It's been a crazy few months as we adapt to social distancing guidelines at work, school and our daily lives.
Did you ever think you would see going from record-low unemployment claims to record-high claims virtually overnight?
Banks, businesses, and lawmakers are offering relief if you're feeling the effects of the novel coronavirus shutdowns. Most of us know about the $1,200 stimulus check. But did you know about the enhanced unemployment benefits and how businesses are waiving specific fees?
It's hard to track all of the COVID-19 financial aid tools that are available. This guide can help you see that resources are available to help you pay the bills during these uncertain times.
Congress passed the CARES Act in March 2020 with $2 trillion in financial aid for individuals and small businesses.
Two signature stimulus measures include:
- An “economic stimulus payment” worth up to $1,200 per adult and $500 per child
- Extra $600 weekly federal unemployment benefit
There are several other little-known CARES Act benefits, including a $300 charitable donation tax deduction and automatic federal student loan forbearance.
$1,200 Economic Stimulus Payment
First, it was a $1,000 check per family then as much $1,500 per adult and child. Well, the final stimulus check number is $1,200 for single adult taxpayers ($2,400 for joint filers) and $500 per child.
The IRS uses your most recent tax return details to calculate your check amount. You will receive a paper check or a stimulus check debit card if the IRS doesn't have your direct deposit information.
There isn't a minimum income requirement. You earn the full check amount with an income below $75,000 for single taxpayers and $150,000 for joint filers.
A second stimulus check may come later in the year if the economic hardship continues.
$600 Unemployment Insurance
Without record-high unemployment, the CARES Act provides a weekly $600 federal benefit with its Federal Pandemic Unemployment Compensation (FPUC) program. This benefit is in addition to your regular state-provided unemployment benefits until July 31, 2020. You will automatically receive the benefits if you qualify for state unemployment insurance.
In an unprecedented move, the self-employed and others who don't qualify for standard unemployment can still get the $600 weekly federal benefit. The Pandemic Unemployment Assistance (PUA) program offers federal benefits (but not state aid) for up to 39 weeks.
You will need to apply for PUA benefits through your state unemployment website and can receive benefits through December 31, 2020.
The Pandemic Emergency Unemployment Compensation (PEUC) benefits are the third unemployment assistance program from the CARES Act. It extends your state unemployment benefits an additional 13 weeks—up to 39 weeks. You no longer get the $600 weekly federal stipend but you can get $2,400 a month. This program lasts from March 29, 2020, to December 31, 2020.
Don't forget that unemployment benefits are taxable.
The CARES Act offers 120 days of eviction protection for federally-backed housing if you can't make rent or mortgage payments. You must still make rent payments during this moratorium. However, your landlord can't charge late fees or penalties.
States and cities may have similar eviction moratoriums. You should review your current local policies. Contact your landlord or home mortgage service to discuss alternate payment and deferral options.
Federal Student Loan Forbearance
Most federal student loans are in automatic forbearance meaning you don't need to make payments from March 13, 2020, through September 30, 2020.
Your loan principal doesn't accrue interest during this forbearance period. Any payments you make can reduce your principal amount if your current interest balance is $0.
Penalty-free 401(k) Withdrawals
You can withdraw up to $100,000 from qualifying retirement accounts like a 401(k), traditional IRA or Roth IRA. Qualifying coronavirus-related expenses avoid the 10% early withdrawal penalty but you are still on the hook for any income taxes. If you can repay the balance within three years, you can avoid paying taxes on your pre-tax contributions and it is treated as a loan, rather than a withdrawal.
The CARES Act also waives required minimum distributions (RMDs) for your traditional accounts.
Paycheck Protection Program
Qualifying small businesses can apply for a Paycheck Protection Program loan. The PPP was amended (as of 6/5, the Paycheck Protection Program Flexibility Act was signed into law) and we have updated the information below to reflect those changes.
The loan can be forgiven if you use the funds for these purposes with 24 weeks beginning on the date of loan origination:
- Payroll costs (60% of the loan must be used for payroll)
- Interest on mortgages
- Rent payments
- Utility payments
These loans don't require collateral or personal guarantees which reduces your financial stress.
State and Local Programs
Some state and local governments are issuing their own stimulus checks, do a search on their respective websites to see what they are doing with their CARES Act funds.
