This week, Maggie is breaking down the CARES Act stimulus package and how it affects you as an individual.
On Friday, March 27th, 2020, Donald Trump signed the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act. This is a $2 trillion stimulus package, which is the largest relief bill ever passed in the United States. It surpasses the American Recovery and Reinvestment Act, which was signed by President Obama in 2009 as a response to the Great Recession, and the National Industrial Recovery Act that was signed in 1933 by President Franklin D. Roosevelt during the Great Depression.
To give you the highlights, here’s what you can expect:
You Likely Have a Check Coming In the Mail
You Don’t Have to Pay Federal Student Loans for Six Months
You Can Get More Money Through Unemployment
You Don’t Have to File Or Pay Your Taxes Until July
Your Health Insurance Company Must Cover COVID-19 Testing, Treatments, and Vaccines
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Maggie Germano (00:05):\ Hey there, and welcome to the money circle podcast. This week’s episode is brought to you by Stitcher premium. Now, when we’re all stuck at home is a great time to listen to some of your favorite shows. Ad-free was Stitcher premium. Some of my favorites are the neighborhood listens, scam goddess and Conan O’Brien needs a friend. Stitcher premium is only four 99 a month or 34 99 a year, but if you use the code money circle, you can get your first month for free. Go to stitcher.com/premium to sign up today. Thanks so much for tuning in this week. In case you’re a new listener, I’m your host Maggie Germano. Monies circle is a podcast for women who want to get their money right without being made to feel like failures. Each week I answer listeners’ money questions and interview amazing women who are lifting other women up with their own work.
\ Maggie Germano (00:52):\ Don’t forget to rate, review and subscribe in your podcasting app so that we can get more people to hear about this podcast and listen. This week. I’m here again to talk about the issue that’s on everyone’s mind, which is the Corona virus, coven 19 and how it has really turned into a global crisis after being ruled a global pandemic and how it’s really affecting our economies and our individual lives and how we’re able to get through basically. And this week I want to talk about the stimulus package that was passed by Congress and signed into law this past Friday. And what it actually means for us as individuals. There’s a whole lot of information going around out there and can be really tough to understand what actually affects us right now, what we actually need to know, what’s real, what’s not, what’s speculation. And so I thought going into detail about the individual aspects of this bill and how it effects us personally would be really helpful.
\ Maggie Germano (02:00):\ So like I said, on Friday, March 27th, 2020 Donald Trump signed the Coronavirus aid relief and economic security act, also known as the cares act. This is a $2 trillion stimulus package, which is the largest relief bill ever passed in the United States. It suppresses the American recovery and reinvestment act, which was signed by president Obama in 2009 as a response to the great recession and it’s bigger than the national industrial recovery act, which was signed in 1933 by president Franklin D Roosevelt during the great depression. I know that was a lot of words and I know that these bills are incredibly long and can be really difficult to understand and that’s why I’m here. I’m here to explain what the cares act actually means for you in your daily life. So I want to just say a couple of notes before I get started. This bill is 800 pages long.
\ Maggie Germano (02:53):\ I won’t be able to break down or understand every single detail in it. In the show notes at the blog post for this episode, I will link to more resources so that you can read more about the legislation in detail. I also want to say that I am not a policy expert. I did get my degree in political science, but I haven’t actually worked on the Hill at all during my career aside from a bit of environmental lobbying. I did in 2009 and 2010 however, I’ve been talking to my very smart policy expert friends and I’ve been reading a lot of articles written by other very smart people. So that is how I’ve gotten informed about this and I’ve used that to inform what I’m talking about today. So like I said, click through those links in the show notes once you’re done to get more information.
\ Maggie Germano (03:42):\ So here’s what you can expect things to the cares act, you likely have a check coming in the mail. One of the biggest purposes of the stimulus bill is to alleviate some financial strain during this health crisis. The bill allocates approximately $300 billion just for these checks. If you earn less than $75,000 and it’s as an individual or less than $150,000 as a family, you can expect to receive $1,200 per adult children. 16 and under will get $500 each. For example, if you are a family of four with less than $150,000 taxable income, you’ll receive 3,400 which is 1200 per adult and 500 per child. If you earn over $75,000 as an individual or 150,000 as a family, you are not out of luck. For every $100 you earn over 75,000 or 150,000 you will lose $5 of stimulus money. This decrease applies to children in those households as well.
\ Maggie Germano (04:48):\ This is capped for individuals making above 99,000 and couples making over 198,000 so even if you’re earning over those, those original cap amounts, you’ll still get something. It just decreases for every a hundred dollars over that amount that you earn. And if you’re curious as to how the earning threshold is actually measured, it’s measured by your adjusted gross income or AGI. AGI is the amount you earn each year after tax deductions, tax credits and exemptions. So, for example, if you’re F if you and your spouse have earned over $150,000 a straight up, like in your salaries, if you both earn 75 or more, you’re, that’s not actually where that threshold is being marked. You have to deduct any business expenses or tax deductions like the standard deduction or your home mortgage interest and things like that. So there are those deductions that do apply. You’re not going to be getting restricted based on the flat salary.
