Money Talks

Listeners want to know how the CARES Act will affect their personal finances. Host Dr. Nancy Lottridge-Anderson, remotely, answered questions for the hour.

• The Mississippi Department of Employment Security announced recently that Mississippi workers who are not able to work due to COVID-19 will be eligible to file for unemployment benefits.                  This applies to:
• Anyone who is quarantined by a medical professional or a government agency.
• Those who are laid off or sent home without pay for an extended period by their employers due to COVID-19 concerns.
• Those who are diagnosed with COVID-19.
• Those who are caring for an immediate family member who is diagnosed with COVID-19.
• The governor on Sunday released a “Memorandum of Understanding” after Congress passed their legislation. He reminded us:
• Emergency increase in unemployment compensation benefits. The weekly benefit amount goes up by $600. This includes workers that are self-employed – or freelancers or gig workers.
• Funds the first extra week of unemployment insurance that is made available at the state level.
• Provides additional weeks of unemployment benefits for anyone who remains unemployed after typical state unemployment benefits are no longer available.
• With everyone being encouraged to stay at home, folks can file for unemployment by:
• Visiting the MDES website at www.mdes.ms.gov or call the MDES Contact Center at 1-888-844-3577.
• The contact center hours are 7:00 a.m. to 7:00 p.m., seven days a week.

https://www.clarionledger.com/story/news/2020/03/29/coronavirus-mississippi-tate-reeves-shelter-in-place-covid-19-testing-symptoms-health-department/2936075001/

https://mdes.ms.gov/news/2020/03/20/mississippi-announces-support-for-workers-impacted-by-covid-19/

• President Trump on Friday signed the $2 trillion federal stimulus package called the CARE Act. Here are some of the highlights.
• Most adults will get $1,200, although some would get less. For every qualifying child age 16 or under, the payment will be an additional $500.
• The amount of your check depends on your income. Single adults with Social Security numbers who have an adjusted gross income of $75,000 or less will get the full amount. Married couples with no children earning $150,000 or less will receive a total of $2,400. And taxpayers filing as head of household will get the full payment if they earned $112,500 or less.
• Above those income figures, the payment decreases until it stops altogether for single people earning $99,000 or married people who have no children and earn $198,000.
• The government determines income by looking at the 2019 tax return. If you haven’t prepared a tax return yet, you can use your 2018 return.
• You don't have to sign up for this check. If the Internal Revenue Service already has your bank account information, it will transfer the money to you via direct deposit based on the recent income-tax figures it already has.
• Most people who are receiving Social Security retirement and disability payments each month also get a stimulus payment.
• Student loans
• The federal government has waived two months of payments and interest for many federal student loan borrowers. Until Sept. 30, there will be automatic payment suspensions for any student loan held by the federal government.
• If you’ve borrowed money from the federal government — a so-called direct loan — in the past 10 years, you’re definitely eligible.
• Retirement account rules:
• For the calendar year 2020, no one will have to take a required minimum distribution from any individual retirement accounts or workplace retirement savings plans, like a 401(k). That way, you aren’t forced to sell investments that may have fallen in value, which would lock in losses. If you don’t need the money now, you can let the investments sit and hope that they recover.
• If you aren’t retired and are still making contributions but need that money to live on you can withdraw up to $100,000 this year without the usual 10 percent penalty, as long as it’s because of the outbreak.
• You will also be able to spread out any income taxes that you owe from money withdrawn from an IRA over three years from the date you took the distribution. And if you want, you could put the money back into the account before those three years are up, even though the rules may normally keep you from making a contribution that large.
• The bill makes a new deduction available for up to $300 in annual charitable contributions. It’s available only to people who don’t itemize their deductions, and you calculate this new one by subtracting the amount you give from your gross income.
• The Mississippi Public Service Commission voted to temporarily suspended disconnections of certain utility services due to coronavirus concerns. The restriction will be in place for 60 days and apply to all water, sewer, electricity, and gas services. 
• The bill puts a temporary, nationwide eviction moratorium in place for any renters whose landlords have mortgages backed or owned by Fannie Mae, Freddie Mac and other federal entities. This will last for 120 days after the bill passes, and landlords also can’t charge any fees or penalties for nonpayment of rent.

https://www.msema.org/news/public-service-commission-to-prohibiting-utility-shutoffs/

 https://www.npr.org/2020/03/26/821457551/whats-inside-the-senate-s-2-trillion-coronavirus-aid-package

https://www.nytimes.com/article/coronavirus-stimulus-package-questions-answers.html

Small business load information https://covid19relief.sba.gov/#/ and https://www.peoplelease.com/hubfs/023595_comm_corona_virus_smallbiz_loan_final_revised.pdf

The potentially forgivable SBA 7(a) Relief Loan is not yet available. SBA will have to issue regulations for them in the next couple of weeks before banks can begin taking applications. 

The SBA 7(b) Economic Injury Disaster Loans (what I call the O.G. of SBA loans during times of federally declared disasters) are available, but they will not be forgivable. However, they do have very favorable terms.

Basically, if small business owners can hold on for a couple of weeks and wait until the 7(a) loans are made available, they could reap the benefit of potentially free money by complying with the spending terms (payroll, mortgage, utilities, etc.) and having their loans forgiven over time.

Here's a breakdown HORNE has put together explaining the differences between the two options: https://connect.hornellp.com/en/resources/tax/2-loan-options-can-help-businesses-weather-covid-19-shutdown

HORNE will be rolling out more guidance as they know more here: https://connect.hornellp.com/en/covid19

Phone call questions:

• checks
• getting a check if you owe taxes
• getting a check if you draw social security
• social security
• small business loans
• withdrawing from IRAs
• checks
• credit score
• unemployment
• social security
• email about taxes
• adult daughter's check
• check
• check
• small business info
• disability