Coronavirus Stimulus 2.0

At the end of December, the latest $900 billion Covid Relief bill was passed out of congress and days later, signed into law by the President. Though smaller than the stimulus package passed in March 2020, this will provide much needed relief for many Americans. The main focus of the package is to issue direct payments to taxpayers, offer another chance for small businesses to receive a tax-free loan, and to extend Unemployment Benefits.

Most notably excluded from the package is an additional waiver of Required Minimum Distributions (RMDs) or any further Student Loan Relief. Clients should be prepared to resume taking their RMDs as normal for 2021. Federal Student Loan payments will once again be required beginning February 1, 2021 with interest rates returned to normal.

Direct Payments to Taxpayers

  • Based on 2019 Adjusted Gross Income (AGI)
    • $600 to individuals with incomes up to $75,000 per year, phasing out entirely for those earning more than $87,000
    • $1,200 to married couples earning up to $150,000, phasing out entirely at $174,000
    • Families will receive an additional $600 per child (under 17 years old)
  • The IRS website re-launched the ‘Get My Payment’ tool so people can check the status of their payment. The tool can show 1 of the following 3 messages:
    • Direct Deposit Information
    • The date the payment was mailed – which could take up to 3-4 weeks
    • Taken directly from the IRS: “If GMP shows “Payment Status #2 – Not Available,” then you will not receive a second Economic Impact Payment and instead you need to claim the Recovery Rebate Credit on your 2020 Tax Return.”

Small Businesses – Up to $284 billion for a second round of PPP

  • For small businesses who did not apply for round one of financing, the application window is reopened. Qualifications and rules are slightly stricter, though generally the same. More information can be found here
  • If a loan was received during the initial Paycheck Protection Program, another can still be received during round two

Unemployment Benefits

  • Regular unemployment insurance benefits extended another 11 weeks
    • This includes an extension to the Federal Pandemic Unemployment Assistance to provide an additional $300 supplement
    • Also extends the inclusion of furloughed employees and self-employed workers including contractors, freelancers, and gig workers (i.e. Uber/Lyft drivers), who typically aren’t eligible

 

News Worth Noting

Last night, rioters stormed the halls of Congress in an attempt to protest the legitimacy of the election – though calling it a protest is disrespectful to the thousands who have been peacefully standing up for justice and equality throughout 2020. The U.S. Capitol was evacuated in response to the domestic terror attack and shut down for 6 hours. Thankfully this morning, just after 3:40 am, Vice President Pence announced President-Elect Joe Biden had won the presidency after Congress completed counting the Electoral College votes. Mr. Biden will still be sworn in on January 20th.

 

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment, strategy, or product or any non-investment related content, made reference to directly or indirectly in this newsletter, will be suitable for your individual situation, or prove successful. This material is distributed by PDS Planning, Inc. and is for information purposes only.  Although information has been obtained from and is based upon sources PDS Planning believes to be reliable, we do not guarantee its accuracy.  It is provided with the understanding that no fiduciary relationship exists because of this report.  Opinions expressed in this report are not necessarily the opinions of PDS Planning and are subject to change without notice.  PDS Planning assumes no liability for the interpretation or use of this report. Consultation with a qualified investment advisor is recommended prior to executing any investment strategy. No portion of this publication should be construed as legal or accounting advice.  If you are a client of PDS Planning, please remember to contact PDS Planning, Inc., in writing, if there are any changes in your personal/financial situation or investment objectives.  All rights reserved.

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