be distributed through state and local governments to help tenants who have fallen behind.

To receive assistance, households would have to meet several conditions , according to a congressional aide: Household income (for 2020) cannot exceed 80 percent of area median income; at least one member of the household must be at risk of homelessness or housing instability; and individuals must qualify for unemployment benefits or have experienced financial hardship – directly or indirectly – due to the pandemic.

The agreement said that priority would be given to assistance for families with the lowest incomes and who have been unemployed for three months or more.

Diane Yentel, executive director of the National Low-Income Housing Coalition, said more than 500 emergency programs have been created during the pandemic and many of them would use their share of the money to replenish their funds. The advocacy group has a map and database of such programs on its website.

The agreement would extend the moratorium on tenant evictions until January 31.

The Trump administration, through an order from the Centers for Disease Control and Prevention, had already extended a previous eviction ban until the end of the year. The agency said the moratorium was necessary to prevent tenants from ending up in shelters or other crowded conditions, which would put them at greater risk of contracting the coronavirus.

The new agreement simply extends that order. To be eligible, tenants must have experienced a “substantial” loss of family income, suffered a layoff, or “extraordinary” medical expenses that they had to pay out of pocket, among various other conditions, and cannot expect to earn more than $ 99,000. in 2020 (or $ 198,000 for married people filing jointly).

Tenants can use a form on the CDC website to certify their eligibility; More information on eligibility can be found here.

Not in this deal, according to aides in Congress. The pause in payments initiated in the CARES Act has already been extended until January 31 by the Department of Education.

A similar extension seems likely after President-elect Joe Biden takes office, given his past support for student loan forgiveness initiatives. Stay tuned to your loan servicer website for updates on how you could handle any uncertainties in January.

Yes, according to a summary provided by Senator Lamar Alexander, R-Tennessee. The federal government pays interest for students who qualify for subsidized loans while they are in school but cuts it if they take too long to complete their studies. Now there would be no time limit.

It should be much simpler, starting July 1, 2023.

Retiring Senator Alexander has long sought to reduce the number of questions on the complicated form students must fill out to qualify for aid, including federal loans and Pell Grants for low-income students.

The new FAFSA form, which up to 20 million people fill out each year, would lose two-thirds of their questions, going from 108 to no more than 36. The dreaded “expected family contribution” figure will cease to exist, and something called a “family contribution rate. help the student ”will take its place. The new calculations appear set to make things easier and potentially more generous for many low-income students.

Yes. After years of efforts by advocacy groups and some senators, prisoners would once again have the right to use them for higher education.

The general eligibility rules will be simplified as well, which means that more people will qualify and qualify for the maximum grant.

The agreement would make these types of medical bills illegal. These bills often appear after an out-of-network provider unexpectedly becomes involved in caring for a patient, such as emergency room doctors, anesthesiologists, and ambulances.

For example, patients may go to a hospital that accepts their insurance, but once there they receive treatment from an emergency doctor who does not accept it. These doctors often bill these patients high fees, much higher than what health plans typically pay.

Under the new law, instead of simply charging patients, healthcare providers will now have to work with insurers to establish a fair price. The new changes will take effect in 2022 and will apply to doctors, hospitals, and air ambulances, but not to ground ones.

There is a modification to the earned income tax credit.

For the tax return you file for 2020, you will be able to use the money you earned as of 2019 for qualifying purposes instead of 2020 for both the earned income tax credit and the refundable portion of the child tax credit, depending on a Democratic Party summary of the bill.

That could allow other people who may have lost their eligibility due to losing their job or working fewer hours this year to maintain their eligibility.

Yes. Now, if your employer allows it, you could roll over unused money from health care or dependent care and use it in 2021. The same goes for unused money from 2021 that you want to roll over to 2022. The law also allows employers to raise the last eligible age for dependent child care to 13, from 12, for the 2020 plan year.

Yes, but now you can do it for all of 2021, once the bill passes.

The aid agreement is not the only way the government has tried to offer assistance. Other rescue measures remain in force and some have already been expanded.

MORTGAGE INDEMNITY If you have difficulty making your payments, you may qualify for a forbearance, which allows homeowners to temporarily stop or reduce payments for up to 180 days (after that, homeowners can request an additional 180 days). These rules, which apply to mortgages backed by the federal government, remain in effect as part of the CARES Act relief package, passed in March.

But the rules vary a bit, depending on the type of mortgage you have.

If your loan is backed by Fannie Mae or Freddie Mac, the two government-sponsored entities, there is no precise end date for the policy – regulators will cancel it when deemed appropriate. But homeowners with loans insured by the Federal Housing Administration should contact their manager and request an initial forbearance for COVID-19 on or before February 28. That date had been set to expire on December 31, but a postponement was announced on Monday.

Any missed payments are not forgiven and, eventually, must be returned. But if borrowers can’t make the extra payments right away, they may be eligible to delay what they owe until the home is sold, refinanced, or when the loan period ends.

The situation is murkier for borrowers with private mortgages. They are not covered by the same protections, although some providers have extended similar help.

PROTECTION AGAINST FORECLOSURE Single-family homeowners with loans backed by Fannie Mae or Freddie Mac would be protected from foreclosure until at least January 31, 2021, regulators said this month. The moratorium was scheduled to expire at the end of December.

People who live in properties that Fannie or Freddie have taken over because the owner could not pay the mortgage are also protected; the moratorium on evictions have also been extended.

The Federal Housing Administration, which often ensures loans to borrowers who make smaller down payments, said Monday that it would extend its foreclosure and eviction moratorium until February 28. It had been established that it would expire on December 31.

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