Relief Package 2.0 – by Cameron Lynch
The second coronavirus relief package is here, and we want to tell you all about it and what you can expect from an individual and business standpoint. We know it is so hard to keep up with the news, what is happening, and what we the people will get from this bill. This bill has been particularly hard to track with the back in forth in Washington about it, so we really want to break it down for everyone.
Individual Impact –
First let us look at this bill as an individual, and not a business. Individuals will receive a $600 direct payment and $600 for each dependent under 18 years of age. For a married couple the amount would be $1200 and $600 for every dependent child under 18 years of age. Now let us look and who will not be receiving a stimulus check, and where the caps are for those that will. First let us look at the caps for individuals, married couples, and heads of household. For individuals, the $600 will begin to phase out in value starting with someone who makes $75,000 per year. From there the $600 dollars will decrease based on how much you make over $75,000 a year and will completely vanish if you make $87,000 or more per year. For married couples, the starting figure is $150,000 annual gross income and it will completely vanish at $174,000. For Heads of household, the starting figure is $112,500 and it will completely vanish at $124,500. College students who are claimed as dependents on their parent’s tax returns will not receive a stimulus check. If that student is over age 18 then the parents will not receive an extra $600 stimulus check either. All these amounts and ages will be based on numbers for the year 2019.
Unemployment has been extended and a $300 bonus has been set in place. The unemployment bonus is on top of your base unemployment pay. For example, if you receive $150 base pay from unemployment then you will now receive $450 from unemployment. Taxes will be taken out if you have elected for them to do so. This extension will be for 11 weeks and will be cut off in March of 2021. The extension for unemployment is also for independent contractors, gig workers, and freelancers.
Individuals living arrangements-
This has been a very hard time for people and paying rent and utilities has been hard. This bill extends the eviction band so that no one can be evicted from their house, or apartment. This has been extended until January 31, 2021. This bill also provides $25 billion to state and local governments to help qualified renter households pay for rent and utilities. Assistance will be prioritized for renter households whose incomes do not exceed 50% of local area median income, as well as renter households who are currently unemployed and have been unemployed for 90 or more days. Financial assistance provided under this section is non-taxable for households receiving such assistance.
Businesses (PPP) –
Additional PPP is here. To qualify for this round of PPP you must be able to show a 25% reduction in revenue compared to the same quarter in 2019. For example, say you did $100,000 in quarter 4 in 2019, then in 2020 you will have needed to do $75,000 or less to be able to qualify for the second round of the PPP forgivable loan. The maximum loan size for second-time borrowers is $2 million. You can now deduct expenses that are paid using the PPP loan.
Right now, in Washington, they are voting on a separate bill to raise the amounts from $600 to $2,000 for a stimulus check. We have shared the information above based on what has been signed up to this date, but if that is to change, we will update everything based on those new numbers. We know all this stuff can get super confusing, so if you need help or even a better explanation for everything going on please do not hesitate to give SWVA Tax & Accounting a call today at (540)-250-3198. We’ll run the numbers, while you run the business.