Second Stimulus Package for COVID-19: Checks, Unemployment and PPP Loans

On Sunday evening, December 27, President Trump signed into law the $900 billion second stimulus package for COVID-19 relief that will provide $600 checks to individuals, $300 in enhanced unemployment checks some $284 billion in Paycheck Protection Program (PPP loans) for small business relief and additional funding for schools, small businesses and vaccine distribution. Given that expanded unemployment benefits lapsed on December 26 for some 12 million Americans, this follow-up to the Coronavirus Aid, Relief and Economic Security (CARES) Act provides much-needed assistance at a vital moment. Though Trump did sign this bill, he did so only after forcefully pointing out that the personal stimulus isn’t enough for people struggling, leading House Democrats to seize on the moment and call a vote for increasing the individual checks to $2,000. While this likely can’t pass the current Republican-held Senate, the Democratic Senate pickups in Georgia mean that the party will hold both houses of congress and the presidency soon — though the Senate is by a razor thin margin, with vice president Kamala Harris breaking a 50-50 tie. There is some thought that this could mean bigger stimulus checks will come soon.

Second Stimulus Package Individual Assistance

Second Stimulus Checks for COVID-19 Relief

The second stimulus checks will total $600 per person, according to the relief package text released by Congressional leaders, which also notes those with adjusted gross income (AGI) $75,000 or more will receive a reduced amount of money until it phases out entirely. This means that your payment will be reduced by 5% or $5 for every $100 that you made above the AGI limit. So if you earned more than $87,000 as an individual taxpayer, $174,000 as a married taxpayer filing jointly, and $124,500 as a head of household, you will not get a stimulus payment.

The second stimulus checks will also provide an additional $600 payment for every qualifying dependent under the age of 17. So if you filed your taxes as a married couple with three children, you could get up to $3,000. Currently, there’s no limit on the number of dependents that you can claim as long as they are within the age requirement and you claimed them on your tax return.

The second stimulus checks are half the maximum payment of $1,200 for adults paid out to adults as part of the CARES Act, and they are also meager compared to the once-proposed $2,000 stimulus checks.

Though President Trump signed the bill, he did criticize the $600 checks, saying Americans should have gotten more money. House Democrats, led by Speaker Nancy Pelosi, responded by passing a bill increasing the payment to $2,000. House Majority leader Mitch McConnell, though, went against the President and denied having this provision pass by unanimous consent. Though in theory it could still be voted on, with McConnell against the increase it seems unlikely to happen.

Enhanced Unemployment Benefits: Second Stimulus Package

The second-stimulus package includes $300 in enhanced unemployment benefits, set at $300 per week.

Second Stimulus Package Relief: Food and Housing Protections

The second stimulus package extends the moratorium on evictions, which ends at the end of 2020, through January 31, 2021.

The packages provides $25 billion in assistance to those struggling to pay rent.

Second Stimulus Package Business Assistance

The second stimulus includes a number of relief measures for businesses. This includes a $284 billion expansion of the Paycheck Protection Program, which provides forgivable loans to businesses to cover payroll and other expenses. There will also be $45 billion earmarked for transportation services, including Amtrak and airports. Around $15 billion is being spent in funding for “live venues, independent movie theaters, and cultural institutions.”

PPP loans are available for companies who didn’t get a loan in the first round and for those who did not. For companies applying for a second PPP loan, there are stricter requirements: the firm must have 300 or fewer employees, while those applying for their first loan can have up to 500. Those firms looking for a second loan must also demonstrate a 25% year over year decline in gross receipts for at least one quarter in 2020.

Each company is eligible for up to two and a half times their monthly payroll — though food and hospitality businesses can get up to three and a half times. The limit for firms looking for their first loan is $10 million, and is set at $2 million for a second PPP loan.

Second Stimulus Package: What’s to Come?

With President-elect Joe Biden set to be inaugurated in January — with a Democratic-led House of Representatives and possibly a Democratic Senate, depending on the outcome of two special elections in Georgia — there could be more bills to come based on how the virus and the economy continue to progress in 2021. President-elect Biden called the $900 billion relief package “an important down payment” toward another stimulus deal that could be presented in 2021.

The Bottom Line

President Trump has signed the $900 billion second stimulus relief package into law. The package includes individual stimulus checks up to $600, $300 in enhanced unemployment benefits, $284 billion in small business relief and other measures to distribute vaccines. More relief could come after that, though much of that will depend on how the politics shake out.

Tips for Managing Your Money During COVID

Now more than ever, getting some from a financial advisor may make sense. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool connects you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors, get started now.
If you’re struggling to make ends meet, you may want to look at how you are spending your money. Getting a budget set up and sticking to it may help.