Coronavirus Stimulus Package FAQApril 2, 2020
Congress passed the Coronavirus Aid, Relief, and Economic Security Act, and it was signed into law by President Trump on Friday.
To help Connecticut residents understand the details of the bill and how it can potentially provide assistance during the COVID-19 crisis, Senator Chris Murphy's office has compiled a list of frequently asked questions.
For further information on the state's response to the coronavirus, visit ct.gov/coronavirus.
How will I know if I am getting a check or not? Do I have to sign up?
- Individuals with adjusted gross income under $75,000 ($112,500 for head of household and $150,000 for joint filers) who are not dependents of another taxpayer are eligible for the full rebate.
- The rebates will be paid out as advance refunds (in the form of checks or direct deposit) based on your 2019 tax returns (or 2018, if a 2019 return has not yet been filed).
- Non-filers will have to file a tax return to qualify, but we are waiting on the IRS to provide more guidance.
- These payments are available to anyone with a Social Security Number (but not an ITIN number), including those who have no income, as well as those whose income comes entirely from non-taxable, means-tested benefit programs, such as Social Security or Social Security Disability Insurance.
- The rebate is treated like other refundable tax credits and not considered income, so it will not be taxed.
How much will I get and when?
- Each eligible adult in a household will receive $1,200 with an additional $500 for each dependent child in the household under 17.
- These payments begin phasing out at a 5% rate for single filers above $75,000, head of household filers above $122,500, and joint filers about $150,000. For example, an individual earning $87,000 per year would receive a payment of $600, and an individual earning $99,000 per year and above would not receive a payment.
The IRS hopes to begin issuing the rebate checks within three weeks.
Unemployment Insurance (UI) and Emergency Leave
Am I eligible for UI?
- You are eligible if you’ve been laid off, are working part-time, if you are self-employed, an independent contractor, and if you’re working in the “gig economy” because of COVID-19.
What is the benefit?
- The exact amount you can receive through unemployment depends on your previous earnings and what you receive from the state, but between now and July 31, an additional $600 will be added to every unemployment compensation check, so no one will receive less than $600 per week. You can apply for unemployment insurance here.
- If you exhaust the weeks of unemployment compensation available to you through CT DOL, you will be eligible for an additional 13 weeks of benefits. These benefits will be federally-funded, but you will still receive them through Connecticut.
- The Families First Coronavirus Response Act provided $500 million for states to increase capacity to deal with unemployment insurance claims, which have been surging in Connecticut since early March.
Which employers must provide paid sick leave and family leave?
- In general, a private employer with fewer than 500 employees is a “covered employer” for both the paid sick leave and paid family leave requirements.
- The Secretary of Labor has additional authority to exempt employers with fewer than 50 employees from the requirement to provide leave for caring for children due to closures of schools or child care, both in the paid sick leave and paid family leave context.
How much paid sick leave are employees eligible to take?
- For paid sick leave, employees are eligible to take up to 80 hours (two weeks) of paid time, depending on the employee’s regular schedule, at 100% of the employee’s regular rate of pay (up to $511 per day) due to quarantine/isolation order, health-care provider guidance to self-quarantine, or seeking diagnosis for symptoms of COVID-19.
- Sick leave pay is limited to 2/3 of the employee’s regular rate of pay (up to $200 per day) for caring for someone who is isolated/quarantined and for taking care of a child due to a closure of school or child care.
How much paid family leave are employees eligible to take?
- For paid family leave, employees are eligible to take up to 10 additional weeks of paid time at 2/3 of the employee’s regular rate of pay (up to $200 per day) solely to take care of a child due to a closure of school or child care or the unavailability of a child care provider.
Small Business Support
For a detailed small business owner’s guide please click here.
What relief is included for small businesses?
- Paycheck Protection Program (PPP): The law includes nearly $350 billion to create a Paycheck Protection Program that will provide small businesses, nonprofits, and other entities with zero-fee loans of up to $10 million based on average monthly payroll costs. Up to eight weeks of average payroll, mortgage interest, rent, and utility payments can be forgiven if the business retains its employees and their salary levels. Principal and interest payments can be deferred for up to a year, and all SBA borrower fees are waived. This temporary emergency assistance through the U.S. Small Business Administration (SBA) and the Department of Treasury can be used in coordination with other COVID-financing assistance established in the law or any other existing SBA loan program.
