Two Cents

Well, I finally received the results of my coronavirus test, and they were negative.

Yes!

That's a relief!

Hooray, we can finally isolate as a family!

We're very fortunate that we can keep doing this show from our private office, but a lot of people aren't so lucky.

As the coronavirus forces many businesses to shut down, people everywhere are losing their jobs or seeing their hours dramatically scaled back.

As of March 21st, 3.3 million Americans filed for unemployment, the largest number in history by a wide margin.

The previous record was set in 1982 at 695,000.

And this might just be the beginning.

Some economists predict that by this summer, over 14 million Americans will have lost their jobs.

It's a unique situation.

In past unemployment crises, the government usually tries to encourage businesses to increase hiring, but this time, we actually want people to stay home to slow the spread of disease.

So Congress recently passed a $2 trillion stimulus package that includes a massive expansion of unemployment insurance to help keep Americans afloat while we wait out the storm.

Even if you still have your job, this bill will most likely affect you, so you should know what's in it.

First--free money!

If you are a United States resident with a Social Security number, not claimed as a dependent, and made less than $75,000 last year, you will receive a $1,200 check from Uncle Sam, plus $500 for each child you have under 16.

(host 2) The more you made over $75,000, the smaller the check gets and is totally phased out for people with incomes greater than $99,000.

But, married filers earning less than $150,000 together get the full amount.

So if Dan makes $105K and Marsha makes $40K, they still both get $1200 each, plus $1500 for their three kids.

You do not have to apply or sign up or do anything at all to get that money.

It's a one-time payment based on your 2019 gross income, and should be arriving in about three weeks or so by mail or direct deposit, if you already have that set up with the IRS.

If you haven't filed your 2019 taxes yet, they can use your gross income from your 2018 tax return.

But if you still haven't filed that either, you should ASAP, or risk not getting your check.

And if you happened to make over $100,000 in 2019 but expect to lose that income this year... well, unfortunately you won't qualify.

Sorry.

Next, the bill provides a dramatic increase in unemployment insurance.

Traditionally, unemployment insurance is only available to people who lose full-time W2 jobs through no fault of their own.

It usually lasts about 26 weeks and pays around 45% of lost wages.

But this bill expands pretty much all of that.

Freelancers, part-timers, gig-economy workers, and even people who still have jobs but had their hours cut can all now apply for unemployment insurance.

You're also eligible if you were about to start a new job, or are too new to a job to normally qualify for benefits.

If the closure of a school or nursing home means you have to quit your job and stay home to take care of someone, you are eligible for unemployment insurance.

Basically, if the coronavirus pandemic has severely hampered your ability to make money, you probably qualify for some kind of benefit.

How much and for how long depends on your state and your previous income level, but the federal government is increasing the duration across the board by 13 weeks, and the benefit amount by $600 a week.

Here in Texas, weekly unemployment benefits are calculated by taking your highest-earning quarter of the last year and dividing by 25, up to a maximum of $454.

So Timothy, who was making about $30K a year waiting tables before his restaurant shuttered, would normally be eligible for $300 a week for 26 weeks.

Now, thanks to this bill, he'll be getting $900 a week and his benefits will last for 39 weeks.

You might be thinking, "Wait, that's more than he was making before!"

And while that's true, there is a catch.

That extra 600 bucks a week is only available for four months, ending July 31st.

So unless Congress extends it, he's only getting $900 for the first 16 weeks.

Since most experts doubt that either this medical or financial crisis will be over by then, Timothy is hardly on easy street.

This bill isn't a magic wand that will keep us all afloat in perpetuity.

It's a temporary life raft to buy Americans some time, and a way to keep money flowing through the economy in the short term.

There's a lot more in it we haven't discussed: student loan suspensions, funds for healthcare, an expansion of loans available to small businesses, and, of course, a $500 billion loan package for large businesses and municipalities.

We'll be talking about those things in the weeks to come, but for now, if your income has been impacted by the coronavirus pandemic, grab yourself a seat on Uncle Sam's life raft while there's still room.

It will give you the breathing space to take a fresh look at your finances and plan for what comes next.

(both) And that's our Two Cents!