April 1, 2020
Despite many speedbumps, and several self-inflicted roadblocks—including House Democrat attempts to pass their ideological wish list—members of Congress from both sides of the aisle eventually came together to pass the most recent coronavirus relief bill. On Friday, March 27, President Donald Trump signed into law H.R. 748, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which is the third phase of coronavirus response legislation. This $2 trillion law is the largest relief package ever passed by Congress, demonstrating the powerful forces unleashed by the coronavirus and drastic congressional response—including from some typically fiscally conservative members. Indeed, we are facing a public health and economic emergency of the likes most of us have never seen. Here is a look at how this legislation will impact you and your family.
The signature policy in the CARES Act, first proposed by the Trump administration, is a tax rebate that will be sent directly to families to help cover essential costs during this crisis. As a result of this bill, all Americans with an annual income of $75,000 or less will receive a direct payment of $1,200. For married couples with an income of $150,000 or less, this payment will double to $2,400. Families with dependent children will also receive an additional $500 per child. This policy was also adapted from a previous draft, to provide the full $1,200 rebate to those with little or no income. If you are someone who makes over the $75,000 threshold, you will still be eligible for a partial rebate. This rebate will be reduced by $5 for every $100 over the cap and will be completely phased out at incomes of $99,000 and above.
The great news is, if you have filed a previous tax return, there is no action required to receive the rebate. For Americans who have already filed their 2019 tax returns, the IRS will rely on those returns to determine eligibility. If you have not filed for 2019, they will use 2018 returns. Even though the president signed the bill on Friday, the earliest families can expect to see these rebates is in three or four weeks, according to some estimates. The rebate will be sent via direct deposit if the IRS has that information from a tax return. If the IRS does not have direct deposit information, it will mail a physical check, which may take a few weeks longer to arrive.
Sending tax rebates directly to Americans is not something unique to the current situation. During the 2008 recession, President George W. Bush issued tax rebates of $600 for individuals and $1,200 for married couples to help stimulate the economy. The tax rebates in the CARES Act are not only higher than in 2008 but will be sent out much sooner due to the IRS’s ability to work through logistics faster. This policy cements and incentivizes family structure, as there is no penalty on married couples, giving them double the individual amounts. It also functions as an additional child tax credit, giving more money for each child a family has. For the average family of four, this tax rebate will equate to a $3,400 check providing immediate financial help.
For those with a greater financial strain, who may need to draw from their retirement funds, there is additional help. As done in previous emergencies, if someone withdraws no more than $100,000 from their retirement account for coronavirus-related reasons, the 10 percent early withdrawal penalty is waived. The taxes that would otherwise be collected on that withdrawal can be paid out over the next three years.
In addition to the rebate checks, the CARES Act provides $250 billion to expand unemployment insurance to help those who are without work because of the coronavirus outbreak. This bill creates a temporary Pandemic Unemployment Program that will run through the end of the year. This program will provide extended financial assistance, enabling those without work to make monthly payments for food, rent, and other necessities. The program provides unemployment benefits for those who do not usually qualify, including religious workers, the self-employed, independent contractors, and those with limited work history. It also covers the first week of lost wages in states that do not cover the first week a person is unemployed and provides an additional 13 weeks of unemployment for those who remain unemployed beyond the weeks provided by the state.
Another valuable expansion is that all recipients of unemployment insurance will get an additional $600 a week beginning in April and lasting for the next four months. This addition was not without controversy, as several Senate Republicans objected to this addition because of the potential for a perverse incentive for those who might make more on unemployment insurance than they would by working. Ultimately, given the negotiating dynamics and tight timeline, this provision was not fixed. Looking to pass this bill quickly, the Trump administration was willing to accept this provision, and the bill passed the Senate with unanimous support.
To view your state’s unemployment policy and apply for unemployment insurance, go to this helpful database provided by the Department of Labor.
In a public health crisis that requires families to remain quarantined in their homes, it is critical that current housing situations remain secure. For families who own a home and make mortgage payments, the CARES Act prohibits foreclosures on any federally-backed mortgages for 60 days. It allows borrowers affected by the coronavirus to push off any missed payments to the end of their mortgage with no added penalties or interest. To help families who make rent payments, it halts evictions for those renting from properties with federally-backed mortgages for 120 days. The Department for Housing and Urban Development (HUD) has provided guidance for how homeowners and renters can respond to financial hardships.
Dr. Ben Carson, the Secretary of Housing and Urban Development, will coordinate these federal housing policies. He has been a vocal leader throughout the coronavirus outbreak, promoting faith and families. On March 20, Secretary Carson joined President Trump and Vice President Pence on an FRC conference call to pray with 800 pastors. On the call, Secretary Carson reminded the pastors that despite the uncertainty facing our country, God’s hand is guiding us.
The coronavirus outbreak has affected education across the country in many ways. Many schools have been directed to close their doors, replacing in-person classes with at home and online learning. Because of these changing dynamics, the CARES Act waives the federal testing requirements that students take in a typical school year. It also provides additional funding for K-12 schools to adapt to at home-learning and gives increased flexibility for how grants can be used for technology and other actions needed to adapt to the coronavirus situation. Private schools can also access these additional funds.
Many parents today also face the challenge of balancing student loan payments with other essential payments like rent and food expenses. To ease the financial burden of making student loan payments, the CARES Act suspends federal student loan payments for the next six months, and no interest will accrue on federal loans during these six months. The Department of Education has more information on which federal loans qualify and how these policies will be implemented.
The coronavirus’s impact on the public health and the economic stability of or country is something not seen for nearly a century. President Donald Trump and his Coronavirus Task Force have taken strong actions to slow the spread of the virus and protect the health of many. However, the crisis has resulted in unintended financial burdens on many families across the country. Members of Congress and the Trump administration worked together to negotiate a strong economic response that truly puts families first—a welcome sight in the typically-rancorous partisan political environment on Capitol Hill. The FRC team continues to engage members of Congress and the administration to ensure that faith, family, and freedom will remain protected even as our country responds to the coronavirus.
For more on how the coronavirus relief legislation specifically benefits churches and nonprofits, see our blog here.