On Wednesday, the Senate approved nearly $2 trillion in aid in a government relief package—the biggest in American history—in hopes to offset the economic distress caused by the COVID-19 pandemic. The House has set a Friday voting deadline, but it is expected to pass, then head to the President for final approval.
As a financial buffer for American residents, the package will distribute a direct, one-time payment of $1,200 per taxpayer. There is, however, a threshold of $75,000—those who earn more will begin to see a phase-out of the credit, which disappears entirely for those who earn more than $99,000 (on an individual basis, not per household). Families with children will receive an additional $500 per child.
A concern among real estate agents has been their self-employed, independent contractor status. However, with the help of the National Association of REALTORS®, the package includes a provision that would allow independent contractors to apply for unemployment benefits. Gig-economy workers and freelancers will also be eligible, with payments increased by $600 weekly for four months.
“The National Association of REALTORS® is grateful that the U.S. House and Senate have come together to craft this extensive, bipartisan economic relief bill,” says NAR CEO Bob Goldberg. “Over recent weeks, NAR has worked tirelessly with Congressional leaders on behalf of our members to ensure small business owners, the self-employed and independent contractors have been included in the three relief packages Congress has passed to date. With over 9.5 million jobs in the real estate, rental and leasing industry, and every two home sales generating one job in this country, the real estate industry will represent a key component of our national recovery.”
The bill also includes $350 billion in loans to help small businesses that may be struggling from COVID-19-related closures—covering salary, wages and benefits worth 250 percent of an employer’s monthly payroll, with a max loan of $10 million. NAR helped secure Small Business Administration (BA) 7(a) loan eligibility for independent contractors and those with commission-based income, as well as their inclusion in the forgiveness provision of the plan.
According to the NAR advocacy team, these loans would not require much in terms of up-front certification, providing funding to the SBA to help expedite loans and giving the administration the authority to include more lenders into the SBA loan program, increasing options for businesses.
The bill would also delay due dates for employer payroll taxes.
“All of the payroll taxes of an employer and one-half of the self-employment taxes of a self-employed individual, as well as one-half of the estimated taxes of the individual that arise between the effective date of the act and the end of 2020, would not be due to the Treasury Department until Dec. 31, 2021, with the other half due by Dec. 31, 2022, if passed,” according to the NAR advocacy team.
In addition, the bill includes:
· A tax credit for retaining employees for up to 50 percent of wages paid during the pandemic crisis; only businesses forced to pause operations or who experienced a 50 percent drop in gross receipts from the previous year are eligible.
· A $500 billion pool of taxpayer funds to create loans, loan guarantees or investments to or in businesses, states and municipalities that have been damaged by the crisis
· $17 billion in loans and loan guarantees for “businesses critical to maintaining national security”
· $117 billion into hospitals and veteran healthcare
· Suspension of federal student loan payments until Sept. 30, with no interest accrual
How will the bill impact consumers, the economy and housing market? Here’s what industry experts have to say about the stimulus package:
“The stimulus package is positive news. Job cuts due to the coronavirus are dampening the confidence of consumers. The goal is to reverse that damage quickly and with the help of this package, we will get there.” – Lawrence Yun, Chief Economist, NAR
“Provisions in the stimulus package will help put money in the pockets of consumers who have lost income or are facing increased expenses as a result of COVID-19 disruption through direct payments, as well as increased unemployment benefits. Loans for small businesses and affected industries should help them keep more employees on payrolls and meet other payment obligations despite loss of revenue. These measures will help homeowners and renters better meet their obligations, and prop up consumer spending, which drives roughly two-thirds of the American economy—but this stimulus will likely not be sufficient for everyone to meet all obligations. Fortunately, Fannie and Freddie and private banks have rolled out mortgage forbearance programs for individual owners as well as owners of multifamily properties who agree to suspend evictions. The hard pause and cooperation to fight the spread of COVID-19 is essential. Creativity and cooperation from individuals, corporations and institutions to minimize damage to credit and confidence is a necessary precondition for a quick post-crisis snap-back.” – Danielle Hale, Chief Economist, realtor.com®
“Congress just threw a life preserver to the American worker. Direct cash payments are efficient—they allow a person to choose where the money can be best put to use—and least distortionary; they don’t favor one industry or group over another. In the short run, a quick cash injection will keep mortgage payments flowing and prevent unnecessary downward pressure on home values. Unlike the Great Recession, this crisis need not alter the long-run trajectory for the housing market. In the absence of action, millions of temporarily unemployed renters and homeowners would be facing great financial stress. The steps Congress and the Federal Reserve are taking increase the speed at which the housing market can return to normal.” – Dr. Marci Rossell, Chief Economist, Leading Real Estate Companies of the World®
“The fiscal stimulus package is certainly a positive step. Together with the earlier move to expand unemployment insurance and sick time, as well as the Fed’s support for the credit markets, these policies will help to bolster spending, which is expected to bear the brunt of the virus as consumers stay home and some workers become unemployed. How much of the negative impacts this stimulus will offset remains contingent on the scope and duration of the outbreak. If the U.S. is not able to reign in the coronavirus before the second half of the year, then even this unprecedented stimulus will likely be inadequate. However, if the outbreak is short-lived, this package will provide part of a much-needed financial bridge to a better economic environment. In either case, more actions will likely be necessary given the unprecedented postponement (at best) or loss (at worst) of economic activity.” – Jordan Levine, Deputy Chief Economist, California Association of REALTORS® (C.A.R.)