\ Maggie Germano (05:54):\ It’s, it’s after those deductions. So that’s something important to keep in mind. However, this does not apply to everyone. Unfortunately, specifically this benefit does not apply to undocumented folks in the United States. You must have a social security number to receive a check. If you do not, you will not be eligible. Green card holders can get a work eligible social security number. Uh, in order to learn more about that, you need to talk to your immigration attorney if you have one. I definitely don’t know very much about how you go about getting that and how long it takes. Um, but I do know that it is something that’s possible here or there are a few things to keep in mind. These checks are a onetime deal. You will not be receiving any further payments after this checks will be mailed out in about three weeks. If you have direct deposit set up with the IRS, you will get your money faster.
\ Maggie Germano (06:50):\ I will also link in the show notes to the website for how you can set up direct deposit with the IRS and that means that any refund or bill that you owe for your taxes will get uh, withdrawn or deposited directly through your bank account in the future as well. This money does not count as taxable income, meaning you will not have to pay taxes on it after all. Our tax money is how this bill is being funded in the first place. So you don’t have to worry that you’ll end up having to pay on that. The income amounts are also based on your most recent tax return. So if you haven’t filed yet for 2019 which a lot of us haven’t, the amount will be based on your 2018 tax return, so just because you haven’t filed in 2019 doesn’t mean that you won’t get a check.
\ Maggie Germano (07:36):\ They will base it off your income in 2018 another helpful tool that I will link to in the show notes is a calculator from the Washington post that helps you see if you’re eligible and for how much money. The next thing you should know is that you won’t have to pay your federal student loans for six months. Another huge piece of the stimulus bill is the suspension of federal student loan payments. Last week, the Trump administration announced that they were implementing 0% interest on all federal student loans and allowing borrowers to suspend payments for up to 60 days. However, this legislation has expanded upon this. Lenders have to immediately stop requiring payments and accruing interest on federal education loans. This will continue through September 30th, 2020 which is a full four months longer than the original suspension. Non-payment during this period cannot be used to affect credit scores or your student loan forgiveness qualification.
\ Maggie Germano (08:33):\ For those who are relying on student loan forgiveness programs, this suspension of payments will not hurt your eligibility according to the bill each month for which he’ll student loan payment was suspended, will be treated as if the borrower of the loan had made a payment. That means that these borrowers will not lose six payments out of the 120 payments they need in order to qualify for student loan forgiveness. That’s a huge bonus. The bill also suspends any wage garnishment or tax refund reduction for people who have defaulted on their student loans. If you already have your wages being garnished, this will be suspended for the next six months as well. There’s a couple things to keep in mind here. This is going into effect automatically. You do not have to do anything to make this payment suspension happen and that’s different than the original 60 days suspension.
\ Maggie Germano (09:23):\ With that original order, you had to contact your student loan provider and request for your payments to be suspended, but for this it’s happening automatically. Have you want to continue making payments? You can. If you can comfortably afford to do this, you will be doing it without any interest accruing, meaning your money will go much further for the next six months. So I believe you will also have to contact your student loan provider to do this yourself, whether it’s logging into your portal and making a payment every month manually or talking to your provider and asking for those auto pays to be set up again. But you, you do have to take that action to actually make the payments if you want to still do that. I also wanted to note that this rule does not apply to private student loans. You have to contact your private lender if you need to put your payments on hold and see if they’re offering any leniency.
\ Maggie Germano (10:18):\ They’re not being required to do that. So that’s something that’s not certain. So unfortunately if you have private loans and not federal loans, you’re not really being helped in this situation. The next thing you should know about the stimulus package is that you can get more money in support through unemployment. Just two notes before I go into detail on this piece. When it comes to unemployment, the details vary from state to state. In order to understand exactly what applies to you. If you need to file for unemployment, you’ll need to do your own research in your own state. I also wanted to say that I am not an unemployment expert nor an attorney, so I can’t give you specific unemployment advice. You should talk to the unemployment office in your own States or an attorney if you have questions about your specific situation. Okay. Now that that’s out of the way, I will dig in first, I’ll reiterate that unemployment benefits are managed by your individual state.
\ Maggie Germano (11:13):\ That will not change due to this legislation. The bill increases benefits and broadens who is eligible, but the States will continue to be the ones paying those who qualify about $250 billion of the $2 trillion in this bill goes to unemployment benefits. Specifically, here are the main details. Unemployment insurance is extended for 13 more weeks. Folks nearing the maximum number of weeks allowed by their state would still get this extension. So if you’re already on an unemployment and maybe you’re coming up to your States limit on how long you can use unemployment benefits, you will get this extension new filers. So people who are filing for unemployment now would be allowed to collect benefits for this longer additional period as well. The bill also adds $600 per week from the federal government on top of whatever base amount an individual receives from their state. This additional payment will last for the next four months.
