What Does the Federal Stimulus Package Mean for You?

Clubs (and most other workplaces) are closed until the end of April.

While a lot of information about stimulus payments and unemployment is changing quickly, here's a quick overview of what we know now: 

Q: Stimulus payments to individuals. How much can I expect to receive?

Depending on your income level, you may be eligible to receive as much as $1,200 (single filers / under $75,000 adjusted gross income) or $2,400 (joint filers / under $150,000 adjusted gross income) with an additional rebate of $500 per qualifying child.

The IRS will use 2018 tax return information if the taxpayer has not yet filed for 2019. The rebate phases out at $50 for every $1,000 of income earned above those threshold. 

Use this calculator here to determine your rebate using your adjusted gross income, number of dependents, and filing status.

If you are eligible, you should expect to receive payments by April 17. If the Internal Revenue Service already has your bank account information from your 2019 or 2018 tax returns, it will transfer the money to you via direct deposit based on the recent income-tax figures it already has. [1]

Q: I’m not eligible for any payment- now what?

A: Good news - the CARES Act has also expanded unemployment coverage

Groups that were previously ineligible for unemployment are now eligible to apply. This is great news as it now includes, most importantly, gig workers that are usually classified as independent contractors. While eligibility will be determined on a case-by-case basis, here are additional general changes to unemployment benefits under the new bill: [2]

• An extra $600 per week on top of their state benefit (For four months only; payments begin 4/5/2020 and last until 7/31/2020)
• 39 weeks of benefits (an additional 13 weeks on top of regular state unemployment eligibility of 26 weeks)

How do I apply for unemployment? [3]

Check this link here for state-by-state guidance. Note: Most states have made changes to their Unemployment Insurance program in order to provide benefits to more workers affected by COVID-19/Coronavirus. In general, you’ll still follow the following guidelines in order to file for unemployment benefits: 

• Contact your state's unemployment insurance program as soon as possible after becoming unemployed.
• File your claim with the state where you worked. 
• When you file a claim, you will be asked for certain information, such as addresses and dates of your former employment. To make sure your claim is not delayed, be sure to give complete and correct information.
• It generally takes two to three weeks after you file your claim to receive your first benefit check. Some states require a one-week waiting period. However, some states may waive the waiting period.

What you should know about filing for unemployment?

Be sure to read everything carefully

Guidelines and rules vary from state to state and are subject to change in light of recent events. Be sure to read everything carefully, follow instructions, complete forms completely and accurately, and keep records and notes for yourself. 

You will likely need to be up to date with taxes and have payment stubs

The Labor Department should be publishing guidance in the upcoming weeks about the specific documentation needed to prove wages and work history.  Tax forms such as 1099s and some sort of payment stub should are likely to be used. 

Expect delays

Unemployment claims have hit an unprecedented high. Nearly 3.3 million people filed first-time claims for unemployment last week — shattering the previous record, set in 1982, by around 2.6 million people. [4] As a result unemployment offices across the country are overwhelmed and experiencing significant backlogs. Some states have implemented filing rules to help with processing claims. 

You’ll need to file a weekly claim

Once approved for unemployment benefits, you’ll be required to submit a weekly claim. To make things more efficient and easier, keep notes handy with info that you need to file your claim.

You will need to pay income tax on your unemployment income

Be aware that you will be obligated to pay income tax on any funds you receive from unemployment. Most states offer the option for this to be taken out upfront. 

Footnotes:

[1] NY Times - F.A.Q. on Stimulus Checks, Unemployment and the Coronavirus Plan

[2] Tax Foundation - Congress Approves Economic Relief Plan for Individuals and Businesses

[3] Forbes - Your Guide To The Federal Stimulus Package

[4] CNBC - What you need to know about unemployment benefits in the coronavirus relief bill