“The Senate has taken an important step forward to help American families and businesses that have suffered economic hardship stemming from the coronavirus outbreak. This bold, bipartisan economic stimulus package contains key provisions to help small businesses, including many home-building firms, to keep their doors open and meet their payroll requirements. It also provides needed cash infusions to families to help them pay their mortgage or rent during this unprecedented hit to our economy. The House needs to act promptly to pass this bill and get it to the president’s desk for his signature. Given the magnitude of this crisis and its ongoing detrimental effects on the housing sector, further action may be necessary.” – Dean Mon, Chairman, National Association of Home Builders
“The fiscal package will help families that have a bread winner that has been laid off, helping them to remain current on their mortgage or their rent. Shelter is a basic need, and with high housing costs in many parts of the U.S., the cash injection will help families through this unexpected economic turbulence. The package will lessen the blow to the economy and make it well poised for a bounce-back. With mortgage rates at a historic low, housing may be the sector that helps pull the rest of the economy into recovery.” – Frank Nothaft, Chief Economist, CoreLogic
As the coronavirus and its impact on the industry unfold, RISMedia is providing resources and updates. Get the latest.
Liz Dominguez is RISMedia’s senior editor. Email her your real estate news ideas at ldominguez@rismedia.com.
How would an agent apply for unemployment, through their local state unemployment office or can they do it online?
how do we apply as a Realtor or small business owner?
Penny Collins
Hi Penny, thanks for reading! We’ll be publishing updates answering these questions as the information comes in. Stay tuned!
Thank you for the update. Do I understand this correctly? As a Realtor
I will be eligible to apply for unemployment to assist during this crisis?
How do we do that?
Judi Pakay
Hi Judith. Thanks for reading! As it stands, REALTORS® will be eligible to apply for unemployment benefits. Stay tuned for more information!
Thank you for this great article. The new stimulus package will hopefully make a big difference. Hoping the business owners that bought businesses through bank loans with SBA backing will get a deferral in payments for a period of time. Between rent, labor, and other expenses, the business owners with SBA loans may be crushed before they get on the other side of this economic challenge. Not being able to pay the bank loans may have a long term impact on their credit as well. Getting another loan out, as proposed by the Fed, might not be the best solution. A deferral in payment may make a big difference. Many of my clients have purchased a very successful business and have sizeable loan payments. I would be glad to hear any thoughts on getting this message to the right ears. Unlike realtors that have the NAR supporting them, most small business owners who acquired businesses over the last ten years represent a very important, but fragmented group nationwide. Thank you again, Brian Stephens, of BuyBizUSA
As a Realtor and Broker this seems to be good news for we independent contractors (Realtors). This article doesn’t seem to address what steps we would take to apply for the Independent Contractor benefits or have those logistics not been hammered out yet ?
Hi Thomas, thanks for reading! The bill has not yet been approved by the House and President. As soon as we have more information, we’ll be publishing additional coverage. Stay tuned!
Please in the future do not allow your political bias to show through. You tried hard but it is evident that you could not resist taking a left-leaning view especially toward the end of the article. Stop with the partisan news and just be honest -please and thank you!
This was an excellent summary of what is to come and how it will help each aspect of the economy – we r a strong nation and a proud country – with prayer: obedience to the guidelines and our faith as a nation we will weather this storm
I’m over 75 and do not file a tax return because I earn below the $50,000 per year allowed even with my social security earnings. I still am employed as a Realtor. Will I get this $1200 stimulus check?
Hi Marjorie,
We’ll be publishing additional information on how to apply and any stipulations. Stay tuned!
Thanks for the updates.
What is the procedure for Realtors to collect the offered unemployment benefit?
Hi Chris,
As soon as we receive more information and the bill passes the House and is signed by the President, we’ll be publishing more coverage. Stay tuned!
Dear Liz
I am a part time realtor will I be included in this package.My office is in Bronx NY
Hi Faton,
As it stands, all taxpayers will receive the $1,200 check if they earn under $75,000 annually–it begins phasing out at that point. As an agent, you should be eligible for unemployment benefits as well. Stay tuned for updates as we will be publishing more information as it becomes available!
