Here's what the new coronavirus stimulus deal means for your wallet
After a months-long stalemate in discussions for the next coronavirus relief, Congress passed a $900 billion stimulus package last week and the president signed the bill on Sunday. The deal will help the millions of Americans struggling through the economic fallout of the pandemic.
There is relief for unemployed workers, lower-income families, renters, those facing food insecurity, and more. The bill also comes as the last remaining supports under the CARES Act that passed in March or from executive actions have expired or are set to expire by the end of the year.
Here’s what’s in the 5,593-page bill that could affect your personal finances.
Money for millions of Americans
There is a separate bill Congress is considering that would increase the stimulus checks to $2,000 per eligible person, but it hasn’t been passed by the Senate yet. Under the original legislation, direct payments to Americans will look like the following:
Stimulus check will be up to $600 per individual plus an additional $600 per child under the age of 17 based on their 2019 tax return.
Single filers who make below $75,000 and joint filers who earn less than $150,000 will get the full payments. Those above the income threshold may get a reduced payment. The phaseout thresholds changes depending on the number of children in the household.
Many of the payments could be distributed as early as the week beginning Dec. 28, directly deposited in bank accounts.
If not directly deposited, paper checks or debit cards will be mailed, which could take longer to get to Americans. Around 10 million are expected to be sent out every week between now and Jan. 15.
Social Security beneficiaries, Disability Insurance beneficiaries, Supplemental Security Income recipients, Railroad Retirement Board beneficiaries, and Veterans Administration beneficiaries all are eligible for the payment even if they didn’t file a 2019 tax return.
Help for jobless workers
Jobless Americans will get an additional $300 a week in Federal Pandemic Unemployment Compensation (FPUC) for 11 weeks ending March 14.
The Pandemic Unemployment Assistance (PUA) program, which currently provides benefits for over 9 million people who would not otherwise qualify for regular benefits, is also extended by 11 weeks until March 14.
The Pandemic Emergency Unemployment Compensation (PEUC) program will now add 24 additional weeks of benefits. Previously, it added just 13 weeks.
“Mixed-income” earners — who get traditional income reported on a W-2 and income from 1099 sources — may get an additional $100 a week if they have $5,000 of qualifying income.
Food assistance
Through June 30, 2021, the level of the monthly Supplemental Nutritional Assistance Program (SNAP) benefit increases by 15% based on the June 2020 Thrifty Food Plan.
States receive an additional $100 million for SNAP administrative costs through fiscal year 2021.
College students are eligible for SNAP benefits if they have a federal or state work-study program or are expected to contribute no income to their families.
The bill provides $5 million to expand the SNAP online purchasing program, including for farmers markets and direct marketing farmers, and to support mobile payment technologies and EBT.
The bill allocates $400 million to the Emergency Food Assistance Program through September 30, 2021. This federal program provides low-income Americans with emergency food assistance at no cost.
The bill provides $13 million to the Commodity Supplemental Food Program, which supplements the diets of low-income Americans who are 60 or older with nutritious food.
The legislation provides emergency relief to help school meal and child and adult care food programs.
The legislation directs the Department of Agriculture to create a food delivery task force for the WIC program, so participants can access curbside pickup and other safe methods during the pandemic.
Aid for renters
State and local governments get $25 billion to provide rental relief, including $400 million for U.S. territories and $800 million for Native Americans, Alaska Natives, and Native Hawaiians. These funds will be allocated within 30 days of the enactment of the legislation.
Renters are eligible for relief funds if:
Their household income doesn’t exceed more than 80% of the area median income (AMI);
One or more household members can demonstrate a risk of homelessness or housing instability;
One or more household members qualify for unemployment benefits or experienced financial hardship due, directly or indirectly, to the pandemic.
Rental assistance will first go to households with incomes that don’t exceed 50% of AMI and those with a household member who is unemployed and had been unemployed for 90 or more days.
Eligible renters will be able to get aid for rent and utility payments, unpaid rent or utility bills that have accumulated since the start of the pandemic, and other housing expenses that are directly or indirectly related to the pandemic.
The bill also provides services, such as case management and tenant-landlord mediation, up to 12 months to help renters remain housed.
Tax help
Earned Income Tax Credit and Child Tax Credit: Under the bill, a taxpayer can use either their 2019 or 2020 income to determine eligibility for these two tax credits. Generally, the lower the income, the smaller the size of these credits.
Payroll tax deferral: If you had Social Security tax-deferred in 2020 under the president’s executive action, you now until December 31, 2021, pay back the deferral. Before the bill, the deadline for repayment was April 30, 2021.
Charitable donations: Individuals can deduct up to $300 and joint filers can deduct up to $600 in charitable contributions for the 2021 tax year, even if they take the standard deduction.
Flexible spending accounts: Leftover balances on health care or dependent care flexible spending accounts, or FSAs, can now be rolled over to 2021 from 2020. Any unused money at the end of 2021 can also be rolled over into 2022.
Educator expense deduction: The bill directs the Treasury Secretary to issue guidance that says purchases since March 12, 2020 of personal protective equipment and other supplies that help prevent the spread of COVID-19 should be eligible for the educator expense deduction.
The coronavirus stimulus deal was attached to legislation to keep the government funded. That portion included the following tax changes that help Americans:
Medical expense deduction: Medical expenses now must exceed 7.5% of adjusted gross income to take this itemized deduction. That threshold was 10%.
Student loans: Through 2025, any employer payments for a worker’s student loans — up to $5,250 — is not to be counted as part of the employee’s taxable income.
Education benefit: The income threshold for the lifetime learning credit was increased, making it available to more taxpayers.
Denitsa, Dhara, and Stephanie are reporters for Yahoo Money and Cashay, a new personal finance website. Follow them on Twitter @denitsa_tsekova, @dsinghx, and @SJAsymkos.
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