12 Ways the Government Is Helping You Amid the Pandemic

Right now, the COVID-19 pandemic is sweeping through the country and upending lives.

However, the government recognizes the disruption of many Americans’ finances right now. As a result, there are some big money moves being made by the government, primarily through new laws like the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act.

Following are some ways the federal government is helping individuals during the coronavirus crisis.

1. Stimulus payments

Under the recently enacted CARES Act, tens of millions of households already have received a one-time payment of up to $1,200 per adult and $500 for each child to help shore up their finances.

However, not everyone is eligible for a stimulus payment, as we reported in “5 Groups Who Won’t Get Coronavirus Cash From Uncle Sam.”

2. Mortgage payment relief

The CARES Act offers two forms of mortgage payment relief to people with a federally-backed mortgage: a moratorium on foreclosures and mortgage forbearance — meaning a temporarily lower payment amount or a pause on payments.

If you’re worried about making your mortgage payments, talk to your servicer as quickly as possible to see what’s available for you.

3. Expanded unemployment relief

For those who have lost or will lose their jobs due to the coronavirus pandemic, it’s possible to see extra unemployment benefits.

For example, the CARES Act authorizes additional unemployment payments of up to $600 extra per week for up to four months. On top of that, unemployment benefits can be collected for an additional 13 weeks, through the end of 2020.

4. Required minimum distribution (RMD) waiver

If you would normally be required to take RMDs in 2020, you’re off the hook: The CARES Act allows you to avoid forced distributions this year, as we detail in “5 Ways the New Coronavirus Stimulus Law Will Help Your Wallet.”

If you don’t need to withdraw money from your retirement accounts — and want to avoid having to pay taxes on that money — this can be a big help.

5. Extra time to contribute to IRAs

Were you unable to contribute the full amount to your individual retirement account (IRA) for 2019?

Well, if you want the chance to pump up your retirement account — to as much as $6,000 or $7,000, depending on your age — you have it. The IRA contribution deadline for 2019 has been extended for everyone, allowing you to make previous-year contributions to your IRA until July 15, 2020.

6. Extended deadlines for tax returns

Did the coronavirus pandemic slow down your ability to file your federal income tax return? Well, you have extra time — everyone does, in fact.

The IRS extended the deadline for filing 2019 returns to July 15. On top of that, the payment deadline has also been extended until then, so you have a few extra months if you owe money.

7. Early retirement withdrawal penalty waiver

If you need to take an early withdrawal from your traditional retirement account in 2020 because you, your spouse or your dependent child were affected by the coronavirus, you can avoid the 10% early withdrawal penalty.

Plus, you get the chance to replace that money over the course of three years, without it affecting your contribution limits for those years.

Finally, even though you do need to pay taxes on the early withdrawal, you can spread out that tax payment over three years.

8. Student loan repayment help

You can defer principal and interest payments on federally owned student loans for six months, interest-free, under the CARES Act. This gives you the chance to use that money for something else, without worrying about additional interest or penalties accruing.

On top of that, the CARES Act enables employers to offer a student loan repayment benefit to employees in 2020 and have it excluded from the employee’s income. In other words, employees who benefit from this will not owe taxes on the student loan repayment they receive from their employers.

9. Paid sick leave

Another recently enacted federal law, the Families First Coronavirus Response Act, requires certain companies to provide paid sick leave for up to two weeks if a worker has to be quarantined or is experiencing symptoms of a coronavirus infection and is seeking a medical diagnosis.

There is also a provision for workers to receive paid sick leave if they are unable to work because they are caring for someone else.

10. Lower interest rates

The Federal Reserve made two big cuts to its benchmark federal funds rate in March. The latter of the two cuts brought rates all the way down to levels not seen since 2008.

This move is bad news for savers because savings account return rates tend to drop after the federal funds rate drops. But for those with debt, a low federal funds rate can be a help: Interest rates on certain types of debt, including credit card APRs, tend to fall, which makes it cheaper to borrow money.

11. Economic Injury Disaster Advance Loan

Small-business owners can apply for a loan advance from the Small Business Administration related to hardship because of the coronavirus crisis. These loans offer up to $10,000, and the loan advance will not have to be repaid by those who receive it.

Small businesses are essential to many local economies, so those who need help because they’ve lost business due to the pandemic might benefit.

Receiving a loan advance from the SBA has been easier said than done for many would-be applicants, however. Both the Economic Injury Disaster Advance Loan program and the SBA program detailed in the next section have been plagued by high-profile problems, including insufficient funding and crashing websites.

12. Paycheck Protection Program

Another program aimed at helping small businesses as well as self-employed individuals is the Paycheck Protection Program offered by the Small Business Association.

With this program, it’s possible to apply for a loan to help keep employees on the payroll. If a loan recipient keeps all employees on the payroll for eight weeks and uses the loan money for payroll, rent, mortgage interest or utilities, the loan won’t have to be repaid.