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One-Time Stimulus Payments

TL;DR: The U.S. government passed a stimulus bill that will send checks or direct deposits to most Americans to help us survive financially as much of the economy shuts down. Thanks, coronavirus.

How large will payments be? Will I get the full amount?

It depends on your filing status and your adjusted gross income (AGI). This is different than your income / revenue / profit for the year, so look at Line 8b on your most recent 1040 federal tax return document to find out your AGI. If you haven't filed your 2019 return yet, they’ll use the information from your 2018 return.

Generally...

  • If you’re single: You’ll qualify for a $1,200 payment if your AGI was $75,000 or less.
  • If you’re married (filed jointly): Couples could receive up to $2,400 if your adjusted gross income was $150,000 or less.
  • If you’ve got kids: The payment increases by $500 for each child under 17 that you claimed as a dependent.
  • If your AGI is more than $75,000 / $150,000: You may still be eligible for partial payment. Calculate your stimulus payment here.

How many payments will there be?

For now, this is a one-time deal.

Will I have to apply to receive a payment?

Nah. If the IRS already has your bank account information (like if you’ve opted to get your tax refund via direct deposit in the past), they’ll transfer the money directly to your bank account. If they don’t have your bank information, your check will come in the mail.

What’s the cutoff date to file my 2019 tax return and get a check?

The IRS will likely start to process the checks soon, so the answer is “ASAP!”, especially if:

  • You need to update your direct deposit information.
  • You need to update your address.
  • You didn’t qualify for a check based on your 2018 tax return, but you DO qualify based on your 2019 information.

Our recommendation for all of our clients is to file now and pay later (if you need to). It’s much better to know how much you’ll owe (or how much you’ll get back!) so that you can plan your life during this chaotic time. We’re offering reduced rates, plus the IRS has super generous payment plans. Set up an appointment today with Brass Taxes and let us know how we can help.

When will my payment arrive?

Treasury Secretary Steven Mnuchin is aiming to get checks out the door the week of April 6, but the general feeling is that they could come later. We’re guessing that direct deposits will come in April; the last of the paper checks could come by mid-May.

How will I know if my payment was sent to the right place?

The IRS will mail you a paper notice a few weeks after dispersing your payment. The notice will tell you how they sent the payment -- whether by direct deposit or by mail -- and to which account / address they sent it. If you didn’t get a deposit in your bank account or a check in the mail, then you should contact the IRS with the contact information included on the notice.

Do I have to pay income taxes on the amount of my payment?

Nope!

Wait! What if I have more questions?

Give us a shout!  Email info@brasstaxes.com

No question is too big or too small, and we’re staying on top of all the information from the IRS so you don’t have to. (Plus, we’re dying for friends to talk to during this time of social distancing...Help us out.)

 

Unemployment Program Expansion

TL;DR: Due to the stimulus bill, unemployment benefits now cover more people, pay more, and pay out longer.

Who will be covered by the expanded program?

Self-employed people and part-time workers (including gig workers, freelancers, and independent contractors) are now eligible for state unemployment benefits, plus the additional weekly benefit from the federal government.

If you’re unemployed, partly unemployed, or can’t work for a variety of coronavirus-related reasons, you’re likely able to sign up for unemployment.

How much will I receive?

It depends on your state. The stimulus bill will earn eligible workers an extra $600 per week, on top of what your state’s unemployment benefits already offer.

Can I fire myself from my own S-corp and get unemployment?

Yes. 

What if I’m a part-time worker who lost my job because of a coronavirus reason, but my state doesn’t cover part-time workers? Am I still eligible?

Yes. Part-time workers are eligible for benefits, but the benefit amount and how long benefits will last depend on your state. They are also eligible for the additional $600 weekly benefit.

I was about to start a new job and now I can’t get there because of an outbreak.

You’re eligible for benefits. You will also be covered if you were immediately laid off from a new job and did not have a sufficient work history to qualify for benefits under normal circumstances.

I lost my W2 job, do I qualify for any assistance?

If you lost employee / W2 work and are currently making less than $1104 / week from W2 sources, then you will likely qualify for Unemployment Insurance (UI). This weekly maximum has been expanded from $504 due to the new Federal law.

I am a W2 worker- my work was shut down due to COVID-19, but my employer is applying for an SBA Protection loan to pay us. Will the unemployment benefit stop once my employer starts paying me using this loan?

