FAQ: What the Coronavirus Stimulus Package Means for You

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Over the next few weeks, the most extensive stimulus package in U.S. history will begin to roll out. On March 27, 2020, President Donald Trump signed a historic piece of legislation designed to help bring relief to the U.S. economy in the wake of the biggest pandemic in modern history, the coronavirus. The legislation, known as the CARES Act, is aimed at providing financial assistance to businesses of all sizes and individuals.

According to the U.S. Department of Labor, nearly 3.3 million people filed first-time unemployment claims in the week ending on March 21 — up from the previous record of approximately 2.6 million people in 1982.


1. Why Was the CARES Act Passed?

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The 800-page CARES Act, which stands for the Coronavirus Aid Relief and Economic Security Act, is a bipartisan piece of legislation. It’s the third piece of federal legislation created in response to the coronavirus pandemic, and it follows bills passed on March 6 and March 18.

The $2.2 trillion stimulus package is focused on alleviating some of the impacts of the pandemic on the American public, which has ravaged U.S. businesses over the past month. In an atypical showing of speed and unity, Republicans and Democrats came together — via voice vote, to protect members from the risks of exposure — to pass the legislation needed to attempt to address the financial impact of the pandemic.


2. How Does the Package Allocate the $2.2 Trillion?

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The package includes direct check payments to eligible individuals and married couples of $1,200 and $2,400, respectively, as well as $500 per child. A projected $250 billion in unemployment insurance will increase the money Americans who have lost their jobs as a result of the coronavirus can receive. $350 billion has been set aside for small businesses, while $500 billion will go towards a rescue fund for larger corporations, such as airlines, along with cities and states. The hospital industry will get the $100 billion in the rescue funds it asked for, too.


3. Who Qualifies for the Direct Stimulus Payments?

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According to the Senate Finance Committee, those who qualify include all U.S. residents and citizens living abroad:

  • With an adjusted gross income under $75,000 for individuals
  • With an adjusted gross income under $112,500 for head of household
  • With an adjusted gross income under $150,000 for married couples filing jointly
  • Who are not the dependents of another taxpayer
  • Who have a work-eligible social security number

Are eligible for the full $1,200 ($2,400 married) payment. They are also eligible for an additional $500 per child under the age of 16.

A family of four could be eligible for a $3,400 recovery rebate.

  • The payment would scale down as income rises, phasing out entirely at $99,000 for singles and $198,000 for couples without children.
  • Those who receive Social Security retirement or disability benefits but earn too little to file returns will also receive stimulus checks.

4. When and How Will These Checks Be Paid?

A man is peering into a silver mailbox to see if his stimulus check has arrived

The bill calls for payments to be made "as rapidly as possible.” Treasury Secretary Steve Mnuchin said individuals should expect their checks within three weeks of the passage of the bill. Eligibility is based on 2018 or 2019 tax returns.

In an interview, with Megan Rapinoe over Instagram Live, Congresswoman Alexandria Ocasio-Cortez advised those who hadn’t yet filed their 2019 tax returns to do so as soon as possible. “If you have a direct deposit with the IRS, you will get your $1200 wired directly into your bank account, and so you’ll get it earlier than if they have to mail it to you. You’ll still get it, it’ll just take a little longer to get to you."

Essentially, the checks are considered a 2020 tax credit. Even if you don’t qualify based on your 2019 tax return, if your 2020 income drops with the economy, you could be eligible for it when you file taxes next year. An issue of contention Ocasio-Cortez and other Democrats have is that some immigrants who pay taxes and have been working throughout this quarantine, cooking and delivering food, for example, won’t be eligible for this direct payment check.


5. What Does the Package Offer Those Who Are Unemployed?

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The stimulus package has been noted for its extended unemployment benefits. The amount of unemployment pay varies from state to state. Still, under this bill, the federal government is giving the state government up to $600 per individual on top of what each one already pays as unemployment.

This payment can be received by those who qualify for up to four months. The standard seven-day waiting period before an unemployed person can usually get benefits is being waived to help people receive the money as quickly as possible.

