What’s in the Economic Relief Package. And When Do I Get my Check?

On Friday, March 27, 2020, Congress passed—and President Trump signed into law—a $2 trillion economic relief package to assist American households during the coronavirus crisis.  The Coronavirus Aid, Relief and Economic Security Act (CARES Act), was passed, in part, to provide financial relief to individuals and small businesses; it also provides financial assistance for hospitals and health care and to large corporations and state and local governments. 

Provisions affecting individuals include:

Direct Payments:  The CARES Act provides direct payments in the amount of $1,200 to individuals with an adjusted gross income of $75,000 or less and $2,400 for married couples with an adjusted gross income of $150,000 or less, plus $500 per qualifying child.  Payments are reduced by $5 for each additional $100 of adjusted gross income, phasing out at $99,000 for individuals and $198,000 for couples.  You can find your adjusted gross income on line 8b of the 2019 1040 federal tax return.

To be eligible for direct payments, one must have a social security number (exceptions are included for military members), not be claimed as a dependent on someone else’s tax returns, and, likely, need to have filed 2018 taxes (if you have not done so, you should do so as soon as possible).  No sign-up is needed.

When are payments to be made?  The short answer is it depends.  The government will send payments via direct deposit to those who have provided banking information with previous tax filings and plans on setting up a web-based application for those who have not yet done so.  Checks requiring mailing will take longer.  Treasury Secretary Steven Mnuchin stated that he expects payments to start being delivered within three weeks of the signing of the legislation.  Some, however, anticipate it taking longer based upon past government direct payments.    

Enhanced Unemployment Benefits:  The CARES Act provides $250 billion for an extended unemployment insurance program, which includes an expansion of unemployment insurance benefits for Marylanders.  The law expands eligibility to certain categories of workers not previously covered by unemployment insurance, such as independent contractors, the self-employed, and gig-economy workers, and provides eligible workers with additional cash benefits and an extension of benefits through December 31. 

For more information click here for the Maryland Department of Labor, Division of Unemployment Insurance. 

COVID-19 Testing & Vaccinations:  Testing and potential vaccines for COVID-19 will be covered at no cost to patients.

Borrowing from Retirement Plans:  The CARES Act increases the total amount one may borrow from retirement accounts from $50,000 to $100,000.  Further, it waives the 10% early withdrawal penalty for distributions up to $100,000 for coronavirus-related purposes, as long as distributions are paid back within three years.

Required Minimum Distributions (RMDs):  The CARES Act suspends RMD (at age 72) from IRAs and 401(k) plans.

Want More Information?

Looking for a coronavirus stimulus payment calculator?  Check out the Washington Post’s here (no pay wall).

The New York Times FAQs regarding the CARES Act can be found here.

Want to read the full CARES Act text?  Here it is.

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