Economic Assistance Payments

Last week, the federal government passed the Coronavirus Aid, Relief, and Economic Stability Act (the CARES Act). The law appropriates $2 trillion to provide direct payments to individuals, strengthen unemployment benefits, and provide support to small businesses. I am encouraged that Congress and the President are taking bold action to help those who are hurting during this time. I want to take a moment to give you specific information on what benefits you will receive in this bill, and how you will receive those benefits.   

First, the federal government is sending one-time payments of $1,200 to individuals ($2,400 for married couples) who filed taxes in 2018 or 2019. Additionally, individuals are entitled to an additional $500 for every dependent under the age of 17.

Regarding eligibility, individuals who earn less than $75,000 per year ($150,000 for married couples) will be eligible to receive these Economic Assistance Payments (EAPs). If an individual makes more than $75,000 per year (more than $150,000 for married couples), then the payment will be smaller than stated above.

Second, the Internal Revenue Service (IRS) will be managing the distribution of the payments. The IRS will use individual tax filings to calculate the payments and distribute them. If you have filed your 2019 taxes, then that tax return will be used. If you have not filed your 2019 taxes, then your 2018 tax return will be used. Moreover, the IRS will deposit the payment directly into the bank account reflected on the individual’s most recent tax return. However, if your tax returns do not include bank account information or direct deposit information, then you will be able to provide that information through an online portal that the IRS will launch soon.

Finally, the payments will not be considered taxable, and no citizen will be obliged to report these payments as income.   

For further information about the Economic Assistance Payments, please see the below link to the IRS.

IRS: https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know

Changes to Unemployment Benefits

The CARES Act dramatically increases Minnesota’s ability to maintain unemployment benefits to those who have lost work due to the COVID-19 outbreak. Specifically, the CARES Act appropriated $250 billion to boost unemployment benefits by as much as $600 per week for individuals (depending on previous income, etc.). Additionally, the bill provided unemployment benefits for self-employed workers, part-time workers, and gig-workers. Furthermore, unemployment benefits have been extended by 13 weeks to those who are eligible.

Let me be clear, the CARES Act did not create a new federal unemployment program for which you must apply. Instead, this bill simply “super-charged” our state’s unemployment benefit program. As such, continue the same process through Minnesota’s unemployment benefit program if you have lost work due to the COVID-19 pandemic.

Currently, Minnesota government is working very hard to implement the new changes into our unemployment benefit system. For those who are newly eligible for unemployment benefits, (such as independent contractors, part-time workers, etc.) please regularly check the Minnesota Unemployment Insurance agency website for updates.

The Minnesota Unemployment Insurance agency is encouraging individuals to apply online rather than calling the agency due to the large volume of calls they are receiving. Online applications are the quickest way to ensure that your request is processed.

Here is a link to Minnesota’s unemployment benefit program: https://www.uimn.org/applicants/index.jsp