Another dose of relief is finally on the way for the millions of Americans facing financial distress because of the coronavirus pandemic.
Congress on Monday night passed an economic relief package that will provide a round of $600 stimulus payments to most Americans and partly restore the enhanced federal unemployment benefit, offering $300 for 11 weeks. The agreement also contains provisions related to student loans, rental assistance and medical bills.
The legislation, which is 5,600 pages long, would provide welcome, albeit temporary, assistance to many. How quickly the money reaches your pocket will depend on several factors, though.
Here’s a closer look at what the legislative package will mean for you. This article will be updated as more details from the measure become available.
Will I receive another stimulus payment?
Individual adults with adjusted gross income on their 2019 tax returns of up to $75,000 a year would receive a $600 payment, and heads of households making up to $112,500 and a couple (or someone whose spouse died in 2020) earning up to $150,000 a year would get twice that amount. If they have dependent children, they would also get $600 for each child.
People with incomes just above these levels would receive a partial payment that declines by $5 for every $100 in income.
Did you make much less money in 2020 than 2019, thus making you eligible for this newest payment even though your 2019 income makes you appear ineligible? When you file your 2020 return, there will be a way for you to claim this money then in the form of a refundable tax credit.
When might my payment arrive?
Treasury Secretary Steven Mnuchin told CNBC on Monday that he expected the first payments to go out before the end of the year. But it will be a while before all eligible people receive their money.
When stimulus checks were approved this year under the CARES Act, it took about two weeks for payments to begin landing via direct deposit. But people who received their payments by another method often had to wait much longer.
Will it be direct-deposited, as it was last time?
For many recipients, yes. For the first round of stimulus, the government also issued payments via paper check and prepaid benefit cards.
What if I still haven’t received my previous stimulus payment or got only part of it?
You can claim what is known as a “recovery rebate credit” when you file your 2020 tax return. The Internal Revenue Service has a page on its website that explains the details.
What about older children whom I claim as dependents?
If they are 17 or older, they will not be eligible for a payment and you cannot collect one on their behalf.
What if I’m a citizen married to someone who is not and uses an Employer Identification Number instead of a Social Security Number?
In the spring, that usually meant that neither of you was eligible for payments. Now, when two people are married and filing their taxes jointly and only one spouse has a Social Security number, they would be eligible for a single $600 payment. Each of their children with Social Security numbers would also be eligible for the $600.
This change would be retroactive, which means that you could use your 2020 tax return to claim the payment that you did not get in the spring.
What would the agreement do?
Lawmakers agreed to extend the amount of time that people can collect unemployment benefits and restart an extra federal benefit that is provided on top of the usual state benefit. But instead of $600 a week, it would be $300. That would last through March 14.
How do the benefit extensions work?
Everyone eligible for unemployment benefits would receive an extra 11 weeks, although the new federal extensions would go away in full after April 5.
The extensions apply to people receiving state-level benefits as well as individuals receiving checks through the so-called Pandemic Unemployment Assistance program, which had been scheduled to run out on Dec. 26. P.U.A. covers the self-employed, gig workers, part-timers and others who are typically ineligible for regular unemployment benefits.
Here’s how the extension would generally work in practice: Most states pay benefits for 26 weeks, though some offer less. After that, the CARES Act had extended benefits by 13 weeks. The latest package would tack on 11 more weeks, bringing the total extension to 24 weeks — for anyone receiving either state benefits or pandemic unemployment assistance. This federal extension would turn off on March 14, unless you haven’t already reached your benefit maximum. In that case, the benefits would continue to April 5.
(In periods of high unemployment, your state may also offer its own extended benefit program. Extended benefits usually last for half the length of the state’s standard benefit period, but may be longer in some places.)
What about the extra $300?
Everyone who qualifies for unemployment checks will also get an additional weekly payment of $300. The so-called Federal Pandemic Unemployment Compensation benefit will be paid for 11 weeks, starting after Dec. 26 and through March 14.
The supplement is less generous than what was offered under the CARES Act, which granted an extra $600 a week to all workers who qualified for state-level or equivalent benefits. That extra payment ran out in July, although President Trump later issued a memo making a further $300 available for about six weeks.
Will anything else change?
There is a provision to help unemployed people who have a mix of income from both self-employment and wages paid by other employers. These people are often stuck with a lower state-issued benefit based on their (lower) wages.
The agreement would try to ameliorate that problem by providing an additional federal benefit of $100 weekly to individuals who have earned at least $5,000 a year in self-employment income, but are disqualified from receiving a more generous Pandemic Unemployment Assistance benefit because they’re eligible for state benefits.
Let’s say a person earned most income through larger freelance jobs from movies, but took lower-paying jobs at restaurants in between. Such a worker would qualify for lower, state-level benefits based on the restaurant work.
This $100 weekly payment would be added to the $300 weekly federal benefit, and would also end on March 14. The benefit will begin only after your state reaches an agreement with the Labor Department.
How long will I have to wait for benefits?
