in

Will There Be a Second Stimulus Check? What Is the HEROES Act?

Millions of Americans received a direct payment of $1,200 under the first round of COVID-19 related stimulus spending adopted by the federal government. Now, under another piece of legislation, many Americans could be entitled to a second stimulus check.

The second round of economic impact payments is a provision under the HEROES Act, a $3 trillion stimulus package that would provide a wide range of relief and assistance programs to individuals and businesses affected by the COVID-19 pandemic.

What is the HEROES Act?

The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act is a $1 trillion bill intended to further address the economic impact of the novel coronavirus pandemic. It includes several provisions, including a second economic impact payment for individuals. It also includes an extension of the Federal Pandemic Unemployment Compensation, a hazard pay grant for essential employees, student loan relief and forgiveness, rent and mortgage assistance, and several tax credits for businesses.

The HEROES Act was approved by the House of Representatives in May and is currently awaiting a hearing in the Republican-controlled Senate. It is a second, larger stimulus package, following the $2.2 trillion Coronavirus Aid, Recovery and Economic Stability (CARES) Act, which was signed into law by President Donald Trump on March 27.

Editor’s note: Looking for a small business loan? Fill out the questionnaire below to have our vendor partners contact you about your needs.

 
How would a second stimulus check work?

For many Americans, a second economic impact payment would look much the same as the first round of coronavirus stimulus provided under the CARES Act.

An individual taxpayer with income up to $75,000 annually would be eligible to receive a $1,200 economic impact payment. A taxpayer married filing with a household income up to $150,000 per year would be eligible to receive a $2,400 stimulus check. Under the HEROES Act, eligible taxpayers would only be required to provide a taxpayer identification number rather than a Social Security number.

The stimulus checks provided for under the HEROES Act would also include $1,200 for each dependent in the household, up to three dependents. This represents a significant increase over the CARES Act dependent payment of $500 per dependent. Additionally, the HEROES Act includes adult dependents, who were excluded under the CARES Ac, and it would expand the scope of who receives an economic impact payment to include college students and immigrants.

Stimulus money would not be considered as part of a taxpayer’s adjustable gross income, nor would it be used to determine eligibility for public assistance programs. Instead, stimulus money would be treated similarly to a tax credit from the IRS.  

Second stimulus check FAQs

Have questions about whether you qualify for a second coronavirus stimulus check and how to get it? So do many others.

Here are some of the most common questions regarding the second stimulus check provided under the HEROES Act as it is currently written.

Who gets a stimulus check?

Under the HEROES Act as written, individuals with a taxpayer identification number are eligible for an economic impact payment. Previously, a Social Security number was required to receive a stimulus payment; however, the HEROES Act, as written, does not require a Social Security number.

Individuals who earned up to $75,000 in 2019 would receive $1,200, while joint filers earning up to $150,000 would receive $2,400. The HEROES Act would increase the additional economic impact payment for dependents as well, from $500 per dependent under the CARES Act to $1,200 per dependent (up to three dependents).

Would I have to apply for my stimulus check?

No. Just like the first round of stimulus checks, if you are eligible, you will either receive a direct deposit into the bank account already on file with the IRS or a paper check mailed to your place of residence.

To determine whether your banking information is up to date, access the IRS website and check the Get My Payment portal. If your account information is on file, you would likely receive a direct deposit stimulus payment. If it is not, you would likely receive a paper check or an Economic Impact Payment card (EIP debit card) by mail.

How would I receive my stimulus check?

If the HEROES Act is adopted, you will receive your stimulus check in one of three ways: direct deposit into a bank account, paper check by mail or by prepaid debit card. If the IRS has your direct deposit information on file, you would most likely receive a direct deposit into that bank account.

Other taxpayers would receive a paper stimulus check mailed directly to their place of residence; to ensure your information is up to date, visit the IRS website and access the Get My Payment portal. Finally, some taxpayers would receive payment via an EIP debit card. Some eligible recipients received an EIP debit card in advance of the first round of stimulus checks approved under the CARES Act.

How would I track my stimulus check?

To track your stimulus check, visit the IRS website and click on the Get My Economic Impact Payment portal. Follow the prompts and enter the required information to receive an update on the status of your stimulus check.

The second round of stimulus checks will only be made available if the HEROES Act passes the Senate and is signed into law by President Trump.

If you have already received your first stimulus check, you will not receive another unless the HEROES Act is adopted.

How will the stimulus check affect my taxes?

Stimulus payments do not count as income. This means they are not considered taxable income by the IRS, nor are they used to determine eligibility for means-tested public assistance programs. In other words, accepting a coronavirus stimulus check should not affect your tax return next year.

What should I do if I didn’t receive the first stimulus check?

If you didn’t receive your first stimulus check, go to Get My Payment on the IRS’ website and enter the requested information to expedite the delivery of your paper check. If you believe you were eligible for an economic impact payment and did not receive one, contact the IRS for more details.

What are some of the other provisions in the HEROES Act?