- Small Business Administration (SBA) Loans: The law also includes $17 billion to further ease the burden on small businesses that use SBA loan products. Under the law, the SBA will cover all loan payments for existing SBA borrowers, including principal, interest, and fees, for six months. The loan amount is based on average total monthly payments for payroll for the 12-week period beginning February 15, 2019, or at the election of the eligible recipient, March 1, 2019, and ending June 30, 2019.
- Emergency Economic Injury Grants: The law includes $10 billion in funding for a provision to provide an advance of $10,000 to small businesses and nonprofits that apply for an SBA economic injury disaster loan (EIDL) within three days of applying for the loan. EIDLs are loans of up to $2 million that carry interest rates up to 3.75% for companies and up to 2.75% for nonprofits, as well as principal and interest deferment for up to 4 years. The loans may be used to pay for expenses that could have been met had the disaster not occurred, including payroll and other operating expenses.
- The EIDL grant does not need to be repaid, even if the grantee is subsequently denied an EIDL, and may be used to provide paid sick leave to employees, maintaining payroll, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments.
- Refundable tax credits: IRS will be posting information soon on these credits on its website (www.irs.gov), including information on how to obtain advance payment of these credits.
- Payroll taxes: The law defers payroll through the end of 2020. Deferred taxes will not become due until end of 2021 and end of 2022, with 50% of the liability being paid at each date.
- Employee retention tax credit: available for struggling businesses that are not eligible or choose not to participate in the new SBA Paycheck Protection Program.
Is my small business eligible for relief?
- Paycheck Protection Program (PPP): This relief is available for small businesses, 501(c)(3) nonprofits, 501(c)(19) veterans organizations, or Tribal businesses with not more than 500 employees who were in operation on February 15, 2020. It is also available to sole proprietorships, independent contractors, and eligible self-employed individuals.
- Small Business Administration Loans: This relief will be available to existing SBA loan borrowers and new borrowers who take out an SBA loan within six months after the president signs the law. Each program has different requirements, go here for more details.
- Emergency Economic Injury Grants: The grant is available to small businesses, private nonprofits, sole proprietors and independent contractors, tribal businesses, as well as cooperatives and employee-owned businesses. Eligible grant recipients must have been in operation on January 31, 2020.
- Refundable tax credits: The law makes the credits available for private-sector employers that are required to offer coronavirus related paid leave to employees.
- Payroll taxes: Any business that does not have a loan forgiven under the new SBA Paycheck Protection Program is eligible for the payroll tax deferral.
- Employee retention tax credit: The law provides a refundable payroll tax credit for 50% of wages paid by employers to furloughed or reduced-hour employees during the COVID-19 crisis.
If I receive a stimulus check from the federal government, will it impact my ability to file for bankruptcy?
- No. Under this law, stimulus checks from the federal government cannot be used to determine whether you are eligible for filing bankruptcy.
- If you file for Chapter 13 bankruptcy, you will not have to turn your stimulus check over to your creditors. This new relief will be available for one-year.
What assistance is there for nonprofits?
- Nonprofits are eligible for payroll taxes deferment (see above).
- Nonprofits are eligible for the Paycheck Protection Program (see above).
- The law also allows any mid-sized nonprofit (between 500 and 10,000 employees) to get access to quick, low cost, government guaranteed credit through their local lender or financial institution. The Treasury Department and Federal Reserve will have a degree of flexibility in designing the new program, but the expectation is for loan terms to last for no more than five years and to cover up to 100% of payroll over the previous 180 days, or 50% of revenues for the past year, for eligible organizations. Borrowers will also commit to rehiring their workforce back to pre-existing levels upon the end of the COVID-19 health emergency.
What funding is provided to K-12 schools?
- The law provides $13.5 billion for local school districts to continue providing educational services to their students, including planning for and coordinating during long-term school closures and purchasing educational technology to support online learning.
