Congress rushed through legislation and it was signed by the president. The cares act is the largest stimulus bill ever passed, and intended to help American families and American businesses. For the purposes of this article we’re going to focus on a few of the provisions that are likely to impact the majority of our clients.
Stimulus checks for American workers
Are US residents with an adjusted gross income of up to $75,000 for single filers, and $150,000 for married couples filing jointly are eligible to receive $1200 each. Folks for children under the age of 17 will receive an additional $500 per child.
For single fathers who make more than $75,000, or for married couples who make more than $150,000 there’s a phase out calculation. For every $100 over the limit, five dollars will be deducted from the potential stimulus check. Therefore, folks who are single filers will be completely phased out if they make $99,000 a year or more, and those married filing jointly will be completely phased out at $198,000.
Stimulus checks will be sent to folks without income as well. For example if you did not have any reportable income in 2019, or your income was from a non-taxable non-means tested source of income like Social Security you still qualify to receive a stimulus check.
The stimulus checks are considered a rebate from the IRS. They are being treated as an advance of refunds of a 2020 tax credit. Taxpayers will then reduce the amount of the credit available on the 2020 tax return by the amount of the advance refund payment received.
For the most part, there’s no real action for anyone to take. Congress has instructed the IRS to send checks out as soon as possible. So long as you are not in a state, or a trust, you’re eligible for this rebate, and you should expect to receive a stimulus check from the government as a result.
Although there is no specific date in which we know for certain when these checks will be hitting bank accounts, we expect that many of the checks will be delivered in April electronically to the bank accounts on file for those who file their taxes online.
The federal government is suspending loan payments on federally issued student loans through September 30 of 2020. There will be no penalty for missed payments, and no interest will accrue during the suspension.
Employers are also being encouraged to help employees with student loans by offering an incentive for those who are offering repayment benefits to their employees. These repayment benefits will be received as tax-free compensation. Employers can contribute up to $5250 annually towards employee’s student loans debt and it would be excluded from the employees income. This incentive applies to payments made after the cares act enactment through the end of 2020.