COVID-19 relief: Direct checks and a 90-day tax extension
Update: President Trump has signed a $2 trillion economic stimulus package that would give Americans $1,200 direct checks, and $500 to children. Click here to read the latest updates on the direct checks, and here for more information on the new tax deadline.
Americans may receive direct checks from the government over the next two weeks and will have an extra 90 days to pay their taxes, Treasury Secretary Steven Mnuchin announced at a Tuesday press conference.
“Americans need cash now,” Mnuchin said. While he did not specify a figure, $1,000 is one possibility — a day prior, Republican Sen. Mitt Romney had proposed giving each American that amount.
The concept of the government giving Americans a set amount of money, or a universal basic income, has gained traction in Silicon Valley and was the cornerstone of Democratic candidate Andrew Yang’s presidential campaign.
There will also likely be an income cap on who would get government assistance.
“I think it’s clear we don’t need to send people who make $1 million a year checks,” Mnuchin said.
As businesses shut down and employees are laid off amid the COVID-19 crisis, the Trump administration has proposed a $1 trillion package of measures designed to help people’s finances and the economy.
Along with the direct checks, Americans will also get a three-month tax extension.
If you defer payments on your income taxes for up to 90 days after the April 15 filing deadline, any interest or penalties will be waived. The new deadline will apply to up to $1 million in payments for individuals and up to $10 million for corporations.
However, Mnuchin suggested that Americans should stick to the original deadline.
“We encourage those Americans who can file their taxes to continue to file their taxes on April 15, because for many Americans, you will get tax refunds,” Mnuchin said.
Last year, of the tax returns processed, more than 73% of Americans received refunds, with the average amount totaling $2,725.
Mnuchin added that the $1 million tax limit was selected to take into account small and “pass-through” businesses. Many small companies organize as pass-throughs, which are companies that pay taxes based on their owner’s personal income, rather than the corporate tax rate.
Mnuchin also said that the deferrals would inject $300 billion into the economy.
COVID-19 Economy FAQs
With a slow vaccine rollout so far, how has the government changed its approach?
On Tuesday, Jan. 12, Health and Human Services Secretary Alex Azar announced changes to how the federal government is distributing vaccine doses. The CDC has expanded coronavirus vaccine eligibility to everyone 65 and older, along with people with conditions that might raise their risks of complications from COVID-19. The new approach also looks to reward those states that are the most efficient by giving them more doses, but critics say that won’t address underlying problems some states are having with vaccine rollout.
What kind of help can small businesses get right now?
A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.
What does the hiring situation in the U.S. look like as we enter the new year?
New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.
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