Dear Residents & Business Owners:
Today’s update will focus on some of the economic decisions being made at the federal and state level to support workers and small businesses. As I mentioned in my update yesterday, I dialed-in to a conference call hosted by Senators Booker and Menendez late yesterday afternoon, specifically staged for NJ Mayors (more than 300 Mayors were on that call). It was very informative but much of the Q&A focused on municipal bonding support and things connected to local government staying solvent as we face the prospects of decreased revenues and cash flow connected to this crisis. I’ll spare you the details of all that, except to say that there is good communication between all levels of government on this topic to ensure we maintain local municipal services for our residents.
I will concentrate my message today on how the Federal Rescue Package will roll out (functionally); what you can expect (will you get a $1200 check?); and what you need to do (how do I apply?)? The Coronavirus Aid, Relief and Economic Security Act (or CARES Act) is the $2 trillion stimulus package we’ve all been hearing about that was signed by the President yesterday (Friday). This far-reaching legislation stands as the largest aid package in US history. It represents a massive financial injection into a struggling economy with provisions aimed at helping American workers, small business and industries grappling with this economic disruption. You can read ALL the details in Senator Menendez’s Press Release.
The “top line” items I’ll focus on contained in the CARES Act are the Help for NJ Workers and the Help for NJ Small Businesses.
Help for NJ Workers: Eligibility for Government Checks
- Eligibility is based on your 2018 Tax Return (or 2019, if already filed). All individuals earning less than $75,000 (Single Filer) or $150,000 (Joint Filer) will receive a $1200 check
- That amount is reduced by $5 for every additional $100 earned and phases out to zero at $99,000 (Single) and $198,000 (Joint). Example: A Single Filer earning $80,000 would get a $950 check. ($5,000 earned over $75,000, divided by $100 = 50 X $5 = $250 decrease from $1200. Hence the $950 check)
- A $500 check for each dependent child (4 max) is included in the package. Example: A Married couple (Joint filer) earning under $150,000 with 4 children would receive a $3400 check ($1200 each plus $500 for each child)
- Checks are expected to be mailed (or direct deposited if IRS has that info for you) within 3 weeks
- You do NOT need to sign up or apply as long as you’ve filed a tax return
NBC News has a great link with a clear explanation and easy FAQ format.
Help for NJ Workers: Expanded Unemployment Benefits
- The maximum unemployment benefit amount will be increased by $600 per week above one’s base unemployment compensation benefit through July
- Self-employed individuals are eligible to apply for Unemployment Benefits for the first time ever
For a more detailed explanation of these benefits and the process to apply, the NJ Department of Labor has created a great tab on their website dedicated to the COVID-19 Crisis.
Help for NJ Workers: Access to Retirement Assets
- The IRS will waive the additional 10% penalty tax on early distributions from IRAs and defined contribution plans (such as 401k plans) in the case of coronavirus-eligible distributions up to $100,000
- These withdrawals may also be re-contributed to the plan in the future
- Defined contribution plans (401k’s) are permitted to allow plan loans up to $100,000 and repayment of plan loans is extended for employees who are affected by the coronavirus
Help for NJ Small Businesses: Loans, Grants and Tax Credits
- Up to $10 million per business available to small businesses with less than 500 employees under the new Paycheck Protection Program. Loans are forgivable for payroll costs, mortgage interest payments, rent and utilities to keep struggling business afloat and workers employed. Loan payments would be deferred for six months
- Up to $10,000 in SBA Emergency Grants for small businesses through the Economic Injury Disaster Loan (EIDL) program
- Worker Retention Tax Credit for employers, including non-profits, whose operations have been fully or partially suspended. The bill provides a refundable payroll tax credit for a percentage of wages and compensation paid to eligible employees during the COVID-19 crisis
To our local Business Owners, I hope you are reading these details carefully, especially the first and third bullet points above. This is real relief (not necessarily loans you have to payback) that can ensure solvency and possibly save a business otherwise in dire straits because of this shutdown. As we receive more information, we will convey it and you can rely on the Gloucester County Department of Economic Development for guidance on these issues. Again, their direct line is 856-384-6963.
Continue practicing your social distancing through the weekend. Be diligent….be patient….be Harrison Strong!
Together for Harrison Township,