What the stimulus package means to you

By Ben Olson
Reader Staff

The historic passage of the $2 trillion stimulus bill will provide aid to Americans in the time of COVID-19 crisis, but what specifically does it mean for you? Here’s a brief analysis of how the stimulus can help you and your business. For more information and advice for how to best take advantage of the package, consult with your tax professionals.

Direct checks

Taxpayers making $75,000 and below will receive a check for $1,200, while married couples making $150,000 or below will receive $2,400. Individuals and couples under this earnings limit will also receive $500 per child age 16 or under. The rebate will reach approximately 140 million households, according to estimates from the Tax Foundation, constituting about 93% of all taxpayers in the U.S. The money will not count as taxable income. Checks will phase out for incomes above $75,000 a year, with rebates declining $5 for every $100 above the income cap. The payment will stop altogether for single people earning $99,000 or married people with no children who earn $198,000. You can’t get a payment if anyone claims you as a dependent, even if you’re an adult. No action is necessary, as the IRS will transmit the payment via direct deposit, using bank account information from the taxpayer’s 2018 or 2019 return.

Unemployment benefits

The stimulus plan includes far more workers than are usually eligible for unemployment benefits, including those that are self-employed and part-time workers. While normal state unemployment benefits earn workers an average or about 50% of their former pay, the goal of this program passed with the stimulus package is to fill the gap to ensure workers are making nearly what they made before the coronavirus outbreak. Eligible workers will receive an extra $600 per week on top of their state benefit for up to four months, covering added unemployment benefits until July 31.

Student loans

The federal government has issued an automatic payment suspension for any student loan held by the federal government until Sept. 30. The bill states that interest “shall not accrue” on the loan during the suspension period.

Small business loans and payroll protection

The stimulus package includes over $370 billion in government-backed bank loans that – in some cases – borrowers won’t have to repay. Issued by your local bank and backed by the Small Business Administration, the Paycheck Protection Program loans are intended to pay for basic expenses like payroll, rent, utilities and more. It’s best to talk with your banker or tax professional to see which of the numerous assistance package is best for you, but generally, business owners won’t have to provide personal guarantees as collateral, and there are no fees associated with the loans. Interest rates are capped at 4%. 

The program comes with some restrictions: loans are limited to $10 million, to businesses with 500 employees or less. Businesses that have recently laid off workers would be required to repay a larger portion of their loans, and loans covering salaries of over $100,000 a year wouldn’t qualify for forgiveness. Businesses would not have to repay loans covering up to an 8-week period beginning with the origination of the loan – which means the amount a borrower spends for eligible costs (payroll, mortgage payments, rent, utilities, etc.) will be forgiven, but you have to spend it during the 8 weeks and must retain the same number of employees until June 30 to be eligible for loan forgiveness. 

There are a lot of moving parts with this section, so be sure to speak with your local banker or tax professional to see which plan is best for your business.

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Locally, the Bonner County Economic Development Corporation announced they have resources available to local business owners needing a push in the right direction.

The team has reached out to business owners the past two weeks to learn their thoughts on the crisis. Loss of revenue topped the list of concerns, according to Andrea Marcoccio, executive director of Bonner County EDC. 

“Business owners are worried about their ability to weather the crisis when revenue is diminished or even nonexistent,” Marcoccio said.

Marcoccio encouraged anyone seeking help navigating the stimulus package to consult www.bonnercountyedc.com daily for resources, including overviews of what the stimulus might mean for your business.

All business owners are asked to complete a survey at bonnercountyedc.com so the team can have a clearer understanding of how the pandemic has affected our local businesses.