The U.S. government is handing out about $2 trillion dollars to ease coronavirus-driven economic distress for small business owners, heavily affected industries — and all but the highest-earning Americans.
Lawmakers agreed to the highly debated stimulus terms early Wednesday morning, and the bill is expected to pass both houses of Congress and get signed into law by President Donald Trump by the end of the week. It’s more money than the U.S. government has ever put into a rescue package before (it represents 57% of the $3.5 trillion Americans paid in taxes in fiscal year 2018), with the ultimate goal of providing a safety net for industries and consumers alike.
But the checks won’t go out to everyone.
Who Gets a Check
Checks will be doled out based on your income as reported on your 2019 federal tax return (if you haven’t filed for 2019, then it’s based on your 2018 return). According to the Tax Foundation, about 94% of Americans will be eligible for some level of relief.
In short, Americans making less than $75,000 will receive a one-time payment of $1,200 per adult and $500 per child under the age of 17. As an individual’s income increases, that check gets smaller by roughly $50 per $1,000 earned, until it diminishes completely for individuals with an income of $99,000 and married couples filing jointly with an income of $198,000 and no dependents (assistance tapers off at higher income levels for those with dependents, as outlined by the Tax Foundation).
Unemployed workers will see an increase of $600 to their weekly unemployment insurance for four months — a boost that also extends to furloughed workers or freelancers.
Who Doesn’t Get a Check
Anyone in the following categories won’t receive a relief check:
- A single filer with no dependents and an individual income of $99,000 or more
- A head of household with one dependent and an income of $147,500 or more (add $10,000 of income for each additional dependent)
- Married filers with no dependents and an income of $198,000 (add $10,000 of income for each additional dependent)
Other provisions of the stimulus relief bill included some leniency on various rules:
- Borrowers are being given permission to hit pause on paying back loan debt, sans penalty
- Employers are getting a delay on payroll taxes
- Americans with retirement savings won’t have to pay an early-withdrawal penalty on withdrawals of up to $100,000 from 401(k), 403(b), and individual retirement accounts (IRAs)
Secretary of the Treasury Steven Mnuchin said checks will be sent three weeks after the bill is finalized …but that might be a stretch. The last time the government issued relief checks to Americans was in 2008, and it took two months after signing.
But the stock market already nodded in agreement. At news that the deal was reaching a conclusion, the Dow had its biggest one-day jump since 1933 on Tuesday (up 11.4%).
Looking for more money tips? Read: 5 Productive Things You Can Do While In Quarantine