The official proposal of the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act) was released on May 12, 2020. The HEROES Act propsoal is a $3 trillion package proposal which is detailed in 1,815 pages. Below I will highlight areas of the proposal that focuses on stimulus payments, unemployment compensation, rental and mortagage assistance programs, student loan forbearance and forgiveness programs, and financial assistance for small businesses, minority-owned businesses, and nonprofit organizations.
(SEC.20101 - Page 150)
The HEROES Act amendment will include credit and rebates for "dependents" vs "qualifying children". This increases the number of eligible receipients who've claimed dependents with a valid TIN (Social Security Number) older than the age of 17 up to the age of 66 (page 191of HEROES Act) on either the 2018 or 2019 tax return. According to the "wording" of the HEROES Act, this amendement "shall take effect as if included in Section 2201 of the CARES Act". Therefore, if you claimed a dependent on your tax return form (such as a spouse, college student, and adult dependents over the age of 17), you will retroactively be eligible to receive the first round of stimulus from the CARES ACT ($500.00) and the second round of stimulus from the HEROES Act ($1200.00). (Page 159 of HEROES Act) - Retroactive payments owed from the first round of stimulus checks will be processed separately.
(SEC.20102 - Pages 151 - 152)
The HEROES Act amendment will include eligibility for stimulus payments to all qualified persons on a tax return. This means that if the taxpayers' TIN is listed, but the dependent or spouse listed on the tax return form does not have a TIN (for example an ITIN), the tax payer with a TIN is now eligible to receive a stimulus paymment. This is also retroactive in which the tax payer with a valid TIN will be eligible to receive the first round of stimulus payment from the CARES Act ($1200.00) and the second round of stimulus from the HEROES Act ($1200.00). However, the tax payer will not receive additonal stimulus payment for any dependents listed on the tax return form with no valid TIN. Retroactive payments owed from the first round of stimulus checks will be processed separately.
(SEC.20103.2020 - Pages 152 - 156)
The HEROES Act amendment will include protection of stimulus payments from seizures, garnishments, levies, executions, or other legal processes. Therefore, if child support, back taxes, or other court-ordered finanical debt is owed the tax payer is protected from seizure of funds under the HEROES Act. This amendment is not retroactive to the CARES Act.
(SEC.6428A. - Pages 160 - 166)
Stimulus payments under the HEROES Act goes as follows:
Single tax filers with an annual income of $75,000 or less will receive a stimulus payment of $1200.00.
Head of Household tax filers with an annual income of $112,500 or less will receive a stimulus payment of $1200.00.
Couples who filed a joint tax return with an annual income of $150,000 or less will receive a stimulus payment of $2400.
Tax filers with dependents (Single, Head of Household, Couples) will receieve an additional payment of $1200.00 per dependent (with a max of 3 dependents)
Head of Household = up to $3600.00
For Couples Filing Jointly = up to $6000.00
Stimulus payement under the HEREOS Act would be reduced by 5% of the amount above the lower limit as follows:
Single: $75,000 through $99,000.
Head of Household: $112,500 through $136,500.
Married Filing Jointly: $150,000 through $198,000.
Stimulus payment under the HEROES Act is a one-time payment and is non-recurring.
Timing and manner of stimulus payments shall be made as rapidly as possible upon passing of the bill into Congrss. No refund or credits will be made past December 21, 2020.
(SEC6428A - Page 165 - 166)
Individuals or couples who have not yet filed their 2019 tax return are still eligible for stimulus payment under the HEROES Act if a tax return was filed for the 2018 tax year.
(SEC.50001 -50011 Pages 682 - 689)
The HEROES Act bill will amend the CARES Act bill to extend unemployment compensation to January 31, 2020.
Unemployment compensation under the HEROES Act shall not be regarded as a source of income in order for an individual or family to be eligible for benefits or assistance programs under any Federal or State programs or local programs financed in whole or in part with Federal funds.
Individuals who have not yet exhausted all rights to unemployment compensation assistance due to them shall continue to do so up until the week of March 31, 2021.
EMERGENCY RENTAL AND MORTGAGE ASSISTANCE
(SEC.110201. - Pages 934 - 948)
$100,000,000,000 ($1Billion) to be allocated to the Emergency Solutions Grant Program to provide short and/or medium-term assistance with rent and rent-related costs (tenant-paid utility costs, utility and rent arrears, fees charges for arrears, and security and utility deposits).
