What You Need to Know About the New COVID Relief Bill

A large banner with a COVID stimulus check and the text "What You Need to Know About the New COVID Relief Bill".

On December 27, 2020, President Trump signed the $900 billion Covid Relief Bill after it passed Congress. Notably, the bill authorizes a second round of stimulus payments for taxpayers — and more Paycheck Protection Program Loans for small businesses. Here’s everything you need to know:

For Individual Taxpayers:

  • The second stimulus check entails a single payment of $600 for every taxpayer earning less than $75,000 per year.
    • If your income exceeds $75,000 per year, your stimulus amount decreases by $5 per $100 over the threshold. This means taxpayers earning over $87,000 per year or more will not receive any stimulus funds.
  • Married taxpayers filing jointly will receive a single payment of $1200. Married couples with no children earning a combined total of $174,000 per year or more will not receive any stimulus funds.
  • Taxpayers will also receive an additional $600 payment per dependent aged 16 years or younger.

If the IRS already has your direct deposit information, you can expect your stimulus check within a few weeks. Checks sent via mail may take several months to arrive.

In addition to the stimulus checks, there are several key takeaways from the bill pertinent to taxpayers:

  • Those receiving unemployment benefits will receive an additional $300 per week through March 14, 2021. In addition, the Pandemic Emergency Unemployment program has been expanded to include sole proprietors, independent contractors, and gig workers.
  • The federal moratorium on evictions has been extended to January 31, 2021.
  • No student loan relief is currently planned for January 2021, but this may change. If it does, the government will contact loan providers directly.

If you have any additional questions, please reach out to your Community Tax Case Advocate or visit https://www.irs.gov/coronavirus/get-my-payment-frequently-asked-questions#bank.

For Business Owners:

Good news — there will be a second round of Paycheck Protection Program loans! However, the requirements are more stringent this time around.

To qualify for the second round of PPP loans, your business must have no more than 300 employees, no more than $2 million in loans, and be able to prove a 25% decrease in gross receipts in at least one quarter in 2020 compared to the same quarter in 2019.

It is also worth mentioning that forgiven loans will NOT be taxable this time around.

If you aren’t up to date on your taxes, call Community Tax today at (844) 329-2074 or click here for your free consultation. Our dedicated team of tax professionals will help you.