For the first time ever, these benefits will also include workers in the gig economy, freelancers and independent contractors, who previously didn’t qualify. And even if you haven’t been laid off but can’t work because of a reason related to COVID-19, you would be eligible for unemployment checks.


6. What About Paid Sick Leave?

A man sits at home sick with a blanket wrapped around him and a computer in front of him.

Both part-time and full-time employees will get 80 hours of paid sick leave, capped at $511 per day. People who aren’t able to work from home because they’re being treated for COVID-19 or have been ordered to quarantine at home due to the illness will also be eligible for the pay. If you’re staying home to care for someone who has COVID-19, or if you have a child whose school or day care is closed because of the coronavirus, you’ll be eligible for two-thirds of your pay, capped at $200 per day. The law also provides relief for people who are unable to get to work because of a quarantine imposed as a result of the outbreak.


7. What Does the Package Offer Small Business Owners?

A small business owner stands in his woodworking shop looking down at a tablet while reading about the CARES Act.

The Small Business Administration (SBA) has welcomed the support provided by the stimulus package for the 30 million small businesses who’ve been affected across impacted industries. It amounts to $10 billion for the already-existing Economic Injury Disaster Loans and $350 billion for Paycheck Protection Loans.

Businesses of up to 500 employees are eligible for this assistance, and most of it will go to pay workers, mortgage interest and rent. “Our small businesses are the economic engines of their communities,” said SBA Administrator Jovita Carranza. “The SBA is ready to provide them with the support they need to remain open and keep their workers employed. With our whole-of-government approach led by the president, we are providing small businesses with the resources they need to get them through this unprecedented time.”

You can apply for these small business loans directly through the SBA. There is potential built into the act that some of these loans could be forgiven and turned into grants.


8. Will Student Loans Still Need to Be Paid?

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The CARES Act builds on the federal government already waiving two months of payments and interest for many federal student loan borrowers, and interest won’t accrue on the loan during the suspension time. It suspends interest and allows for most borrowers to stop making payments up until September 30, 2020, with no financial penalties.


9. What About Rent and Mortgages?

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The CARES Act provides a 120-day ban on evictions for many renters and a moratorium on foreclosures of up to six months for homeowners struggling to pay their mortgages.

As for other bills that need to be paid, Ocasio-Cortez advised those struggling to make payments to contact their service providers and say to them, “Due to COVID-19, I am unable to pay this bill.” She said, “This applies to things like cell phone bills and credit card payments. Many of the companies have internal policies that, when you say ‘due to COVID-19’, can kick in, and it triggers a different process.” It’s not a guarantee, but she says there may be forgiveness of the unpaid amount, payment deferment or payment reduction.


10. How Does This Stimulus Package Differ From the Bailout of 2008?

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Oversight measures were included as a way to prevent the bailout issues of 2008 from being repeated. This legislation requires an inspector and accountability committee to oversee how the money is being spent. It consists of five chosen “watchdogs.”


11. Is There More to Come?

A man tries to work from home while holding his baby, and the baby is trying to grab the man's glasses off his face

There is likely more to come, as Senate Minority Leader Chuck Schumer said: “This is certainly not the end of our work here in Congress — rather the end of the beginning.” There is already talk of a phase four of the legislation with a bigger package, in a further attempt to prevent the financial impact from the coronavirus pandemic from becoming akin to the Great Depression.

Nadia Neophytou is a journalist based in New York City, who writes for a variety of publications from The Hollywood Reporter to Quartz.

Sources

CBS News, Face the Nation. “Mnuchin says checks from coronavirus bill coming ‘within 3 weeks.’" Accessed March 31, 2020.

U.S. Department of Labor. “Unemployment Insurance Weekly Claims.” Accessed March 28th, 2020.

U.S. Congress. “S.3548–CARES Act.” Accessed March 28th, 2020.

YouTube. “Megan Rapinoe Instagram Live, May 29, 2020.” Accessed March 31, 2020.