Also, if you need help with utilities, food, rent, or your mortgage, some local governments have programs for people affected by COVID-19 as well as those who are low income and impacted otherwise. You want to do a search to see if you can get assistance from those sources too.
For example, a reader asked about help with her utilities and she lives in Ocala, FL. As it turns out, the city of Ocala has an energy assistance program available to low-income residents. You can apply here. Many local governments are extending a hand to their residents during this difficult time but are not as good about promoting those programs.
Search via Google
Just enter your county name and “cares act” into Google to see if there are any press releases or other websites discussing it. When I search for “Howard County cares act,” I get over 5 million results about what the county intends to do with the $57 million it's receiving from the state. The CARES Act funds flow to the state and then the state distributes them to the counties. How the money flows will depend on how your state is structured.
Then I went to the howardcountymd.gov website, the official website of the county, to see the press release. There are plenty of news sites, like the Baltimore Sun and the local Patch site, that summarize it but the .gov will be straight from the county itself.
From there, I learn that the money will not be distributed as a cash payment but go towards social services in the county. These include pop-up pantries, help with utility bills, etc. Personally, I think this is better than a check because it will help those who need it most and it utilizes existing infrastructure to maximize the assistance. If you were to set up some application system for checks, you'd have to build it from scratch. That takes time and money (plus it'll probably have issues since they've never done it before). By using existing programs, you just increase their reach and effectiveness.
Contact Your Representatives
If your local government doesn't have anything listed, reach out to your local representatives. For us, we have representatives at the state and county level. At the state level, we can reach out to the governor but more importantly, our delegate in the House of Delegates.
At the county level, which is more appropriate, we have a County Executive as well as the council members on the County Council.
You should find out who represents you and reach out to them for more information if you can't find anything online.
Most banks are temporarily waiving fees and deferring loan payments. Some of the fees you can avoid:
- ATM withdrawal fees
- Overdraft fees
- Bank CD early withdrawal penalties
- Late fees
- Account maintenance fees
- Auto, home mortgage, business payment deferrals
Banks are also increasing the daily mobile check deposit limits. Contact your bank to see how they can help you if you have economic hardship. You may need to opt-in to fee waivers.
Here are the current coronavirus assistance programs of some of the best banks.
Ally Bank already has few fees. Here are a few of their key relief measures:
- Home loan payment deferrals for up to 120 days
- Overdraft and excessive transaction fee waivers
- Existing auto loans can defer their payments
- Expedited checks and debit cards until July 18, 2020
- Free broker-assisted trades with Ally Invest
Learn more: Ally Bank coronavirus (COVID-19) information hub
American Express is reviewing credit card, travel and business solutions on a case-by-case basis.
Bank of America
The Bank of America Client Assistance Program (CAP) offers these services:
- Payment deferrals for credit cards, auto loans and home loans
- Late, insufficient funds, overdraft and maintenance fee refunds
Consumers and small business BBVA USA benefits can avoid these fee waivers:
- Waived and refunded ATM fees for non-bank/network ATMs
- Penalty-free CD withdrawals (if opened before March 1, 2020)
- Overdraft fee refunds
Small business customers can get temporary monthly service fee waivers for desktop remote capture, deposit accounts and virtual terminal for Clover merchants.
Learn more: BBVA USA coronavirus (COVID-19) information hub
Capital One reviews hardship requests on a case-by-case basis. This policy is for consumer and business customers.
You can obtain payment assistance for these Chase Bank products:
- Credit cards
- Mortgages and HELOCs
- Car loans and leases
- Chase for Business products
CIT Bank reviews hardship requests on an individual basis for deposit accounts and mortgages.
Learn more: CIT Bank coronavirus (COVID-19) information hub
Upon request, Citibank vital assistance programs include:
- Payment assistance for credit cards, personal loans and lines of credit
- Non-Citi ATM usage fee waivers
- Penalty-free CD withdrawals
- Safe deposit box fee waivers
Learn more: Citibank coronavirus (COVID-19) information hub
Contact Discover Bank as they review cases individually for their bank and loan products. It's possible that Discover may not report your payment history to the credit bureaus temporarily.
Fifth Third Bank lets you request hardship assistance:
- Fee waivers on select consumer and business products for 90 days
- Payment deferrals up to 90 days for credit cards, personal loans and vehicle loans
- Mortgage payment forbearance for up to 180 days
There will be no late fees during the payment deferral and forbearance period. Home foreclosures and vehicle repossessions can temporarily pause.
