The financial response to the Coronavirus in the United States is largely handled by two professional bodies:
- The Consumer Financial Protection Bureau, which provides advice for managing the personal financial impact of the virus
- The Internal Revenue Service (IRS), which handles the collection of tax across the USA.
An overview of the financial response across the USA
Economic Impact Payment
The Economic Impact Payment scheme is mainly automated for taxpayers who filed a return in the tax year 2018-19, calculating and sending relief payments to any individuals who meet the eligibility criteria:
- US residents, with $1,200 for individual or sole household taxpayers, and $2,400 for a married couple filing jointly who both pay taxes
- Retirees and recipients of a Social Savers retirement fund
- Recipients of survivor or disability benefits, railroad retirement benefits, supplemental security income, and VA compensation and pension payments
For those individuals who have little or no income and who didn’t file a tax return in the tax year 2018-2019, they are still eligible for an Economic Impact Payment, but need to register through the Non-Filer tool on IRS.gov as soon as possible to receive their rightful payment.
For individual taxpayers
Tax returns and payments across the United States have been delayed by the IRS and will not be expected until 15th July 2020. This was announced shortly after President Trump’s ‘Emergency Declaration’ on 13th March 2020, outlining that any person with a federal income tax payment or tax return due on 15th April, would now have until July to make the payment. This extension was automatically applied for all income taxpayers for the 2019 tax year, meaning individuals did not have to follow the usual application for delay process.
This relief was extended to individual tax payers’, trusts, estates, corporations and unincorporated businesses. The IRS also confirmed that no interest or penalties would be accrued on delayed payments, until after the new deadline date of 15th July 2020.
Read more about the extension here.
For businesses who have been negatively impacted by the Coronavirus, an Employee Retention Scheme covers credit of up to 50% of an employee’s wages, made against certain employment taxes. For each employee, wages (including specific health plan costs) of up to $10,000 can be utilised in determining the amount that equals 50% credit.
All American businesses with fewer than 500 employees are covered by the Families First Coronavirus Response Act, to provide employees with paid leave either in the face of illness themselves, or in the event that they need to care for a family member.
As well as the tax relief, the CARES Act across the United States contains a grant of over $2 trillion which is directly being used to support the US economy – including around $300 billion in cash grants for individuals and families, and up to $150 billion in state and local government support.
Individual State responses
On top of the federal income tax extension which was passed by the IRS across the whole of the United States, individual states and governments have offered their own forms of tax relief – namely extensions to those paying state and local taxes.
For more information on the various financial responses across the USA, visit the IRS website.