The bill includes several elements aimed at helping keep people engaged in the economy. That means direct cash for many, plus expanded unemployment benefits and new rules for things like filing your taxes and making retirement contributions.
Cash payments: Estimated to total $300 billion. Most individuals earning less than $75,000 can expect a one-time cash payment of $1,200. Married couples would each receive a check and families would get $500 per child. That means a family of four earning less than $150,000 can expect $3,400.
The checks start to phase down after that and disappear completely for people making more than $99,000 and couples making more than $198,000.
The cash payments are based on either your 2018 or 2019 tax filings. People who receive Social Security benefits but don't file tax return are still eligible, too. They don't need to file taxes; their checks will be based on information provided by the Social Security Administration.
Extra unemployment payments: The $260 billion estimated cost is subject to change based on the number of people filing for unemployment.
The bill makes major changes to unemployment assistance, increasing the benefits and broadening who is eligible. States will still continue to pay unemployment to people who qualify. That amount varies state by state, as does the amount of time people are allowed to claim it.
This bill adds $600 per week from the federal government on top of whatever base amount a worker receives from the state. That boosted payment will last for four months.
For example, if an out-of-work person is receiving the national average of about $340 per week, under the new federal program their take-home pay will be $940.
The legislation also adds 13 weeks of unemployment insurance. People nearing the maximum number of weeks allowed by their state would get an extension. New filers would also be allowed to collect the benefits for the longer period. Tax returns: Some people have not filed their 2019 tax returns, but that's OK. The filing deadline has been extended to July 15. The IRS also says that people who have filed or plan to can still expect to receive a refund if they are owed one.
A lot has been written about the Coronavirus Aid, Relief, and Economic Security (CARES) Act—also known as the stimulus package. There has been much less attention paid to the tax changes included in the Act. This new law allows all taxpayers to take a charitable deduction of up to $300, even if they do not itemize. For those who do itemize their deductions, the new law allows for cash contributions to qualified charities such as Pitt to be deducted up to 100% of your adjusted gross income for the 2020 calendar year. The new law temporarily suspends required minimum distributions (RMD) from IRAs for 2020. However, it retains the tax advantages of giving directly from your IRA if you are 70½ or older.
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