Q&A on COVID-19 stimulus bills
HOSPITALS AND HEALTH SYSTEM
What hospital and health system assistance has been passed?
Congress has provided hospital and health system assistance in multiple forms. First, the Provider Relief Funds includes a total of $178 billion for a grant program to support health care providers. Eligibility for this funding is expansive, including public entities, Medicare- and/or Medicaid-enrolled suppliers and providers, and other entities designated by the Secretary, so long as the entity provides diagnoses, testing, or care for individuals with possible or actual cases of COVID-19. Funds may be used for health care–related expenses or lost revenues that are attributable to coronavirus, but only to the extent that another entity is not obligated to or has in actuality reimbursed the provider. Note that this funding is not limited to hospitals.
Second, the CARES Act includes a 20 percent add-on to the Medicare inpatient reimbursement rate for discharges of an individual diagnosed with COVID-19 during the declared emergency period. This payment should narrow or eliminate the gap between standard reimbursement rates and the cost of providing care for hospitals.
Third, Congress has taken two steps to delay or offset scheduled changes to Medicare reimbursement rates. Through March 2021, the Medicare sequester will be paused, eliminating a 2 percent reduction to reimbursement rates for both fee-for-service providers and Accountable Care Organizations. In addition, a 3.75 percent across-the-board supplement will be added for all providers paid under the 2021 Physician Fee Schedule.
What is the formula for supporting hospitals and health systems?
No formula for allocating the full $178 billion fund to support health care providers is provided in statute. HHS will be able to disperse funding prospectively or retroactively following an application from an eligible entity that includes a statement justifying the need of the provider for the payment. HHS will review applications for and make payments from this funding on a rolling basis.
What support has been included for community health centers?
The CARES Act provided $1.32 billion in additional funding for community health centers. In addition, mandatory appropriations for the Community Health Center Fund, which were set to expire on May 22, 2020 have been extended through September 30, 2023.
How much can I get from Unemployment Insurance?
Under the latest relief bill, the federal government will provide an additional $300 per week for all workers receiving state and federal unemployment benefits by extending the Pandemic Federal Pandemic Unemployment Compensation program (FPUC) created under the CARES Act. This $300 federal supplement will last from December 26-March 14, 2021. Under the CARES Act, the federal government provided an additional $600 per week for workers receiving state benefits through FPUC which expired on July 31, 2020.
In Delaware, the state weekly benefit ranges from $20 to $400.
What if I’m not eligible for traditional Unemployment Insurance?
The CARES Act expanded unemployment insurance benefits to a wide range of Americans not covered by traditional UI. Under the Pandemic Unemployment Assistance (PUA) Program created by the CARES Act, states are permitted to offer unemployment benefits to individuals who are self-employed, seeking part-time employment, or who otherwise would not qualify for regular unemployment compensation. To qualify for PUA benefits, you must not be eligible for regular unemployment benefits and be unemployed, partially unemployed, or unable or unavailable to work because of certain health or economic consequences of the COVID-19 pandemic. PUA was set to expire on December 31, 2020 and the latest relief bill extends the program to March 14, 2021.
The CARES Act also created the Pandemic Emergency Unemployment Compensation (PEUC) program, which provides 13 additional weeks of unemployment benefits to individuals who exhaust their regular state benefits. The PEUC program was also set to expire on December 31, 2020 and the latest relief bill extends the program to March 14, 2021.
After the CARES Act passed, the Delaware’s Department of Labor sent out guidance on their new unemployment claims system for Independent Contractors and Self-employed seeking unemployment benefits through the CARES Act. Please continue to check the Delaware Division of Unemployment Insurance page for updates on implementing the latest federal unemployment relief programs here.
Is there a waiting period?
Under the CARES Act, the federal government offered to cover the costs of first-week UI benefits for any state that does not require a waiting period. Delaware no longer has a waiting period.
How do I file for unemployment insurance?
To receive unemployment insurance benefits, you need to file a claim with the unemployment insurance program in the state where you worked. Delawareans can file for unemployment benefits online at the following link: https://ui.delawareworks.com/. Questions can be answered via email at firstname.lastname@example.org or phone at 302-761-8446.
What support is there for small businesses?
See my small business webpage.
What type of assistance will independent contractors be eligible for?
They are eligible for PPP loans. They are also eligible for Unemployment Compensation under this law, as well as many of the tax benefits.
What assistance is there for nonprofits?