While the potential for a second round of stimulus checks is certainly of prominent interest, there is much more in the $3 trillion stimulus package than individual payments. For small businesses still struggling to navigate the COVID-19 pandemic, the HEROES Act could offer additional relief and support.

“There are quite a few very important provisions here for small business,” said Tenley Carp, government contracts partner at the law firm Arnall, Golden and Gregory. “When you read it, there’s not a section like there was in the CARES Act you could point to … but I think some of the provisions in the HEROES Act would be hugely beneficial to small business.”

Paycheck Protection Program loan changes

The HEROES Act sets aside a portion of funding for the PPP loan program for very small businesses. Under the act, 25% of the funding would be reserved for businesses with 10 or fewer employees. The program was previously criticized after larger businesses received the lion’s share of the first round of funding, which was exhausted in less than two weeks.

Additionally, the HEROES Act would eliminate the requirement that 75% of funds acquired through the PPP loan program be earmarked specifically for payroll; this frees up small businesses to use the money for rent, mortgage payments or utilities and still receive loan forgiveness. It also would extend the end of the covered period for borrowers from June 30 to December 31. A similar provision is included in the Paycheck Protection Flexibility Act, which was signed into law by President Trump earlier this month.

Hazard pay for employees

Another key provision for employers, Carp said, is that the HEROES Act includes $200 billion for hazard pay to a wide range of essential employees. Known as the “COVID-19 Heroes Fund Act of 2020,” the hazard pay provision would extend a grant program to employers of essential employees.

Federal funding for approved employers could be used to offer an immediate $13 per hour increase in wages beginning from January 27, 2020, through 60 days after the public health emergency is declared over.

Essential workers making less than $200,000 annually would be eligible to receive as much as $10,000 total, while those making more than $200,000 annually would be eligible to receive an additional $5,000 total. Those funds would be subject to payroll taxes; however, the grant would not be included in the approved employers’ gross income.

Extension of COVID-19 unemployment benefits

The HEROES Act would also extend the additional $600 weekly payments that unemployment recipients have received on top of their regular state unemployment benefits. The HEROES Act allows independent contractors, part-time workers and self-employed individuals to apply for unemployment. The additional payments would be extended as long as March 2021.

The increase in unemployment benefits payments due to the Federal Pandemic Unemployment Compensation has caused an issue for small businesses that are reopening. Many employees are making just as much or more than they were while working and would prefer to remain on unemployment rather than return to work. This has been especially challenging for small businesses that received a loan through the PPP program and a primary reason behind eliminating the 75% payroll expense requirement.

“That’s why there is hazard pay in the HEROES Act,” Carp said. “If you can incentivize someone to come in and do their job while risking their health … at least you can make it financially worthwhile.”

Student loan forgiveness

The HEROES Act doubles down on student loan relief provided for within the CARES Act. While the CARES Act temporarily halted interest and payments for individuals with federal student loans, the HEROES Act would extend that suspension through September 30, 2021.

Additionally, the HEROES Act would cancel up to $10,000 for both federal and private loans. This could free up some much-needed liquid capital for small business owners currently paying student loans.

Rental and mortgage assistance

The HEROES Act includes $100 billion for an existing rental assistance grant program. Under the program, tenants who are unable to pay their rent are given vouchers to cover the cost of their rent and utilities. It would also continue the suspension on evictions for up to a year.

Additionally, the HEROES Act would include $75 billion for mortgage assistance, intended to prevent defaults and foreclosures. It would also extend the foreclosure and eviction moratorium provided under the CARES Act for a year.

Tax credits for small businesses

According to Carp, the HEROES Act would extend several tax credits to small businesses. These tax credits include:

An expansion of the refundable payroll tax credit for offering paid sick and family leave to employees through the end of 2021. 

An expansion of the employee retention credit, increasing the cap to $15,000 per employee, per quarter, up to $45,000 total per year. It also includes a partial credit based on the reduction of the business’s total gross receipts from the year prior. 

A business interruption credit for self-employed workers who prove a significant loss of income of more than 10% of their previous annual income. 

A 50% refundable payroll tax credit for qualified fixed costs for businesses closed due to the COVID-19 pandemic. A maximum credit of $50,000 is available.

How to prepare to take advantage of the HEROES Act

The HEROES Act is not yet law, and it won’t be if it isn’t passed by the Republican-controlled Senate. However, as a small business owner, it pays to be prepared.

If you are hopeful that the HEROES Act could benefit your business, Carp advised starting with reading the text of the bill and then contacting professionals who could help you prepare.

“I would tell [small business owners] to do two things: I would tell them to read the bill. Educate yourself to see how to best take advantage of provisions aimed at helping small business,” Carp said. “And contact your lawyer or accountant to make sure that you benefit from these HEROES Act provisions.”

This is a developing story regarding pending legislation.

Read more: business.com

Shop Games on Calendars.com

What do you think?

Written by WHS

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Loading…

0

Comments

0 comments

What Does Lennon, Roosevelt and Wonder Have in Common?

Gluten Free S’mores Pie | No Bake Option