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On March 27 the President signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law. The law provides a $2 trillion economic rescue plan designed to help both individuals and businesses through the COVID-19 pandemic.
Peoples State Bank is providing information as we know it at this time, based on review of the legislation and details from the IRS website. We’ve divided the information into two sections; for individuals and for businesses.
The legislation provides a stimulus payment to most adults. The money will come from the U.S. Treasury utilizing the Internal Revenue Service to distribute the funds. If the Internal Revenue Service has your bank account information, it would transfer the money to you via direct deposit based on the recent income-tax forms it has on record. Treasury Secretary Steve Mnuchin said he expected most people to get their payments within three weeks. More details can be found on the IRS website.
Most adults will receive $1,200, although some will receive less based on their income. A single adult with an adjusted gross income (your income before taxes) of $75,000 per year or less who filed taxes in 2018 or 2019 will receive the full amount. Someone filing their taxes as head of household who earns $112,500 or less will receive $1,200. Married couples filing jointly with earnings of $150,000 or less will receive a total of $2,400. For every child age 16 or under, the payment would be an additional $500. Dependents on your tax return age 17 and older, such as college aged children or elderly parents, will not receive a payment.
If you make more than those base figures, you may still receive a partial payment. The payment decreases by $5 for every $100 above the threshold of $75,000 individual and $150,000 married couple, until it stops altogether for taxpayers earning more than $99,000 (individual) or $198,000 (married).
You can find your adjusted gross income on line 8b of the 2019 1040 federal tax return. If you haven’t prepared your 2019 tax return yet, you can use your 2018 return.
You will not have to apply for a payment. As long as you’ve filed your 2019 or 2018 taxes, the payment will be automatic. Be careful as a new scam is spreading where scammers—posing as government or IRS officials—call people to ask them for bank information. The stimulus payments will be made automatically to your account. The IRS and/or other government officials will not call you to set up the payment.
The IRS has provided a webpage for you to check the status of your economic impact payment. Here’s what you need to know:
If you did file either 2019 or 2018 taxes, then go to the Get My Payment webpage. The webpage has detailed information on what you need to check on the status of your payment. The IRS will send your stimulus payment to the account that you used for your 2019 tax return, or if you haven’t yet filed your 2019 return, they will use your 2018 information. Please note that the IRS may not have your direct deposit information if you did not get a refund from your 2019 or 2018 federal tax return. After inputting your information to check the status of your stimulus payment, you may receive a notice that requires you to provide further details. Here’s what you’ll need if that happens:
If you didn’t file taxes in either 2019 or 2018, then go to the Non-Filers: Enter Payment Info Herewebpage. The webpage has detailed information on who is eligible, and what you will need to provide in order to get a stimulus payment.
You can find more information, and answers to frequently asked questions on the IRS’ FAQ webpage.
According to the legislation, you will receive a paper notice in the mail sent to the address on record in the 2019 or 2018 tax return. The notice will come no later than a few weeks after your payment has been deposited to your account. The notice will indicate where the payment was sent. If you have a discrepancy at that point, you will be provided contact information for the IRS.
If you don’t already use our digital banking platforms, now is a perfect time to set up digital banking so you can check periodically for the money.
The CARES Act provides expanded benefits for those who are unemployed. Those who are unemployed, partially unemployed, or who cannot work for a wide variety of COVID-19-related reasons would be more likely to receive benefits. The additional weekly payment would be $600 of federal pandemic unemployment compensation above the typical state unemployment payment. If you are unemployed now and your weekly payment is $245, then your new weekly payment would be $845. Because states manage unemployment benefits, the state will receive the federal money, and have the option of providing the entire amount on one payment or sending the federal compensation separately.
There are many variables pertaining to this issue, so your best information will come by contacting your state unemployment office for details on payments, length of additional benefits, and your eligibility for benefits.
The CARES Act includes automatic payment suspension for any student loan held by the federal government through September 30, 2020. Many of the loan servicers have experienced high demand through their call centers, so if you have online access to your account, it may be the best method to determine your payment situation. Be aware that other loans not made through the federal government may not be eligible. You should check with those lending agencies for assistance programs they may be offering.
If you have a federal student loan, you will receive a notice indicating what has happened with those loans. You can choose to keep paying down your principal if you want. After August 1, 2020, you should begin receiving notices regarding the end of the payment suspension period.
Required Minimum Distributions
The CARES Act provides retirees who have reached the age for required minimum distributions (RMD) from their defined contribution plans—like 401(k)s, 403(b)s, 457(b) plans, and IRAs—to suspend both their 2019 RMD if it was their first year and had not yet made an RMD by April 1, 2020, along with their 2020 RMD. If you have a defined contribution plan with Peoples, and would like to suspend your RMD in 2020, please contact Peoples at 888.929.9902.
Protections Against Negative Credit Reports
You would be protected against a negative credit report if you have an agreement with a lender to delay payments or make partial payments due to the coronavirus crisis.
Protections Against Foreclosures & Evictions
The CARES Act includes protections for homeowners facing foreclosure on their mortgage and for renters who are facing eviction. The legislation states anyone facing a financial hardship from coronavirus shall be given a forbearance on a federally backed mortgage loan of up to 12 months. The legislation calls for a 60-day moratorium on all foreclosure activity beginning March 23, 2020. The legislation also bans fees, penalties, or additional interest to be charged as a result of delayed payments. It provides similar protections for those with multifamily federal mortgage loans, allowing them to receive a 30-day forbearance and up to two 30-day extensions.
Paycheck Protection Program
The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides $349 billion in loans for small businesses to cover salary, wages, and benefits. Known as the Paycheck Protection Program and administered through the SBA’s 7(a) loan program, it provides loans to small businesses that maintain their payroll during the coronavirus emergency. SBA-approved lenders like Peoples State Bank process the loans, which can be up to 2.5 x the borrower’s average monthly payroll, not to exceed $10 million per business. (Please note that as of April 16, 2020, the SBA is unable to accept new applications for the PPP based on available appropriations funding)
These loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward.
Businesses and 501(c)(3)s with fewer than 500 employees, or that otherwise meet the SBA’s size standard may be eligible for PPP.
More information can be found on our Business Resource Guide found here.
Economic Injury Disaster Loan (EIDL) Program
The CARES Act expanded the SBA’s EIDL program, which provides small businesses and non-profits up to $2 million in loans for working capital. The loans are provided through the SBA and include interest rates of 3.75% for businesses and 2.75% for non-profits.
Relief for Farmers
The CARES Act provides $9.5 billion in emergency aid for the agriculture industry and replenishes $14 billion in spending authority to the Agriculture Department’s Commodity Credit Corporation, a depression-era financial institution set up to stabilize the farm economy. Producers ranging from dairy farmers and cattle ranchers to fresh fruit and vegetable growers are eligible.
Employer Payroll Taxes
The CARES Act provides businesses the ability to defer paying the employer portion of certain payroll taxes through the end of 2020, with all 2020 deferred amounts due in two equal installments, one at the end of 2021, the other at the end of 2022. Payroll taxes that can be deferred include the employer portion of FICA taxes, the employer and employee representative portion of Railroad Retirement taxes (that are attributable to the employer FICA rate), and half of SECA tax liability. However, deferral is not provided to employers who receive assistance through the Paycheck Protection Program.
We’re Here For You
Our entire team at Peoples State Bank is here for you. As we establish a “new normal” during this time, know that you can reach out to any of us for personal attention and answers to your questions. We continue to serve you through our drive-ups, phone, text, email, and individual appointments. Just give us a call at 888.929.9902 or call your banker.
Thank you for the privilege to serve you.
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