If your benefits have already run out, experts said to check your state’s website for further instruction about whether you’ll be required to do anything to receive the extra 11 weeks of aid. The states will probably reinstate them automatically, but expect to wait at least a few weeks.
“You may have to wait through part of January to get access to benefits that stopped at the end of December,” said Michele Evermore, a senior policy analyst for social insurance at the National Employment Law Project. “If Congress passes relief, it has historically been structured so that your benefits are restored beginning the date of enactment. So there shouldn’t be a gap in your eligibility if that happens, just a gap in when you get paid.”
What if my unemployment agency says I’ve been paid too much?
Hundreds of thousands of people are estimated to have been overpaid by the Pandemic Unemployment Assistance program, in large part because of administrative errors that occurred while trying to quickly push benefits out using a new program. Federal guidance changed three times, experts said, and mistakes were inevitable. Some people were overpaid thousands — maybe even tens of thousands — of dollars.
The problem now: Even when the state is at fault for overpayment, the recipient is still generally responsible. And states often collect what’s owed by automatically withholding a portion of a person’s benefit.
The latest legislation would fix that by giving states the discretion to waive the overpayments when honest mistakes were made that could be painful for the claimant to repay, Ms. Evermore said.
Housing and Bills
I am behind on my rent or expect to be soon. Will I receive any relief?
The agreement would provide $25 billion to be distributed through state and local governments to help renters who have fallen behind.
To receive assistance, households would have to meet several conditions, according to a congressional aide: Household income (for 2020) cannot exceed more than 80 percent of the area median income; at least one household member must be at risk of homelessness or housing instability; and individuals must qualify for unemployment benefits or have experienced financial hardship — directly or indirectly — because of the pandemic.
The agreement said assistance would be prioritized for families with lower incomes and that have been unemployed for three months or more.
Diane Yentel, chief executive of the National Low Income Housing Coalition, said that more than 500 emergency programs had been created during the pandemic, and that many of them would use their share of the money to replenish their funding. The advocacy group maintains a map and database of such programs on its website.
What about rental evictions?
The agreement would extend a moratorium on renter evictions through Jan. 31.
The Trump administration, through an order from the Centers for Disease Control and Prevention, had already extended a previous eviction ban through the end of the year. The agency said the moratorium was needed to prevent renters from ending up in shelters or other crowded living conditions, which would put them at higher risk of contracting the coronavirus.
The new agreement simply extends that order. To be eligible, renters must have experienced a “substantial” loss of household income, a layoff or “extraordinary” out-of-pocket medical expenses, among several other conditions — and they can’t expect to earn more than $99,000 in 2020 (or $198,000 for married people filing their tax returns jointly).
Renters can use a form from the C.D.C.’s website to attest to their eligibility — more information on eligibility can be found here.
Student Loans and Higher Education
Are there any changes to the federal student loan forbearance program?
Not in this agreement, according to congressional aides. The pause on payments began via a provision in the CARES Act. This month, the Education Department extended it by a month to Jan. 31.
A similar extension seems likely after President-elect Joseph R. Biden Jr. takes office, given his past support for student loan forgiveness initiatives. Keep an eye on your loan servicer’s website for updates on how it might handle any uncertainty in January.
Are there any changes in interest rate policies?
Yes, according to a summary provided by Senator Lamar Alexander, Republican of Tennessee. The federal government makes the interest payments for students who qualify for subsidized loans while they are in school, but it cuts them off if it takes too long for them to finish. Now, there would be no time limit.
What about changes to the Free Application for Federal Student Aid (FAFSA)?
It should be a lot simpler, starting July 1, 2023.
Mr. Alexander, who is retiring, has long sought to reduce the number of questions on the notoriously complicated form, which students must fill out to qualify for aid including federal loans and Pell grants for low-income students.
The new FAFSA, which as many as 20 million people fill out each year, would lose two-thirds of its questions, going from 108 to no more than 36. The dreaded “expected family contribution” figure will cease to exist, and something called the “student aid index” will take its place. The new calculations seem poised to make things easier and potentially more generous for many lower-income students.
Did Pell grants get more generous?
Yes. After years of efforts by advocacy groups and some senators, prisoners would again be eligible to use them for higher education.
Overall eligibility rules will get simpler, too, which means more people would qualify — and qualify for the maximum grant.
Other Forms of Help
What happened with surprise medical bills?
The agreement would make these kinds of medical bills illegal. These bills typically surface after an out-of-network provider is unexpectedly involved in a patient’s care — think emergency room physicians, anesthesiologists and ambulances.
Patients might go to a hospital that accepts their insurance, for example, but get treated there by an emergency room physician who doesn’t. Such doctors often bill those patients for large fees, far higher than what health plans typically pay.
Under the new law, instead of charging patients, health providers will now have to work with insurers to settle on a fair price. The new changes will take effect in 2022, and will apply to doctors, hospitals and air ambulances, though not ground ambulances.
What about taxes?
There’s a change to the earned-income tax credit.
For the tax return you file for 2020, you would be able to use the money you earned from 2019 for qualification purposes instead of 2020, both for the earned-income tax credit and the refundable portion of the child tax credit.