Nonprofits are eligible for the same EIDL loans and grants and PPP loans as small businesses. Applying nonprofits will be asked to provide a SSN for the head of the organization or the person applying for the loan. This is used just to keep track to make sure the authorized person is applying, and the SBA says it does not get shared with credit bureaus or affect the credit of the person applying.
Nonprofits can also access the Employee Retention Tax Credit. Additionally, charitable organizations will benefit from an enhanced charitable giving incentive in 2020 and 2021: individual taxpayers who do not “itemize” their returns will be able to claim up to a $300 charitable deduction, and married couples can claim up to a $600 deduction.
Where should I go to apply for small business assistance?
The Delaware SBA District Office website is an ideal first stop for any of the SBA-provided benefits: https://www.sba.gov/offices/district/de/wilmington.
Are there rules on affiliation or multiple locations that limit who is eligible?
Yes. For PPP loans, most businesses and nonprofits with more than one location will have to add their employees from each location for purposes of determining whether they fall below the employee cap in their industry sector. For businesses in the food service and hospitality sector, this restriction is waived.
There are also restrictions if a small business is controlled by another entity, or even if an equity investor has a large enough stake in the business, as well as other investments that could, in effect, push the business under consideration above the size eligibility threshold. It is recommended that you visit SBA.gov for rules on eligibility for PPP loans.
Is there any relief for student loan repayments?
The Department of Education and its loan servicers will suspend all payments on federally owned student loans through January 31, 2020. This includes all Direct Loans and Federal Family Education Loan program loans owned by the Department of Education (but not those owned by private entities). Interest will not accrue on amounts owed during this time. The CARES Act, passed March 2020, also encourages employers to implement loan repayment programs, allowing them to exclude up to $5,250 of student loan payments from their taxable income.
Is there any financial relief for renters and homeowners?
The CARES Act provided protections from eviction and late fees due to nonpayment of rent for most tenants in federally subsidized or federally backed housing from March 27 to July 24, 2020. For homeowners, the CARES Act allowed borrowers with a federally backed mortgage loan to request forbearance on the loan if they are experiencing financial hardship, directly or indirectly related, to the COVID-19 emergency. In addition, a servicer of a federally backed mortgage loan may not initiate a foreclosure process until December 31, 2020 or execute a foreclosure-related eviction or sale for not less than the 60-day period beginning March 18, 2020.
Under the latest relief bill, Congress provided $25 billion for new emergency rental assistance. The funds will be passed through the Coronavirus Relief Fund (CRF) at the Department of the Treasury and then disbursed to states by formula. Small states like Delaware will receive a minimum of $200 million in rental assistance. Renters will then apply to the entities that state and local grantees select to administer the program. Eligible households for this assistance are defined as renter households who: (1) have a household income not more than 80 percent of the area median income; (2) have one or more household members who can demonstrate a risk of experiencing homelessness or housing instability; and (3) have one or more household members who qualify for unemployment benefits or experienced financial hardship due, directly or indirectly, to the pandemic. A household may receive up to 12 months of assistance.
Are evictions permitted during the pandemic?
The latest relief bill extends the Center for Disaster Control and Prevention (CDC)’s eviction moratorium to January 31, 2021. Under the moratorium, which took effect on September 4, the CDC will use its public health authorities to prohibit evictions of qualifying renters from any rental property if the renter cannot pay their rent. Evictions can still proceed for anything other than nonpayment of rent. In order to be eligible for the rental eviction moratorium, each adult renter in the household must sign this Declaration provided by CDC (or a similar document) that they meet all criteria for eligibility and provide it to their landlord.
In Delaware, as part of Governor Carney’s 27th modification to the State of Emergency Declaration, new eviction cases can be filed but must be stayed in courts. Tenants cannot be physically removed from properties. No late fees or interest can be charged on past due rent balances.
The Families First Coronavirus Response Act (FFCRA) signed into law on March 18, 2020 required certain public employers and private employers with fewer than 500 employees to provide their employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. This latest bill did not extend this requirement for employers, so it is set to expire on December 31, 2020.
What if an employer wants to voluntary offer expanded paid sick leave?
To help alleviate some of the burden of the leave requirement on employers who were mandated to offer the expanded paid sick and family leave, the FFCRA provides refundable payroll business tax credits. This credit is for small nonprofit and for-profit businesses with fewer than 500 employees. Those with fewer than 50 may claim an exemption.The most recent relief bill extends the tax credits through March 31, 2021 for businesses that want to voluntarily offer the expanded paid sick and family leave using the FFCRA framework.
