Reed: Major Increase in Federal COVID-19 Funds to Flow to RI This Week
PROVIDENCE, RI – In an effort to help alleviate some financial pressure for Rhode Islanders, the state, and local communities, U.S. Senator Jack Reed says a major influx of federal COVID-19 relief funding will begin flowing to the Ocean State this week.
Nearly three weeks after the $2.2 trillion Coronavirus Aide, Relief and Economic Security (CARES) Act (Public Law No. 116-136) was unanimously approved by the full U.S. Senate, Senator Reed, who helped negotiate the bill and led the effort to author a $150 billion Coronavirus Relief Fund for states, says a surge in federal assistance will begin coming to Rhode Island this week through a variety of key programs and initiatives:
STATE STABILIZATION: RI to Get Major Down Payment of Coronavirus Relief Funds
Thanks to Senator Reed’s efforts to include a $1.25 billion small state minimum, Rhode Island will ultimately receive a total of $1.25 billion from the $150 billion state Coronavirus Relief Fund (note to reporters: this $1.25 billion pot of state stabilization funding is in ADDITION to other federal CARES Act dollars the state is receiving for education, health care, transportation, and other key programs). Senator Reed says he recently spoke with Treasury Secretary Mnuchin and expects hundreds of millions of dollars from this funding should be released to Governor Gina Raimondo this week. These federal funds may be used to help STATES meet their financial obligations as they marshal resources to care for their citizens and effectively combat the novel coronavirus (COVID-19) pandemic. The law requires that the federal funds be disbursed no later than April 26 and Senator Reed is already working to provide a second wave of funding for the state through this program.
ENHANCED UNEMPLOYMENT ASSISTANCE: $600 Weekly Increase for Up to Four Months, on Top of State Benefits
The CARES Act also included enhanced unemployment benefits that expand coverage and will provide out of work Rhode Islanders with an additional $600 benefit that is fully funded by the federal government. Thanks to the CARES Act, self-employed gig-economy workers and independent contractors traditionally not eligible for unemployment insurance can now get help. The $600 per week is available for most unemployment benefit claims in Rhode Island, and is retroactive to the week ending April 4, 2020, according to the Rhode Island Department of Labor and Training. Senator Reed is focused on ensuring that the federal Department of Labor follows the law and helps self-employed and gig economy workers who have lost their job due to COVID19.
The Rhode Island Department of Labor and Training (DLT) and other state UI offices had to wait while the U.S. Department of Labor developed guidance on the extra funds. But this week, more eligible Rhode Islanders should start receiving their extra $600 in benefits.
$290 BILLION IN DIRECT PAYMENTS START GOING OUT: $1,200 Economic Impact Payments
THE CARES Act will provide about $290 billion in direct payments to individuals and families, according to the Joint Committee on Taxation.
Starting this week, the Internal Revenue Service (IRS) will start sending out $1,200 payments to individuals with adjusted gross income below $75,000 and $2,400 and to married couples filing taxes jointly who earn under $150,000. The payment declines for those who make more, and those earning over $99,000 for individuals or $198,000 for joint filers are ineligible.
Additionally, parents will receive $500 per qualifying child under 17, regardless of parents’ income level.
For Rhode Islanders who filed taxes last year, the IRS will deposit the funds directly into your bank account using information already on file from previous years’ tax returns. If you believe that the IRS doesn’t already have your information, or if you didn’t file taxes in 2018 or 2019, you can submit your information on this IRS website to help accelerate your payout.
The first wave of payments are scheduled to start today, but they do not all go out at once. According to an IRS briefing to Congress:
• Approximately 60 million payments are scheduled to go out the week of April 13 through direct deposit.
• A second wave will be distributed by the end of April to Social Security beneficiaries who did not file tax returns in the last two years.
• By May 4, the IRS will begin issuing paper checks, at a rate of about $5 million per week, starting with people with the lowest adjusted gross income.
SMALL BUSINESS HELP: Payroll Protection Program
Another core piece of the CARES Act is the $349-billion Payroll Protection Program (PPP) small business lending program.
This program offers a possible lifeline to small businesses, but there have been stumbles by the Trump Administration, causing major glitches in getting it up and running properly. PPP is administered by the U.S. Small Business Administration (SBA) through a network of private accredited banks and lenders and is intended to help cover two months of payroll and certain other expenses for small businesses that were negatively impacted by COVID-19. If properly used for those purposes, the federally-backed loan will be forgiven. Otherwise, it must be repaid, at 1 percent interest.
Many small businesses and banks in Rhode Island have had difficulty navigating the program. Senator Reed says the needless delays are unacceptable and the Trump Administration is assuring Congress it has addressed several of the issues that have held up assistance. But to make the program more effective, Congress still needs to pass a legislative fix and then provide additional resources.
Senator Reed says he will continue pressing the Trump Administration to expedite available federal funds and hold federal agencies and the banking industry accountable for getting money into the hands of small businesses in the near future.