The $2 trillion stimulus package is the largest economic stimulus measure in modern history, and is a combination of tax provisions and other stimulus measures including lending.
Three major provisions include:
Loans and Tax Credit Available to Small Businesses
The package creates a federally guaranteed loan program for small businesses that employ 500 or fewer people who must pledge not to lay off their workers. The loans will be available during an emergency period ending June 30, and would be forgiven if the business uses the funds for approved purposes and maintains the average size of its full-time workforce.
Additionally, small businesses forced to suspend operations or that have seen gross receipts fall by 50% will be eligible for a tax credit worth up to 50% of wages paid during the crisis, so long as they keep their workers employed through the crisis. The credit could be applied to all wages for employers with fewer than 100 employees, while the benefit is capped at $10,000 in wages per employee for larger employers.
Expansion of Unemployment Benefits
The package includes an expansion of unemployment benefits that will extend unemployment by 13 weeks and include a four-month enhancement of benefits. The enhanced benefits will provide an additional $600 per week on top of what state unemployment programs pay.
Note that many individuals who typically do not qualify for unemployment will qualify under the package, including independent contractors and self-employed individuals.
Individual Checks to Taxpayers
The package will provide direct payments to taxpayers based on the adjusted gross income found on their 2019 federal tax return. All US residents with adjusted gross incomes up to $75,000 ($150,000 for married couples) will get a $1,200 ($2,400 for couples) payment. Families will receive an additional $500 per child, as a way to create a safety net for those whose jobs and businesses are affected by the pandemic. However, the payments will start to phase out for individuals with adjusted gross incomes greater than $75,000. Those with incomes higher than $99,000 will not qualify for payments under the stimulus package.
Additional business provisions include:
- Health care providers will receive $100 billion in grants to help fight the coronavirus and make up for revenue lost by delaying elective surgeries and other procedures. $200 million will be carved out for the Federal Communications Commission to provide health care providers with connected devices to facilitate telemedicine services, with the goal of freeing up hospital beds. Another $25 million will go to a grant program that helps rural communities purchase broadband equipment for telemedicine.
- Employers can defer the 6.2% tax they pay on wages used to fund Social Security.
Additional individual provisions include:
- A new pandemic unemployment assistance program, which will provide jobless benefits to those who are unemployed, partially unemployed or unable to work because of COVID-19 and don’t qualify for traditional benefits.
- The Department of Education will suspend payments for student loan borrowers without penalty through September 30.
- There will be housing protections against foreclosures on mortgages and evictions for renters. Anyone facing a financial hardship from the coronavirus will receive a forbearance on federally backed mortgage loans of up to 60 days. Those with federally backed mortgage loans who have tenants are not allowed to evict tenants solely for failure to pay rent for a 120-day period.
Refer to the attached summary for additional detail and contact your NEEBCo representative with questions.
In The Know – Understanding the Historic $2 Trillion Stimulus Package