Per the NY Department of Labor website, if your employer was temporarily closed you should file a claim if you have been laid off from your job, so it sounds like you've taken the right steps. The amount of unemployment benefits you receive are determined using your current weekly income. Any income you receive will reduce your unemployment benefits but will not necessarily disqualify you from all benefits.

I lost my freelance/1099 work, do I qualify for any assistance?

If you lost freelance / 1099 work due to COVID-19 and are currently making less than $600 / week from freelance sources, then you will likely qualify for Pandemic Unemployment Assistance (PUA) which will replace lost income up to $600 weekly maximum. Please note, you cannot apply for PUA until you have been determined eligible OR ineligible for UI benefits. You must apply for UI before you apply for PUA.

I am a freelancer/self employed and am filling out the application for PUA and am confused about what to enter in as my employer.

The NY Department of Labor has a helpful guide for self-employed individuals for how to file an Unemployment Insurance Claim through their website. 

https://labor.ny.gov/ui/pdfs/self-employed-ui-guide.pdf

I am an independent contractor but have not worked this year. Do I qualify for PUA?

Our understanding is that it only affects unemployment caused by COVID since January 2020 so you might not qualify. Here's a quick sheet that shows the scenarios of unemployment that will qualify under Pandemic Unemployment Assistance (PUA):

https://www.labor.ny.gov/ui/pdfs/pandemic-unemployment-assistance.pdf

We're waiting on further clarity from the U.S. Secretary of Labor. Since this is so fresh, they don't have all the details hammered out. 

I am an independent contractor who can work from home. Do I qualify for PUA?

Individuals are not eligible for PUA if they are being paid to work from home.

I’ve previously received unemployment (UI) and have exhausted the amount of UI available to me. Am I still able to receive UI at this time as a person affected by COVID?

If you’ve exhausted your benefits, eligible workers can generally reapply. But how much you get and for how long depends on the state where you worked. Everyone gets at least another 13 weeks, along with the extra $600 payment through July 31. We would encourage you to contact your resident state for more information, although it may take a while to get through to someone due to phone lines being tied up!

How long will the payments last?

Many states already provide 26 weeks of benefits, though some states have trimmed that back while others provide a sliding scale tied to unemployment levels.

The bill provides all eligible workers with an additional 13 weeks. So participants in states with 26 weeks would be eligible for a total of 39 weeks. The total amount cannot exceed 39 weeks, but it may be shorter in certain states.

The extra $600 payment will last for up to four months, covering weeks of unemployment ending July 31.

How long would the broader program last?

Expanded coverage would be available to workers who were newly eligible for unemployment benefits for weeks starting on Jan. 27, 2020, and through Dec. 31, 2020.

If I was already collecting unemployment before this crisis, am I eligible for PUA? Do I have to do anything to change my claim?

Our current understanding is that you don't need to do anything except continuing your normal check-ins! No change in claim necessary.

I can’t seem to get ahold of anyone at my state’s unemployment office- what do I do?

It sounds like you are taking the right steps, and busy-phone lines have unfortunately been the case for many states as they navigate this new situation. We would recommend being persistent in calling them until you can get through to someone.

Useful info for NY-ers

You can file through the standard NY unemployment process:

Online: http://www.labor.ny.gov/signin 

Phone:1-888-209-8124

If you are filing a new unemployment insurance claim, the day you should apply is based on the first letter of your last name.

A - F file on Monday | G - N file on Tuesday | O - Z file on Wednesday

Missed your day? File on Thurs-Fri-Sat

Any claim you file will be backdated to the date you became unemployed. If you are eligible, you will be paid for all benefits due.

For more info on PUA: https://www.labor.ny.gov/ui/pdfs/ui-covid-faq.pdf

Wait! What if I have more questions?

Give us a shout!  Email info@brasstaxes.com

No question is too big or too small, and we’re staying on top of all the information from the IRS so you don’t have to. (Plus, we’re dying for friends to talk to during this time of social distancing...Help us out.)

 

How Charitable Contributions are Affected

Does the stimulus bill do anything with charitable donations?

Yes. Since the Trump tax changes, donations have had less of a tax benefit for a lot of people. The bill makes a new deduction available for up to $300 in annual charitable contributions. So donating up to $300 will benefit you on your 2020 taxes.

 

How Federal Student Loan Payments are Affected

Does the coronavirus affect my student loans?

Yes. Surprisingly this Buzzfeed article does an excellent job explaining the changes.