An HSBC specialist can review your hardship options for these products:
- Deposit accounts
- Personal loans
- Credit cards
- Business banking
Learn more: HSBC coronavirus (COVID-19) information hub
Huntington Bank offers these payment assistance options:
- Consumer loan payment deferrals up to 90 days
- Consumer loan late fee suspensions through June 2020
- Home foreclosure suspensions through June 2020
- Credit card payment assistance
Marcus by Goldman Sachs
Marcus is the online consumer banking arm of investment firm Goldman Sachs. It has some exciting savings and bank CD options.
You can ask for assistance on these two products:
- Payment deferrals on Marcus loans
- Early withdrawal fee waivers on high-yield CDs
PNC Bank is waiving select fees on checking and savings accounts.
You can also postpone payments with no late fees on these consumer products:
- Auto loans
- Unsecured lines of credit
- Credit cards
- Home mortgages
- Home equity loans
Learn more: PNC Bank coronavirus (COVID-19) information hub
TD Bank offers payment and fee relief for personal and business customers through the TD Cares program. Contact TD Bank to review your assistance options.
Learn more: TD Bank coronavirus (COVID-19) information hub
US Bank is waiving overdraft and late payment fees. You will need to contact US Bank to request assistance for your consumer and business products. For instance, you can get mortgage payment forbearance for up to 180 days.
Learn more: US Bank coronavirus (COVID-19) information hub
Wells Fargo reviews most fee waiver and payment assistance requests on a case-by-case basis. It's possible to defer home loan payments for “an initial three months.” The bank is suspending residential foreclosures, evictions and vehicle repossessions.
Other Businesses Offering Coronavirus Assistance
These businesses and organizations are giving customers a temporary financial break.
Electric, gas, and water services are temporarily suspending service disconnections on delinquent accounts. You may also be able to waive payment late fees. But you will need to contact your utility customer service to request assistance.
Cable, Internet and Phone Service Providers
- Data overages for home internet and cellphone data
- Mobile hotspot data increases
- Late fees (postpaid customers only)
These companies may also suspend terminating accounts until the pandemic threat ends.
Home Prescription Delivery
CVS and Walgreens offer free home delivery for medical prescriptions. Home delivery can be a good option if you're high-risk or rely on public transit to get around.
Auto & Home Insurance
Your homeowners and auto insurance company may be offering discounts during the pandemic. I use State Farm for automobile and homeowner's insurance coverage and they recently called to tell me that I would get a 30% discount on my premiums. The premium reduction will vary from company to company as will the time period of the reduction.
News articles have reported the following numbers for some of the bigger carriers:
- 21st Century Insurance: 25% for April
- Allstate: 15%
- American Family Insurance – one-time $50 refund per vehicle
- Chubb: 35% for April and May
- Farmers: 25% for April
- GEICO: 15% on policy renewals until Ocotber
- Liberty Mutual: 15%
- Progressive: 20% on April and May
- State Farm: 25%
- USAA: 20% on 2 months
Many of these will be automatically applied but it may be worth calling to confirm.
Don't overlook your life insurance policy as its benefits can help you or your loved ones. Most term and permanent-type life insurance policies pay benefits for coronavirus—when your account is in good standing.
If you're not sure if your life insurance covers coronavirus (and pandemics, in general), take the time to call the insurance provider. You potentially have hundreds of thousands of dollars in benefits at stake.
Maybe you only have coverage from your employer. However, employer-provided life insurance disappears if you lose your job or undergo temporary furlough. Having an independent policy means you're covered no matter where you work or live.
Consider getting term life insurance if you don't have sufficient coverage. Term policies offer higher coverage amount than whole life insurance with lower monthly premiums.
You may also qualify for no exam life insurance that expedites the underwriting process. It's possible to get coverage within a few days instead of several weeks.
If your questions weren't answered here, there are several fantastic resources you can lean on for help during this time:
Broke Millennial's Coronavirus Relief Hub: A Google Doc compilation of everything and anything you could possibly need, created by my friend Erin at Broke Millenial.
And New York Times' Your Money Hub for Help During the Coronavirus Crisis.
Many banks, businesses, and government organizations are here to help you during this time. We all go through tough financial times at some point during our life. This aid can help you make ends meet until you get back on track.
Also, be sure to check this list of Coronavirus-related scams so you can be aware of what thieves are trying to do.