Q&A on COVID-19 stimulus bills
HOSPITALS AND HEALTH SYSTEM
What is the hospital assistance in the CARES Act?
Hospital assistance in the bill comes in multiple forms. First, the bill provides $100 billion for a grant program drawing on the Public Health and Social Services Emergency Fund. 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 bill 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.
In addition, the bill provides $3.5 billion in Child Care Development Block Grants (CCDBG) which can be used to provide child care assistance to health care sector employees and emergency responders.
Additional relief for hospitals was signed into law on April 23. This legislation includes $75 billion to provide resources to the frontlines, including Personal Protective Equipment.
What is the formula for supporting hospitals and health systems?
No formula for allocating the $100 billion fund to support health care providers is provided in the bill. 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 is included for community health centers?
The bill provides $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, have been extended through November 30, 2020.
How much can I get from Unemployment Insurance?
Benefit payments depend on your state’s system, but for the next four months each weekly payment will include a $600 increase to help deal with the economic effects of the crisis.
What if I’m not eligible for traditional Unemployment Insurance?
The third stimulus package extends benefits to a wide range of Americans not covered by traditional UI, including those who are self-employed or seeking part-time employment and those who have exhausted their state benefits.
Delaware’s Department of Labor has sent out guidance on their new unemployment claims system for Independent Contractors and Self-employed seeking unemployment benefits through the CARES Act. Read more here.
What if I’ve been out of work because of COVID-19 for several weeks already?
Many of the unemployment provisions in the CARES Act apply retroactively. For example, if you qualify for Pandemic Unemployment Assistance, you will be able to claim benefits from as far back as January 27th, 2020.
If I didn't file taxes in 2018 or 2019 and I don't receive social security payments but I receive cash assistance at the state level, will I get a check?
The bill does not make any statements about this. Check irs.gov or contact IRS by phone (800-829-1040) for more information.
How long will the expanded benefits be in place?
The extra $600 weekly benefit will continue for four months. The eligibility expansion, including support for self-employed workers and reduced waiting periods, will continue through the end of 2020.
Is there a waiting period?
In the third stimulus package, the federal government will offer 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 email@example.com or phone at 302-761-8446.
What support is there for small businesses?
The first coronavirus supplemental bill funded Economic Injury Disaster Loans, which are already available to apply for in most states. These loans provide small businesses with working capital of up to $2 million, at a low rate of 3.75% for businesses and 2.75% for nonprofits, to help overcome the temporary loss of revenue they are experiencing. Businesses must be deemed creditworthy and may have to provide collateral. Sole proprietors qualify for this as well. To apply, visit this page on the SBA website: https://www.sba.gov/funding-programs/disaster-assistance. You may also contact the Delaware SBA office at: https://www.sba.gov/offices/district/de/wilmington.
The CARES Act includes debt relief for businesses with an existing SBA-backed loan, which includes 7(a), 504, and microloans. The new law, which I authored, requires SBA to automatically cover your loan payments (principal and interest) for the next six months. If your lender has not informed you of this relief, contact them immediately. I encourage you to contact my office if you encounter any difficulty with this benefit.
The third supplemental bill also included a new loan, the Paycheck Protection Program (PPP) loan. Businesses, nonprofits, and even self-employed individuals or independent contractors are eligible to apply. The maximum loan amount for most borrowers is 2.5 times payroll costs in a typical (pre-pandemic) month. You can locate 7(a) lenders here: https://www.sba.gov/funding-programs/loans/lender-match. For more information, see the Treasury's small business webpage.
For detailed information, please see the Small Business Owner's Guide to the CARES Act.
For a list of banks offering PPP loans to new customers, please review this list.
If you are a Delaware small business company primarily engaged in the hospitality sector, you might be eligible for Delaware’s new emergency program called the H.E.L.P.
Si necesita información sobre la asistencia para pequeñas empresas, en relación con el Coronavirus, está disponible aquí.
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. They are only eligible for the debt relief provision if they have or take out an SBA microloan in the next six months. Additionally, charitable organizations will benefit from an enhanced charitable giving incentive in 2020: taxpayers who do not “itemize” their returns will be able to claim up to a $300 charitable deduction.
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.
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. In addition, the Delaware SBA holds a call every weekday for businesses and nonprofits about their programs at 3:00 pm. That number is: 1-202-765-1264 (Passcode: 827299626). On the Delaware SBA website, you can also find links to resource partners, who provide mentoring and counseling services to small business owners free of charge. They include SCORE, the Women’s Business Center, and the Delaware Small Business Development Center.
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 will be 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 CARES Act suspends payments on federal student loans through September 30, 2020. Interest will not accrue on amounts owed during this time. The package 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 relief for upcoming rent, mortgage, and utility payments?
Under the CARES Act, a borrower with a Federally backed mortgage loan may 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 or execute a foreclosure-related eviction or sale for not less than the 60-day period beginning March 18, 2020. The bill does not provide a moratorium on all rent and utility payments, although states are making this decision on a piecemeal basis.
In Delaware, Governor Carney’s sixth modification to his State of Emergency declaration order that went into effect March 25, 2020, prevents landlords from evicting Delawareans from their homes during this crisis. Landlords also may not charge late fees or interest during the State of Emergency. Residential utility service companies are also prevented from terminating service or charging fees for late-payments for services.
