The US Senate passed $ 2 trillion on Wednesday evening economic recovery plan which appears to give the self-employed and the odd-job economy – including real estate agents – access to unemployment benefits at a crucial time when many real estate markets are frozen.
The 880-page bill is huge and has a number of different components – like some restrictions for large corporations and Trump-owned businesses – but for real estate agents in the markets where real estate activity is essentially prohibited, the bill could bring immediate relief.
The National Association of Real Estate Agents (NAR), which has created a regularly updated guide for navigating the global pandemic, was among groups that lobbied to include independent contractors in expanded unemployment provisions.
Direct payments of $ 1,200
The Senate plan includes $ 1,200 in a single direct payment for individuals and $ 2,400 for married couples, with $ 500 per child. This total amount is available for people with gross income of $ 75,000 or less and couples earning less than $ 150,000. Payments would be phased out, becoming unavailable for people earning $ 99,000 and couples earning $ 198,000.
Nicole Kaeding, vice president of policy promotion and economist for the National Taxpayers Union, detailed the details on her Twitter account and said: “Checks or direct deposit will be issued by the Secretary of the Treasury as soon as possible , probably three weeks for direct deposit and 6 -8 for mail, ”which means if you were to file tax returns and provide the government with your direct deposit information, it would happen sooner.
Kaeding has a full Twitter thread that breaks down the provisions of the bill:
FINAL TEXT !!!!!!!! https://t.co/WkVeYnD4jG
– Nicole Kaeding (@NKaeding) March 25, 2020
Alternatively, the Internal Revenue Service (IRS) has your direct deposit information whether you are collecting Social Security or Social Security Disability.
The IRS will initially determine eligibility based on 2019 tax returns, or 2018 if you have not yet filed for that year. If you have not applied in the past few years, this may affect your eligibility to receive the check. Ultimately, the amount you receive will be based on the adjusted gross income for 2020, according to Kaeding.
Extended unemployment insurance
Unemployment insurance is expected to include for the first time concert workers and the self-employed – which includes self-employed real estate agents. The expanded benefits – which are increased to $ 600 per week – are essentially intended to “close” the gap between state unemployment insurance and a worker’s average weekly wage of $ 1,000.
Real estate agents who have been partially or totally unemployed and are unable to work due to COVID-19 will be eligible for expanded benefits. The exact amount depends on each state’s individual formula, based on the weekly earnings individuals would have paid, based on the most recent tax year.
Even part-time workers, self-employed or independent contractors in states that do not provide unemployment insurance to whom workers will now be eligible to collect unemployment insurance. The additional $ 600 is expected to last four months, while the state insurance is generally 26 weeks. The bill also extends this state insurance limit by 13 weeks.
Extended unemployment insurance is aimed directly at people whose work has been disrupted by the coronavirus, so states where real estate activity has been essentially interrupted such as New York or California.
Small business loans offer payroll tax relief
Many real estate brokerage firms operate as small businesses, with administrative staff on the payroll and in markets where real estate activity is suspended. A provision in the stimulus package will allow small businesses with fewer than 500 employees – including real estate brokerages – to defer payroll taxes so they can continue to employ individuals during the health crisis and be eligible for loans.
Businesses can delay paying payroll taxes for 2020 and pay those taxes over the next two years, according to Kaeding.
These brokerages are eligible for the Small Business Administration’s Salary Protection Program and Economic Disaster Loan, according to a NAR source. Businesses can apply for loans covering payroll, rent, mortgage interest and utilities until June 30, 2020, with loan amounts depending on salary expenses, up to a total of $ 10 million.
The loans are also available for self-employed workers and independent contractors. A portion of the loan, depending on the amount of the payroll, is eligible for a discount. Compensation for commissioned employees is included in this calculation.
Amanda Ballantyne, executive director of the Main Street Alliance, a coalition of small business owners, praised aspects of the bill, but criticized it for not going far enough.
“The best way to support the economy during this crisis is to make sure workers receive paychecks and keep small businesses solvent,” Ballantyne said. “We hear every day from small business owners who were forced to lay off employees and were waiting to know what support was coming to them – and whether they would get a lifeline or if they had to shut down their doors for good. And for them, this package needs items, but in the wrong order.
Will the bill have an impact on the housing market?
Many players in the industry are either in markets where homes are still bought and sold, or look to the future of the industry when the pandemic passes, regardless of the time. Redfin chief economist Taylor Marr believes the bill puts homeowners in a better position to weather the storm than they were in the last recession.
“During the 2008 recession, many Americans had little or no equity in their homes and could not afford to pay their mortgages, causing a flood of supply in the housing market as people were forced to ‘abandon their home,’ Marr said. “This influx of supply, coupled with sluggish demand, has caused house prices to drop dramatically.”
“In contrast, home equity is now at an all time high, the housing market has started the year strong, and homeowners have much higher credit scores than ever before, which means they are less likely to default, ”added Marr. “In addition, the government has instituted a moratorium on foreclosures and is considering a stimulus package that could help homeowners cover their mortgages.”
The bill has yet to be passed by the United States House of Representatives and signed by President Donald Trump.
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