Quick breakdown of Stimulus Act:
For Individuals: 1. Stimulus a. $1,200 per adult and $500 per child under 16. i. Phaseouts: Single – 75,000 – 99,000 MFJ – 150,000 – 198,000 HOH – Max of 112,500 b. No check if you were claimed as a dependent – even if you are an adult c. If income in 2019 exceeds cap but in 2020 it does not, you will get the money when you file the 2020 return. d. Will be direct deposited in about 3 weeks with a paper notice to follow e. MUST HAVE filed for 2018. If you did not file, you should file now f. NOT TAXABLE g. Cannot be garnished for back taxes, student loans, etc. Can be garnished for child support. 2. Unemployment a. There will be an additional $600 added to the unemployment. b. Self employed at 1099 can now apply and will also get the additional $600 a week c. Part time workers can apply and also get the additional $600 a week d. Unemployment is extended by 13 weeks but total cannot exceed 39 weeks e. The additional $600 will end 7/31. f. If you quit because you were quarantined or because day care closed for your kids – you can collect unemployment. If you quit because you were afraid – you cannot. 3. Student Loans a. For Federal Loans – payments will be suspended until 9/30. NO INTEREST will accrue. 4. Retirement Accounts a. NO required minimum distribution requirements for 2020. b. IRA withdrawal up to $100,000 without penalty if related to outbreak. The taxes owed can be spread over 3 years and also the principal can be paid back over that time as well. c. Loan – Can take a loan with no limits on balance in account. SMALL BUSINESS: 1. Economic Injury Disaster Loan (EIDL) (SBA.gov) a. Up to $2,000,000 b. To pay a fixed debt, payroll, etc. c. 3.75% interest rate, payback up to 30 years d. 1-800-659-2955 or www.sba.gov for more info (very helpful site) and can apply online 2. EIDL Loan Advance a. For temporary loss of revenue b. Up to $10,000 can be deposited in 3 days c. Do NOT need to be repaid 3. Paycheck Protection Program – MUST BE DONE THROUGH YOUR BANK a. Can borrow up to 2.5x the payroll costs. Calculated as payroll costs less excluded payroll 1. Payroll costs – salary commissions etc 2. Excluded payroll – taxes, PFL, individuals making more than $100,000 3. BASED ON 1 year prior to loan b. MAY BE FORGIVEN IF: i. Maintain payroll during the crisis or restore afterwards ii. The amount spent equals 8 weeks of payroll following the loan iii. Payroll costs, interest on mortgage obligations, rent, utilities and tips also included iv. Forgiven amount may be reduced if number of employees decreases. **Below are links with more information regarding the Paycheck Protection Program:
https://www.rubio.senate.gov/public/_ cache/files/ac3081f6 -14ae-4e6f-9197172ede28badd/71AB6CB05A08E369E0D488A80B3874A5.faqs ---paycheck-protection-program-faqs-forsmall-businesses.pdf
https://www.uschamber.com/sites/default/files/023595_comm_corona_virus_smallbiz_loan_final_revised.pdf CAN ONLY DO THE EIDL LOAN ADVANCE OR THE PAYCHECK PROTECTION PROGRAM – NOT BOTH. Misc: 1. Charitable donations of up to $300 can be deducted from your gross income if you don’t itemize in 2020 2. You can now gift up to 100% of your income instead of 50% - must be a public charity and will be carried forward if exceeds 100%
*This is not intended to provide financial or legal advice. This is an interpretation of the Stimulus Act. Consult with your legal/financial professionals for the most accurate and up to date information.