The Families First Coronavirus Response Act (FFCRA) requires certain employers to provide their employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. For more information and guidance issued by the U.S. Department of Labor, please visit https://www.dol.gov/agencies/whd/pandemic or see their Q&A on the FFCRA's emergency leave policies.
Who is a covered employer?
The paid sick leave and expanded family and medical leave provisions of the FFCRA apply to certain public employers, and private employers with fewer than 500 employees. Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern.
Who is a covered employee?
All employees of covered employers are eligible for two weeks of paid sick time for specified reasons related to COVID-19. Employees employed for at least 30 days are eligible for up to an additional 10 weeks of paid family leave to care for a child under certain circumstances related to COVID-19.
How much paid sick leave are employees eligible to take?
Two weeks (up to 80 hours) of paid sick time at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or
Two weeks (up to 80 hours) of paid sick time at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine, or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition
How much paid family and medical leave are employees eligible to take?
FFCRA extends Family and Medical Leave Act (FMLA) leave to include leave needed to care for the employee's minor child whose school or care provider is unavailable due to a COVID-19 public health emergency.
Employees may take up to an additional 10 weeks of paid expanded FMLA at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19
What are the qualifying reasons for leave?
Under the FFCRA, an employee qualifies for paid sick time if the employee is unable to work (or unable to telework) due to a need for leave because the employee:
is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
has been advised by a health care provider to self-quarantine related to COVID-19;
is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or
is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.
Under the FFCRA, an employee qualifies for expanded family leave if the employee is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19.
Are there documentation requirements an employee must provide to prove they are caring for an individual or child whose school or place of care is closed?
FFCRA does not provide documentation/certification requirements for the paid sick leave provisions. However, an employer may require the employee to follow reasonable notice procedures and the Secretary of Labor is granted authority to issue regulations including to carry out the purposes of this provision.
When do these provisions go into effect?
The FFCRA’s paid leave provisions are effective on April 1, 2020, and apply to leave taken between April 1, 2020, and December 31, 2020.
CASH PAYMENTS TO AMERICANS
Who qualifies to receive a check and how much will an individual receive?
The CARES Act provides a one-time $1,200 recovery rebate for all workers who filed a 2018 or 2019 tax return with incomes up to $75,000 per year ($150,000 for married couples) before phasing out at a rate of $5 per every additional $100 in income and will end completely for those earning more than $99,000 ($198,000 for married couples). An additional $500 per child dependent (under 17) will be sent to qualifying households.
More information on economic impact payments is available from the Internal Revenue Service.
The Treasury and IRS have launched a new 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 qualified income threshold or requirement 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 tax return this year or last year). 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 launched 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? (added April 29, 2020)
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 $500 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 by May 5 in order to have the $500 added automatically to their $1,200 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.
CHANGES TO TAX FILING
What has changed for income tax filing this year?
The IRS tax filing deadline has been moved back: Tax Day is now July 15, 2020. This applies to individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax. The IRS commissioner still encourages filing as soon as possible, and says that refunds are still being processed quickly.
Are there any changes to tax filing for businesses?
The deadline for businesses is pushed to July 15, as for individuals. Businesses claiming COVID-19-related tax provisions will need to adjust their tax returns accordingly.
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 provides $150 billion for state and local assistance with a small-state minimum of $1.25 billion. Of this, $3 billion is set-aside for DC, Puerto Rico, Virgin Islands, Guam, Northern Mariana Islands, and American Samoa. Additionally, $8 billion is set-aside for Tribal lands.
What can the allocated funding be used for?
These funds 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. These funds can be used for costs related to COVID-19 from March 1, 2020 and ending December 30, 2020.
What is the formula for state, county and city assistance?
To calculate the amount for state assistance, multiply $150 billion (the total amount provided for state and local assistance) by the ratio of the state’s population over the United States’ population, excluding DC and the other territories. This is subject to an adjustment to account for the small-state minimum of $1.25 billion. Approximately 15 states are small enough to receive the $1.25 billion minimum instead of a proportional fraction of the total.
To calculate the amount for a county or city assistance, multiply 45 percent of the amount allotted to the state by the ratio of the local government unit’s population over the state’s population.
How can a state, territory, or local government unit apply?
The Department of Treasury will be in charge of disbursement and will require the head of the state, territory or local government to provide Treasury with a signed certification of the proposed uses of the funds. Further guidance has not yet been issued by the Department of Treasury.
Is there any aid that the University of Delaware or Delaware State are eligible for?
Yes. The bill includes a $30.75 billion Education Stabilization Fund that will support both K–12 and higher education. A total of approximately $14 billion is reserved for higher education, with approximately $12.5 billion of that being used for a Pell-weighted formula grant program for all institutions of higher education; both UD and DSU will benefit from these funds. Institutions will receive funding based on their share of all Pell recipients (75 percent weight) and their share of full-time equivalent, non-Pell students who were not enrolled exclusively in distance education prior to the outbreak (25 percent). In addition, 7.5 percent of the higher education funds—or just over $1 billion —is reserved for additional support for historically black colleges and universities (HBCUs) and minority-serving institutions (MSIs), including Delaware State. Institutions must use at least half 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 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; no less than 50 percent 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 September 30, 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.
Borrowers will receive a notice of relevant action taken on their account within 15 days of the bill’s enactment and will receive at least 6 notices beginning August 1 notifying them about the end of the suspension period and highlighting the option to enroll in income-driven repayment options.
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.
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.