The IRS should issue new guidance for the extension of this credit. Please visit https://www.irs.gov/coronavirus/new-employer-tax-credits
CASH PAYMENTS TO AMERICANS
Who qualifies to receive a check and how much will an individual receive?
The December 2020 relief bill provides a $600 economic rebate for individuals making up to $75,000 per year and $1,200 for couples making up to $150,000 per year, as well as a $600 economic rebate for each child dependent under the age of 17. Adult dependents were not included in the relief package. The package also ensures that individuals who have a Social Security Number (SSN), but are part of a family in which not all members have an SSN, a “mixed-status” family, receive their $600 economic rebates instead of being excluded from the relief altogether. This new provision will allow for the inclusion of “mixed-status” families and will be retroactively applied to the direct payments enacted through the CARES Act.
More information on economic impact payments is available from the Internal Revenue Service.
The Treasury and IRS have launched a web tool allowing quick registration for Economic Impact Payments for those who don't normally file a tax return.
What are qualified income levels based off of?
There is no minimum income necessary to receive the rebate. However, the rebate phases out at a 5 percent rate above adjusted gross incomes of $75,000 for single filers, $112,500 for heads of household, and $150,000 for joint filers.
Can those collecting Social Security or disability receive a check?
Yes, in the case that an individual is receiving Social Security as part of retirement or through the Social Security Disability Insurance, the IRS will use an individual’s 2019 Social Security Benefit Statement to determine the recovery rebate to those individuals.
Will SSA administer the funds to my EBT/Debit card that I receive my SSA benefits through?
The IRS will administer the payment either via electronically in the account designated on your SSA-1099 or RRB-1099 forms or mail the check to the address included on your SSA-1099 or RRB-1099 forms. The IRS is frequently updating irs.gov/coronavirus with information related to COVID-19 to help taxpayers.
How does an individual claim their check?
You do not need to claim the check (unless you have not either filed a 2018 or 2019 tax return). These will be automatic payments sent out by the IRS directly to you based on the direct deposit or address provided in your tax returns or Social Security Benefits statement.
The Treasury and IRS have a new web tool allowing quick registration for Economic Impact Payments for those who don't typically file a tax return.
How long will it take for this check to be delivered?
Rebates sent via direct deposit will take a few weeks. Rebates sent via checks may take a few months. The IRS will send a notice to taxpayers no later than 15 days after their check has been distributed, including the method by which the check was sent, the amount, and a point of contact at the IRS.
Will the recovery rebates be taxed or reduce my tax refund in any way?
No. The stimulus payment is a unique, fully refundable tax credit. You will not be taxed on the rebate. And the rebate will not affect your 2019 or 2020 taxes in any way. If you are expecting a refund for those tax years, the amount will not change because of recovery rebates.
Will I be eligible if I haven’t finished filing my 2018 taxes?
The bill only refers to administering checks based off of 2018 and 2019 tax returns. If you have not yet finished filing your 2018 tax returns, consult with a tax advisor about filing immediately so that you may be eligible for the recovery rebate. For further information check irs.gov or contact IRS by phone (800-829-1040) for more information.
I think the amount of my Economic Impact Payment is incorrect. What can I do?
If you did not receive the full amount to which you believe you are entitled, you will be able to claim the additional amount when you file your 2020 tax return. This is particularly important for individuals who may be entitled to the additional $600 per qualifying child dependent payments. For VA and SSI recipients who don’t have a filing requirement and have a child, they need to use the Non-Filer tool on IRS.gov in order to have the $600 for a dependent added automatically to their $600 Economic Impact payment. The IRS encourages people to review their “How do I calculate my EIP Payment” question and answer.
Will I be eligible if I have a lien against me, but I am in non-collect status?
Yes. Rebates will not be subject to garnishment, except if back child support is owed.
I withdrew my retirement in 2018 - so my income that year was inflated. Is there any waiver for one-time sources of income?
In this case, the taxpayer should file a 2019 tax return.
AID TO STATES AND MUNICIPALITIES
How much money do states and municipalities receive?
To assist States, Tribes, and local governments that must pay for new expenses related to their COVID-19 response, the CARES Act provided $150 billion for state and local assistance through the new Coronavirus Relief Fund (CRF) at the Department of the Treasury. Delaware received the small state minimum of $1.25 billion, with $322 million awarded directly to New Castle County.
