Here is a limited summary of the massive $2.1 trillion bipartisan COVID-19 related relief legislation that was passed by Congress:
Direct Payments: Adults will receive a one-time direct deposit of up to $1,200, and married couples will receive $2,400, plus an additional $500 per child. The payments will be available for incomes up to $75,000 for individuals, $112,500 for heads of household, and $150,000 for married couples. These payments phase out completely at $99,000, $146,500, and $198,000 respectively. If you did not file a 2018 or 2019 tax return, or if you have moved since you last filed, you should immediately update your mailing address at www.irs.gov.
Paid Sick Leave: Employees and self-employed are allowed an additional 80 hours of paid sick leave to care for themselves and their family members. This paid leave is also available if you are required to be quarantined (which includes all of us now) of have children that have no school or day care. Employers are reimbursed for this added benefit via payroll tax credits.
Unemployment insurance: Unemployment benefits have been increased by an additional $600 per week for four months, on top of what state programs pay. It also extends UI benefits through Dec. 31 for eligible workers. The deal also applies to the self-employed, independent contractors, and gig economy workers, and it will pay you even if you have only lost a portion of your income due to the effects of COVID-19.
Use of Retirement Funds: The bill waives the 10% early withdrawal penalty for distributions up to $100,000 for coronavirus-related purposes, retroactive to Jan. 1. Withdrawals are still taxed, but the taxpayer can choose to spread out reporting of the income over three years (2020, 2021 and 2022), if helpful. Taxpayers are also allowed up to three years to roll the distribution back into the retirement account. Retirement plan loans are also increased to the lesser of $100,000 or 100% of your employer retirement account balance.
Small Business Relief: The Small Business Administration (SBA) has expanded their loans to businesses impacted by COVID-19. Companies with 500 employees or fewer that maintain their payroll during coronavirus can receive up to eight weeks of financial assistance through a Payroll Protection Program loan. If employers maintain payroll, the portion of the loans used for covered payroll costs, interest on mortgage obligations, rent, and utilities would be forgiven. There is also an Economic Injury Disaster Loan which can provide $10,000 in immediate and forgivable assistance.
Student Loans: You can suspend payments on your student loans until September 30th. Interest will not accrue and there are no negative credit ramifications. Even better, if you are on a repayment program that ends in forgiveness of the remaining balance of the loan after 10 or 20 years, you continue to accrue time towards completion while you are skipping payments.