- Another $3 billion is available in flexible formula funding to allow Governors to address the needs of elementary and secondary schools and institutions of higher education.
Do I get relief from my student loans?
- The CARES Act requires the Secretary of Education to defer loan payments, principal and interest, for 6 months through September 30, 2020 without penalty for the borrower for all federally held loans.
- The law also suspends any involuntary collection for defaulted loans, such as wage garnishment, reduction of tax refunds, or Social Security benefits.
- The law also includes a tax break for up to $5,250 for borrowers who are receiving assistance on student loan payments from their employers.
Is there additional funding for college students?
- The law provides $14.25 billion for higher education emergency relief for colleges and universities to respond to coronavirus, including providing grants to students to cover their basic needs.
- Public colleges are also eligible for flexible formula funding from the Governor.
- Students who are currently participating in the Federal Work Study program can continue to receive work-study payments from their institution if they are unable to work due to workplace closures.
- Relief also exists for students who must drop out of school due to COVID-19. Students will have the portion of their student loan taken out for the semester canceled. Students who received a Pell Grant or subsidized student loan will not have those types of financial aid counted toward their lifetime limits.
Children and Families
Is there additional assistance for childcare and who is eligible?
- The law provides an additional $3.5 billion for the Child Care and Development Block Grant (CCDBG) to provide child care assistance to health care sector employees, emergency responders, sanitation workers, and other workers deemed essential during the response to the coronavirus. States can use funding to provide subsidies to essential workers, reimburse providers directly, open emergency child care centers, or keep providers from going out of business.
- The law also includes $750 million for Head Start to meet emergency staffing needs.
- CCDGB and Head Start funds will be distributed to the states, who will then pass them along through their own programs.
Is there assistance for social service organizations and who is eligible?
- The law provides an additional $1 billion to the Community Services Block Grant to support a wide range of social services and emergency assistance for those who need it most. Funding goes directly to local community-based organizations (usually the area Community Action Programs), upon application.
- The law provides an additional $5 billion for the Community Services Block Grant, which will be determined by formula.
What if I can’t pay my rent?
- The law provides additional protections from eviction for all renters who live in properties that receive a federal subsidy, such as public housing, Section 8 rental assistance vouchers or subsidies, USDA rental housing assistance, or Low Income Housing Tax Credits. It also covers any renters in properties where the owner has a federally backed mortgage loan, which includes loans backed by the FHA, USDA, and Fannie Mae and Freddie Mac.
- Owners of multifamily rental properties with federally-backed loans will be eligible to receive forbearance on those loans for 90 days, during which period they may not evict or charge late fees or other penalties to tenants for nonpayment of rent.
- Owners of federally-subsidized properties or properties with a federally-backed mortgage loan may not evict or charge penalties or fees to a tenant who cannot pay rent for 120 days following this act.
What if I need assistance with my mortgage?
- The CARES Act provides American homeowners with important protections to help keep them in their homes. Homeowners with FHA, USDA, VA or other federally-backed mortgages including those guaranteed by Fannie Mae and Freddie Mac may request forbearance on payments for up to 12 months with no fees, penalties, or extra interest.
- The law also includes a 60 day moratorium on foreclosures and evictions of homeowners with FHA, USDA, VA, or 184/184A loans, or whose mortgages are backed by Fannie Mae and Freddie Mac.
For more information on Governor Lamont's recent announcement regarding further mortgage relief for Connecticut residents, click here.
Utility and Nutrition Assistance
Is there utility assistance and am I eligible?
- The law provides an additional $900 million for LIHEAP to help lower income households heat and cool their homes. You can check your eligibility here.
- Connecticut has also ordered our utilities not to terminate service to customers during this crisis.
Is there nutrition assistance and am I eligible?
- The law provides $15.5 billion in additional funding for the Supplemental Nutrition Assistance Program (SNAP). You can check your eligibility here.
- The law also provides $450 million for The Emergency Food Assistance Program (TEFAP) to assist food banks across the country. You can look up local food banks here.
- The law also expands food delivery service for seniors to ensure that seniors eligible for certain nutrition assistance programs can still receive that assistance if they are practicing social distancing.