COVID-19: Understanding the Stimulus Package
The Coronavirus (COVID-19) pandemic has put a major strain on every aspect of daily life around the world, including the United States. As spread of the disease shows no sign of slowing down, there is a steadily increasing concern in the U.S. regarding the health and wellness of not only citizens, but the economy. In response, Congress has negotiated and passed a historic $2 trillion stimulus package to address the havoc caused by the pandemic.
WHAT IS IN THE STIMULUS PACKAGE?
The $2 trillion stimulus package is the largest economic stimulus measure in modern history. The bill is a combination of tax provisions and other measures, including emergency business lending. The package promises to provide help for struggling American families and businesses, as well as health care workers on the front lines of the coronavirus outbreak.
Significant Provisions Affecting Businesses
The tax package itself is broad, with tax payment relief and significant business tax incentives. Here are a few of the most significant provisions affecting businesses:
- $367 billion will be made available in loans for small businesses and $150 billion for state and local governments. The loans will be forgiven so long as businesses pledge not to lay off their workers.
- Small businesses forced to suspend operations or that have seen gross receipts fall by 50% from the previous year will be eligible for a tax credit worth up to 50% of wages paid during the crisis, so long as they keep their workers employed throughout.
- The Treasury Department will distribute $500 billion in loans to struggling industries (e.g., passenger airlines and businesses critical to maintaining national security). Additionally, an oversight board and inspector general will be created to oversee loans to large companies.
- Health care providers will receive $100 billion in grants to help fight the coronavirus and make up for revenue lost by delaying elective surgeries and other procedures.
- Colleges and universities, as well as school districts, will receive more than $30 billion.
- Employers can defer the 6.2% tax they pay on wages used to fund Social Security.
Significant Provisions Affecting Individuals
The major piece of the individual tax changes will offer rebate checks based on a new tax credit of $1,200 per filing adult and $500 for each qualifying child. Additionally, unemployed individuals will receive an unprecedented expansion of benefits and payments.
Here are some of the significant provisions affecting individuals:
- Single Americans will receive $1,200, married couples will get $2,400 and parents will receive $500 for each child.
- Unemployed individuals, including freelancers and furloughed employees, will get an extra $600 per week for up to four months, on top of state unemployment benefits.
- The package also calls for a new pandemic unemployment assistance program, which will provide jobless benefits to those who are unemployed, partially unemployed or unable to work because of COVID-19 and don’t qualify for traditional benefits.
- The Department of Education will suspend payments for student loan borrowers without penalty through September 30.
- There will be housing protections against foreclosures on mortgages and evictions for renters. Anyone facing a financial hardship from the coronavirus will receive a forbearance on federally backed mortgage loans of up to 60 days. Those with federally backed mortgage loans who have tenants are not allowed to evict tenants solely for failure to pay rent for a 120-day period.
This stimulus package will have a far-reaching impact as it drives money toward workers, small businesses and industries that have been impacted by the economic downturn due to the pandemic. While this is a constantly changing situation, Exude is here to support you. For frequently updated resources and information, visit our dedicated COVID-19 page.