That could allow additional people to maintain eligibility who might have lost it because they lost their job or worked fewer hours this year.
I have unused flexible spending account money. Any relief there?
Yes. Now, if your employer allows it, you could carry over unused health care or dependent care money and use it in 2021. Ditto for unused 2021 money that you wish to carry over into 2022. The law also allows employers to raise the last eligible age for children’s dependent care to 13, from 12, for the 2020 plan year.
I deferred making my payroll tax payments the last few months. Do I still have to make them up?
Yes, but you can now do so over all of 2021.
In March, there was an initiative to keep people from losing broadband access. Is there any update on assistance for consumers?
In March, the Federal Communications Commission urged broadband providers not to cut off customers for nonpayment. Companies may still be offering some leniency.
But the new bill would also offer up to $50 per month in assistance (or $75 for people living on tribal land) to tens of millions of people with low incomes, including households with a Pell grant recipient or a child qualifying for free school lunch. Also eligible: Everyone who can document a “substantial” decline in income due to a job loss, furlough or successful unemployment benefits application.
It will take at least 60 days for regulators to set rules for the benefit, and it will last only as long as the $3.2 billion in allocations does. If you think you might be eligible, start asking your broadband provider about it in January.
Has any paid family and sick leave been extended?
Partially, but mostly for self-employed people.
Self-employed workers can continue to claim a tax credit — created under a prior relief law — for a certain amount of sick days or time taken off to care for children or family members (for specific reasons). The bill doesn’t add any days, but lets those workers take any unused time through March. They can also now choose to use their 2019 income instead of 2020 to compute the credit, if that works to their advantage.
There is less for other workers. Under the earlier law, small and midsize employers were required to temporarily provide paid sick and family leave to workers, up to certain limits and for specific coronavirus-related reasons, through the end of the year. The latest bill doesn’t extend that mandate, but allows an eligible employer to be fully reimbursed for the costs of unused leave through March, in the form of a refundable payroll tax credit.
“It essentially returns workers to the position they were in prior to the pandemic with respect to access to legally required leave,” said Vicki Shabo, senior fellow on paid leave strategy at New America, “but offsets costs for employers with fewer than 500 employees who choose to continue to follow the policy.”
Are there any protections for bankruptcy filers?
Yes. Consumers filing for bankruptcy under Chapter 13, which requires a partial repayment of their debts, can still have their remaining debt discharged even if they fall behind on three or fewer home mortgage payments (on March 13 or later).
The same goes for consumers who have temporarily stopped making mortgage payments through a forbearance. Some bankruptcy courts argue that consumers can be denied a discharge if they are not current on their mortgage, even if they are otherwise up to date on other payments under their bankruptcy plan, said John Rao, an attorney with the National Consumer Law Center.
The bill provides other protections: People who have filed for bankruptcy or who have already received a discharge cannot be denied a mortgage forbearance or eviction protection created under the CARES Act.
Filers can also have their utility service maintained or restored without paying a deposit, Mr. Rao said.
All of these provisions expire a year after the bill is enacted.
Anything for educators?
Personal protective equipment and other supplies used to prevent the spread of Covid-19 can be applied toward the educator expense deduction of $250. It’s retroactive to March 12, 2020.
Catch Me Up on Everything Else
The relief agreement isn’t the only way the government has been trying to offer help. Other relief measures are still in effect, and some have already been extended.
MORTGAGE FORBEARANCE If you’re struggling to make your payments, you may qualify for a forbearance, which allows homeowners to temporarily pause or reduce payments for up to 180 days. (After that, homeowners can ask for an additional 180 days.) These rules, which apply to federally backed mortgages, are still in effect as part of the CARES Act relief package passed in March.
But the rules vary a bit, depending on the type of mortgage you have.
If your loan is backed by Fannie Mae or Freddie Mac, the two government-sponsored entities, there is no precise end date to the policy — regulators will wind it down when they deem it appropriate. But homeowners with loans insured by the Federal Housing Administration must contact their servicer and request an initial Covid-19 forbearance on or before Feb. 28. That had been set to expire on Dec. 31 but was extended on Monday.
Any skipped payments aren’t forgiven and must eventually be paid back. But if borrowers cannot make the extra payments right away, they may be eligible to push back what they owe until the home is sold or refinanced or when the loan term is up.
The situation is murkier for borrowers with private mortgages. They aren’t covered by the same protections, though some providers have extended similar relief.
FORECLOSURE PROTECTION Single-family homeowners with loans backed by Fannie Mae or Freddie Mac would be protected from foreclosure through at least Jan. 31, regulators said this month. The moratorium had been scheduled to expire at the end of December.
People living in properties that either Fannie or Freddie has taken over because the owner couldn’t pay the mortgage are also protected — the moratorium on evictions has been extended as well.
The Federal Housing Administration, which often insures loans to borrowers who make smaller down payments, said on Monday that it would extend its foreclosure and eviction moratorium through Feb. 28. It had been set to expire on Dec. 31.