Hi and Thank you for this information.
How and where do Realtors, such as myself, apply for self-employed independent contractors ?
Please advise of this process. Thank you. Stevie D. ReMax
Hi Steve, thanks for reading! We’ll be publishing more information on how to apply for these benefits as the information becomes available. Stay tuned!
Great Article….. lacking direction which I hope will come in a follow up news release sooner rather than later.
Hi Jonathan,
Thanks for reading! We will be publishing more information as it becomes available to us, so stay tuned!
Will $1200 checks be only available to citizens of USA? Or will green card/immigrant status residents also be eligible if they have a social security number and pay taxes?
If $500 is only paid out for children UNDER 17 years of age, are those teenagers 17 years and above eligible for the $1,200 check?
Thank you.
Hi Pauline,
As it stands, per the proposed bill’s language, all taxpayers will be receiving the full $1,200 check if they earn under the annual threshold of $75,000–the amount will begin phasing out at that point. As for children, we will be publishing more information as it becomes available to us, so stay tuned!
THANK YOU EVERETT. YOU COULD NOT HAVE SAID IT BETTER.
How do I apply for my wife and I and also how do I apply for the extra amount as I am a Realtor?
Hi Wallace, thanks for reading! We’ll be publishing more information on how to apply for these benefits. Stay tuned!
Almost impossible to submit for unemployment as a realtor because standard form asks for income during one particular week and we don’t get paid that way – form does not allow for comments
thank you
Hi Fran,
I’d imagine there will be changes to the application process as self-employed and freelance workers will be eligible for these benefits under the proposed bill. We’ll be publishing more information as it comes in, so stay tuned!
Hi Liz, I am a Nevada Realtor of 25 years, I lost everything in the recession with no financial assistance. Can I assume, that we will be included in the SELF EMPLOYED status for unemployment! I pay double tax, I pay income and self employment tax, perhaps our self employment tax gets kicked back to us or we are allocated a weekly check, like all other unemployed folks.. I look forward to your response!
Hi Rebecca,
Yes, as it stands and thanks to NAR’s advocacy efforts, self-employed individuals will be eligible for unemployment benefits. Stay tuned for updates as we will be publishing more information as it comes in!
I am on social security because of my age however I still work as a realtor. Can I still get unemployment ? Will I also get 1200$ or is it one or the other? Thank you for your help.
Hi Rima, thanks for reading. As the bill currently stands, every taxpayer will be receiving the $1,200–that is separate from the unemployment benefits you may apply for. We will be publishing more information as it comes in, so stay tuned!
Thank you. I look forward to more details in the near future.
As a realtor, self employed, how does one apply for the benefits offered? Thank you. Jeanne
Hi, Jeanne. Thanks for reading! We will be publishing more information on this as it comes in, so stay tuned!
Hi Liz,
Very informative article, it sound very comforting. I wish I knew now how to apply?
I hope instructions will be coming soon !! Be safe everyone 🙂
Thank you for the information Liz !!
Thanks for reading, Marivel! We will be publishing updates as they come in, so stay tuned!
This is wonderful information. I hope everyone that has made a comment can see my response.
BE Patient… this has not even been signed by the President yet. This is an update. I assure you there will be procedures and answers to your questions. Help is on the way. For those that can’t wait to be negative or find something lacking with this report, I say take a look in the mirror to see what your negativity is doing to your face…it takes less energy to be positive than to be negative and my smile is much nicer to look at than those sour puss faces.
Be grateful, be patient, help is coming.
Thanks for the optimistic message, Susan! We will definitely be sharing more information on how to apply for unemployment benefits as it comes in. Thanks for reading!
Who qualifies for the stimulus payments?
Per Wall Street Journal Article one-hour ago
The payments go to almost any adult with a Social Security number, as long as they aren’t dependents of someone else. Those adults get the payments for the children in their household.
Payments start phasing out for those with income above $75,000 in adjusted gross income for individuals, $112,500 for heads of household (often single parents) and $150,000 for married couples. The payments start shrinking above those levels. For those with no children, the benefit disappears at $99,000 for individuals and $198,000 for married couples.
It’s great to see NAR is being proactive in our DC office. The $1200. is helpful, however as a Broker/Owner the preferred solution would be a fast track approved, SBA/Chase, low interest, unsecured, revolving, $50,000-$100,000. line of credit, with a 12-24 month maturity.
May God bless America & President Trump.
When you say, one can not earn more than $75,000 per yr , are you saying net or gross and is that for just me or combined with my husbands income. Also I am incorporated – I’m a Sub Chapter-S and the only person on my payroll. Can I still collect unemployment?