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USAA continues to provide assistance during the COVID-19 pandemic, including processing stimulus payments as they arrive (referred to as Economic Impact Payments or EIP by the IRS). We understand the challenges many may face as a result of this pandemic and have solutions available to help make ends meet.
What to Know About COVID-19 Economic Impact Payments
A second round of EIP payments was approved and could start reaching Americans in the next several days. Eligible members will receive a payment of up to $600 for individuals, up to $1,200 for married couples filing jointly and up to $600 per dependent child, based on earnings from your 2019 tax filing.
How You’ll Receive the Payment
If you qualify under the new law, your payment will be deposited directly into the same banking account used for your 2019 tax filing, like with the first EIP payment. Note that payments may be distributed by the IRS in phases, so if someone you know received theirs, but you haven’t, it’s not a cause for concern. After logging in, you can set up an alert to be notified when there is account activity, including deposits.
We’re continuing to provide full access to EIP funds for deposit account holders in good standing, even if those accounts have a negative balance.
Manage Your Deposit Digitally
If you received your tax refund via paper check and did not set up direct deposit capability with the IRS through “Get My Payment,” you will receive a paper check in the mail for the EIP payment signed into law December 2020. Members with a USAA deposit account can easily deposit checks securely by logging onto USAA’s mobile app and using Deposit@Mobile® or logging onto your computer and using Deposit@Home®. Members who need the mobile app can download it here.
If you did not receive a check or ACH from the April 2020 CARES Act, you can apply for a Recovery Rebate Credit on your upcoming tax return.
Find more information on USAA’s response to COVID-19, and how we’re focused on helping members and the community at usaa.com/coronavirus.
How Do the Elements of the New Coronavirus Response and Relief Supplemental Appropriations Act of 2021 Affect You?
Back in April, my colleague, JJ Montanaro, wrote about these unprecedented times in his excellent post on the CARES Act. Nine months later, the situation is even more complex. To help Americans get back on our feet, the president just signed a massive new bill – coming in at more than 5,550 pages. The new law combines fiscal year 2021 funding for the federal government with a $900 billion COVID-19 relief package. Since many of the benefits are extensions of the CARES Act (covered in JJ’s earlier article), I’ll focus on some of the important additions and changes stemming from this new law.
Key Updates for Individuals
- Direct cash payments. For those eligible individuals and households, a new round of EIP payments is coming. Payments of $600 will be made to individuals making $75,000 per year or less, with pro-rated amounts paid to those making up to $87,000, and $1,200 payments will be made to couples making up to $150,000 per year based on their 2019 income, with pro-rated amounts paid to couples making up to $174,000. Individuals and couples will also receive up to $600 for each dependent.
- Expanded unemployment benefits. The new law provides direct financial aid to hard-hit workers through the following benefits:
- Direct payments of $300 per week through the Federal Pandemic Unemployment Compensation (FPUC) program to supplement all state and federal unemployment benefits, starting after December 26, 2020, and ending March 14, 2021.
- Extension of the Pandemic Unemployment Assistance (PUA) program, which provides continued unemployment assistance to the self-employed, freelancers, gig workers, part-time workers and other individuals in non-traditional employment. The law also increases the number of weeks of PUA benefits an individual may claim from 39 weeks to 50 weeks.
- Continuation of the Pandemic Emergency Unemployment Compensation (PEUC) program available to workers who have exhausted their regular state unemployment benefits, increasing the number of weeks available for PEUC benefits from 13 to 24 weeks.
- Emergency rental assistance & eviction moratorium. For families impacted by COVID-19 and struggling to pay rent, the law establishes the new Emergency Federal Rental Assistance Program with funds to be distributed by state and local governments. The new measure includes assistance for past due rent and future rent payments, as well as utility and energy bills to prevent shutoffs. The law also extends the existing eviction moratorium in effect to Jan. 31, 2021.
- “Payroll tax holiday” repayment. As you may recall, under the “payroll tax holiday”, participating employers were able to defer 6.2% of employees’ paychecks starting Sept. 1, through Dec. 31, 2020. The deferral was mandatory for military service members, Defense Department civilians and federal workers. Under the new law, employers will have until December 31, 2021 to recoup the deferred taxes. Spreading the repayment across a much larger number of pay periods should help minimize the short-term decrease in income for workers.
- New provisions for small business. The bill includes $284 billion for the Small Business Administration Paycheck Protection Program (PPP) and extends the PPP through March 31, 2021. It provides the option of a second forgivable PPP loan for the hardest-hit small businesses and nonprofits, expands PPP eligibility and establishes dedicated set-asides for lending to underserved areas. Visit www.sba.gov to learn more.
This wraps up a small glimpse of this comprehensive stimulus package. If you think you are affected by any of the provisions in this new bill, you’ll need to do your homework and seek appropriate tax and legal counsel as needed. Visit http://www.usa.gov/coronavirus for more guidance.
About the Blogger: Robert Steen is a Certified Financial Planner® professional and is the Advice Director for Retirement & Complex Planning at USAA. He is responsible for developing USAA’s points of view regarding all aspects of retirement, estate and tax planning.
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