Under the latest relief bill, the Treasury fund for state and local governments was not replenished. However, the deadline to expend CRF money was extended to December 31, 2021. Also, states and localities will benefit from other funding streams in the December 2020 relief bill, including those for schools, state departments of transportation, and public health purposes.
What can the allocated funding be used for?
The CRF money from the CARES Act can be used to cover the costs that are necessary expenses incurred due to COVID-19 and were not accounted for in the state, territory, or local government unit budget.
How can a state, territory, or local government unit apply?
The Department of the Treasury is in charge of disbursement and requires the head of the state, territory or local government to provide Treasury with a signed certification of the proposed uses of the funds.
EDUCATION & CHILDREN
What support has been provided for education?
Congress has provided nearly $113 billion to support students and educators in light of the pandemic. Just over $7 billion of this has been allocated to Governors Emergency Education Relief Funds, to be used to meet the unique needs of individual states.
What assistance has been provided for child care and early childhood programs?
Congress has provided in excess of $13 billion for child care through the Child Care and Development Block grant program. The relief bills also included $ 1 billion for Head Start programs, including to support summer programming.
What support is included for my local schools?
2020’s response bills have included a total of more $67.5 billion in funding for public K–12 schools across the country, more than $225 million of which will be allocated for schools in Delaware. These dollars will be distributed in a manner that provides additional support for students in low-income communities.
Many independent schools have qualified for assistance under the Payroll Protection Program, discussed above. They may also be able to receive support and funding through the Governors Emergency Education Relief Fund, within which $2.5 billion has been reserved for allocation to private schools, with a priority on those serving high numbers of low-income students.
Is there any aid that the University of Delaware or Delaware State are eligible for?
Yes. A total of approximately $37 billion has been reserved for higher education, with most of those funds available on a broad basis; both UD and DSU will benefit from these funds. In addition, nearly $3 billion has been reserved for additional support for historically black colleges and universities (HBCUs) and minority-serving institutions (MSIs), including Delaware State. Institutions must use substantial portions of the money they receive from these programs for grants to students impacted by the virus and have broad flexibility for how the other half may be used to respond to the coronavirus.
What forms of relief are college students impacted by COVID-19 eligible for?
College and university students impacted by COVID-19 may be eligible for several types of relief. First, students may receive financial support through the funds their institutions receive from the federal government; substantial portions of such funds are required to be passed on to students in the form of grants. Those grants can be used for expenses related to the disruption of campus operations due to COVID-19 (including eligible expenses under a student’s cost of attendance, such as food, housing, course materials, technology, health care, and child care).
Second, institutions have new flexibilities to help students through campus-based aid programs. Colleges can elect to award affected students emergency Supplemental Education Opportunity Grants in amounts up to the maximum Pell Award, disregarding the FAFSA’s standard amount of need calculation. In addition, institutions may continue to make Federal Work Study payments to students who are unable to complete their normal work as a result of outbreak-related disruptions.
Third, students forced to drop out as a result of COVID-19 will receive certain waivers from normal federal student aid rules for aid associated with the semester a student is unable to complete because of the outbreak. Those semesters will not count against students’ lifetime eligibility limits for Pell grants or subsidized loans. In addition, students will not be required to return Pell grants or federal student loans to the Department of Education for terms they were unable to complete, and the Department will cancel any federal Direct Loan taken out by a student for the disrupted semester.
What protections do borrowers have with respect to federal student loans?
The Department of Education and its loan servicers will suspend all payments on federally owned student loans through January 31, 2020. This includes all Direct Loans and Federal Family Education Loan program loans owned by the Department of Education (but not those owned by private entities). Interest will not accrue on loans during this period. Each of the months during the period of the suspension will be considered as if the borrower had made a payment for the purposes of the Public Service Loan Forgiveness program and for the rehabilitation of loans in default. During the suspension, the Department will report suspended payments to credit agencies as if they were regularly scheduled payments by the borrower. All involuntary collection activities, such as wage garnishments, on loans with suspended payments will stop for the duration of the suspension period.
In addition, borrowers will be able to receive up to $5,250 in employer assistance in repayment of student loans without incurring tax liability on that assistance through 2025.
I’m an AmeriCorps member and I’m unable to complete my term of service as a result of COVID-19. What happens to my education award?
AmeriCorps members who are unable to meet the 1700-hour minimum requirement for a Segal Education Award as a result of program disruption associated with COVID-19 will still be able to receive the award. Note that the Segal Award remains taxable income.