The U.S Small Business Administration (SBA) helps businesses, renters, and homeowners in America recover from declared disasters by providing low-interest loans. There are loans that are available for assistance facing several different types of hardships from declared disasters. SBA loans can be used to help fund costs needed for personal property, real estate, machinery and equipment, economic injury, active military duty and/ or inventory. The Federal Emergency Management Agency (FEMA) is in place to provide disaster assistance funding, but in cases where additional assistance is needed SBA loans can help with supplemental funding. More recently, as a result of the novel coronavirus 2019 (COVID-19) pandemic, the government has passed into federal legislation a bipartisan two trillion dollar economic relief plan that will further assist Americans affected by the coronavirus pandemic.
The Stimulus Package
The stimulus package, officially known as the CARES Act (Coronavirus Aid, Relief and Economic Security Act), was signed into law on Friday March 27, 2020. It encompasses a large variety of economic relief for Americans including stimulus payments to individuals, student loan changes, expanded unemployment coverage, altered retirement account rules, $350 billion for the Paycheck Protection Program (small business loan program), and more. Below is a closer look into some of the aspects of the stimulus package, including how it may benefit Americans:
- Stimulus payments: there is currently set to be one payment made to each qualifying adult of $1,200 or less. Individuals that claim children qualify for an additional $500 per child. In order to qualify for the full $1,200 amount, an individual must have an adjusted gross income of $75,000 or less, when filing as a single, and an adjusted gross income of $150,000 or less when filing as married. Head of households earning $112,500 or less will be eligible for the full amount. Individuals that earn above those thresholds, but less than $99,000 filing as a single, $198,000 filing as married without children, or $218,000 filing as jointly with two children, will be eligible for a decreased payment, anyone that has earned an income greater than the later will be ineligible for stimulus payments, according to the Senate Finance Committee.
- Student loans: the federal government has suspended automatic payments for any student loan held by the federal government, until September 30th, at the earliest. The U.S. Department of Education has waived two months of payments and interest for many federal student loan borrowers.
- Unemployment coverage: depending on an individual’s state of residence and employment, a worker that is unable to work, unemployed or partially unemployed as a result of COVID-19 is likely to receive benefits. The coverage expands on the unemployment benefits that were previously in place, which covered between forty to forty-five percent of a workers weekly pay. The federal pandemic unemployment funding is meant to provide unemployment payments significantly closer the worker’s full wage.
- Retirement: Individuals are now eligible to withdraw up to $100,000 from retirement funds without being subject to paying the 10% penalty, provided it is needed for reasons related to the coronavirus outbreak. Individuals will, however, still be responsible for paying tax, but the tax owed can be paid back over a period of three years. Furthermore, the rule of being unable to withdraw more than 50% of one’s retirement fund balance has been suspended.
- Paycheck Protection Program: the Paycheck Protection Program is intended to incentivize small business owners to keep their workers on the payroll by essentially offering loan forgiveness. Of the two trillion dollar federal coronavirus relief package, approximately $350 billion is earmarked for the Paycheck Protection Program.
For Further Information
If you follow your instincts and are clear with your needs you will likely find an accountant that is an excellent fit. While the task to connect with the right accountant may seem overwhelming, please keep in mind it will be worth it in the long run. The financial guidance that a good accountant will provide during one’s lifetime can result in significant financial gain. With the full range of tax and accounting services Allman & Allman APAC provide, we are certainly equipped with the expertise for which you may be in need. Seeking guidance from our firm will proved you the opportunity to work with individuals armed with broad and deep financial knowledge, able to provide advice on a wide range of issues. As a full-service public accounting firm, our professional services will surely help you succeed and thrive. Please feel free to reach out to Allman & Allman APAC at firstname.lastname@example.org or call us at our Palm Desert office at 760-773-1120 or our Torrance office at 424-334-1120. We look forward to hearing from you.