\ Maggie Germano (12:09):\ So for example, if you are already receiving $400 a week from your state for your unemployment insurance, you will get an added $600 a week for four months. So you’ll be getting $1,000 a week for four months, which is huge. It will make a huge difference for people who are out of work right now. For part time workers who aren’t typically covered by unemployment benefits in their state. This bill expands coverage for them and they will also be eligible for the $600 federal weekly benefit. For those who are self employed or freelancers, unemployment benefits are not usually available. That’s always been a big problem for people who are freelancers or they maybe have their own business and something happens and they’re out of work. They’re not able to apply for unemployment insurance. However, under the cares act, a new temporary pandemic unemployment assistance program has been created.
\ Maggie Germano (13:08):\ This will exist through the end of 2020 to help people who lose work as a direct result of the COVID 19 crisis. You can only qualify for this if you have lost work specifically due to COVID 19 the next thing you should know is that you don’t have to file or pay your taxes until July. I spoke last week about how the federal tax filing date had been delayed until July 15th but that you would still have to pay what you owe by April 15th that has since changed due to this bill. Both the federal filing and payment dates are now July 15th, 2020 this also applies to estimated quarterly taxes. If you are a business owner free or a freelancer, this means that you have an extra three months to organize your documents to get your taxes in order. And it also gives you three more months to save up the amount that you might have to owe this bill.
\ Maggie Germano (14:01):\ However, it does not necessarily change the due date for your state taxes. Each state will decide that for themselves. Many of them are also extending to July 15th but you will have to check to be certain. Even with this delay, you can still file your taxes now if you want to, the return will still get processed once it’s received and any refund that you will be due will come to you over the next couple of weeks or months. There probably will be a delay since things are a little bit crazy right now and, and there’s a lot going on, but uh, you can still file if you feel like you want to get your refund sooner rather than later or you want to get it over with and pay what you owe, you can do that now as well. The last thing I want you to know for now is that your health insurance company must cover COVID 19 treatments and any vaccines under this bill.
\ Maggie Germano (14:55):\ All insurance companies are required to cover COVID19 related expenses. Like I said, this includes testing, treatment, and any eventual vaccine that is created. If your insurance company gives you any trouble, point them to this new requirement. If you don’t have insurance at the moment, see if your state has reopened the healthcare marketplace with a special enrollment period. Not all States have done this, but a few have and it makes it possible for you to get the coverage that you need in case you get sick. Of course, this bill is not a sweeping solution for everyone. There are a lot of people who will be left out. Anyone without a social security number or a work eligible social security number does not qualify. This means that any undocumented folks will not receive this money or other support. These are people, by the way, who are still most likely paying taxes on any income they’re earning.
\ Maggie Germano (15:45):\ Yet they won’t receive the benefits in this stimulus package. People who couldn’t afford to file their taxes in the last couple of years will also be impacted since the stimulus check is based on your most recent tax return. Plus people over the age of 16 who are claimed as dependents on their parents’ tax returns. Also don’t qualify for a stimulus check. You have to be under the age of 17 or filing your own tax returns as an individual, not as a defendant to receive a check. So obviously this wasn’t a perfect bill. A lot of people are still gonna fall through the cracks and don’t even get me started on the anti-choice language that was inserted into the bill by Republicans, but it was something that was done to help people and businesses during this difficult time. I hope that it helps you even just a little bit. I want to end by saying that all the information that I’ve mentioned only applies to individuals for small and large businesses and other entities.
\ Maggie Germano (16:44):\ There are additional benefits in the stimulus package. I won’t go into them this week, but you can learn more about them in an NPR piece that I will link to in the show notes. So I hope that this helped and I hope that you have a little bit more peace of mind understanding kind of what’s coming down the road. Uh, but if you’re still struggling, are you still worried, especially about money? I really want to provide you with the support and calm that you’re looking for during this difficult time. If you’re looking for more of that sense of control over your money right now, let’s talk. Send me an email [email protected] or schedule a free discovery call via my website. I will also put a link in the show notes for the next six weeks. I’m offering $50 off my one-time financial coaching session for anyone who books one as a small business owner, I unfortunately can’t offer my services for free, but I can offer a discount to make things just a little bit easier. I hope to hear from you and stay safe and stay home.
\ Maggie Germano (17:47):\ Thank you so much for listening this week. Don’t forget to rate, review and subscribe in your podcasting app so that more people will hear about this podcast and listen. If you’d like to get more connected with money, circle or with me, there are so many ways you can do that. So join the free Facebook group. Visit facebook.com/groups/moneycirclegroup. To stay informed of any upcoming events, subscribe to my weekly newsletter maggiegermano.com/subscribe. To sign up to attend the next money circle meet up, whenever that might be, visit Maggiegermano.com/moneycircle. To learn more about my financial coaching services, my speaking and workshop offerings, or just to read my blog, visit Maggiegermano.com. You can also follow me on Instagram and Twitter @MaggieGermano. Thanks so much for listening and stay healthy out there.
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