On Friday, President Trump signed a $2 Trillion Stimulus Plan known as the Cares Act (Coronavirus Aid, Relief and Economic Security Act) into law designed to help with the coronavirus pandemic. It is the largest economic stimulus package in modern American History. Under this new law, the government will send direct payments and unemployment benefits for those reeling from the Coronavirus crisis. The stimulus package will also aid states battling the virus as well as a bailout fund for businesses including $350 billion in small business loans for companies suffering due to many states being under stay at home orders.
President Trump signed the plan into law on Friday afternoon. The bill received bipartisan support after a tumultuous week in congress. Mr. Trump thanked “Democrats and Republicans for coming together and putting America first.” He said this would help the country’s economy recover. This after the U.S. surpasses China and Italy for highest number of confirmed cases of Covid-19.
Included in the plan is $1,200 for individuals while couples would receive up to $2,400 – plus $500 per child. The payments phase out for those with incomes of more than $75,000. Those making more than $99,000 would not receive anything. The income thresholds double for couples, all based on 2018 or 2019 tax returns. According to the Senate Finance Committee, those who made too much money to qualify but see their income fall in 2020 would receive a tax credit when they file their tax return next year. The payments are not subject to tax.
There is no timeframe on how long it would take the IRS to send out money but according to Treasury Secretary Steven Mnuchin, the IRS would begin issuing payments within three weeks of the legislation being singed into law. If you have authorized the IRS to send your tax refund via direct deposit, you’re likely to receive the money there. Otherwise, the IRS would mail out the check.
The bill also sends relief to workers who have found themselves without a job due to the Coronavirus pandemic. Jobless workers are set to get an extra $600 a week on top of their state benefits for up to four months. The unemployment assistance would expand eligibility to those who are unemployed or unable to work due to the virus while independent contractors and those who are self-employed are also included in the assistance even if they don’t qualify for traditional benefits. The timing on receiving benefits varies by state.
In 2001 under President George W. Bush, it took the IRS six weeks to start sending out rebate checks. In 2008 amid The Great Recession, it took three months for checks to go out after Bush signed the law. Nina Olson, who served as the IRS’s national taxpayer advocate for nearly two decades said, “There can be a lot of complexity involved in something as simple as sending a check out.” Whether it takes six weeks or three months, stimulus checks are on their way.
You can read more about the economic relief plan here.