This grant is for individuals and families whom are deemed "at risk of homelessness". See pages 935-936 of HEROES Act for criterias to be considered eligible for the Emergency Solutions Grant Program.
(SEC.110203. - Pages 961 - 993)
The HEROES Act will put a moratorium in place to prevent evictions and reposessions for 12 months from the enactment date of the HEROES ACT.
The HEROES Act will put a moratorium in place in which a landlord may notrequire a tenant to vacate their home by reason of nonpayment of rent or other fees or charges before the expiration of the 30-day period following the expiration period of the HEROES Act.
In other words, a renter cannot be evicted within the 12-month period of the moratorium put in place of the HEROES Act, and after that 12-month moratorium period a landlord must wait 30 days before proceeding with the eviction process.
This goes for both written and verbal rental agreements in which supporting documentation is not required, just a simple written statement or form requesting the forbearance (page 975).
The HEROES Act will put a foreberance and foreclosure moratorium in place for covered mortgages loans and delinquent borrowers.
Covered Mortgage = any credit transaction that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a 1- to 4-unit dwelling or on residential real property that includes a 1- to 4-unit dwelling, except that it shall not include a credit transaction under an open end credit plan other than a reverse mortgage.
This includes homeowners who became 60-days delinquent on their mortgage loan between March 13, 2020 and the date of the enactment of the HEROES bill.
Under the HEROES Act, delinquent borrowers shall automatically be granted a 60-day forbearance that begins on the date of enactment of the bill.
The borrower shall not be considered delinquent while making timely payments under a trial modification or other loss mitigation agreement.
Loan servicers cannot charge accurual of interest of fees during the period of the forbearance (page 974).
Under the HEROES Act, a borrow can request a foreberance extension for up to an additional 180 days, up to a maximum of 360 days upon written or oral request submitted to the loan servicer affirming that the borrower is experiecing financial hardship that is preventing the borrower from making timely payments directly or indirectly on the covered mortgage.
Under the HEROES Act, the borrow can request automatic forbearance for certain reverse mortgage loans.
See pages 967 - 970 for criteria requirements to qualify for automatic forbearance on a reverse mortgage loan. This also includes borrowers/homeowners who have filed for bankruptcy and has had all debts discharged (page 994 - 995).
The HEROES Act will put a moratorium in place for additional foreclosure and repossession protection for borrowers for six months following the enactment of the HEROES Act bill, regardless of delinquency status.
During the forbearance period under the HEROES Act, the loan servicer will pay or advance funds to make disbursements in a timely manner from any escrow account established on the covered mortgage loan.
This includes property taxes and mortgage insurance paid into an escrow account in which the loan service provider makes the payments on behalf of the borrower.
Service lenders may not report any adverse information to a credit rating agency of the Fair Credit Reporting Act (FCRA) if a borrower is in forbearance under the HEROES Act (page 988).
STUDENT LOAN DEBT FORGIVENESS AND PROTECTION FOR STUDENT BORROWERS
(SEC.110501 - 110501 Pages 1045 - 1053)
The HEROES Act bill will put a moratorium in place and extend the forbearance to private student loans until September 2021.
Under the HEROES Act, interest due on a private education loan that is in repayment shall not be capitalized at any time until the end of September 2021.
Loan Servicers shall not report or adverse any credit information to any of credit reporting agencies for any private student loans during the period in which the Secretrary of the Treasury is making payments on a loan.
Loan Servicers must halt all involuntarily collections related to student loans until the end of September 2021.
Borrowers who are delinquent but are not in default will be granted mandatory forbearance until September 2021.
No later than 90 days after the end of September 2021, the Secretary of the Treasury will carry out a program in which $10,000 of student loan debt will be forgiven.
SMALL BUSINESSES, MINORITY-OWNED BUSINESSES, and NON- PROFITS
(SEC.110601 - 110606 Pages 1053 - 1091)
Under the HEROES Act, no debt collector during the COVID period can perform any of the below tasks from the date of enactment of the HEROES Act bill and ending 120 days after March 13, 2020:
enforce securing a debt by means of reposession.
threaten to take any legal action due to nonpayment of debt or nonapperance at any court hearing related to a debt owed by a small business or nonprofit organization.
collect any debt from the indivdual(s) or their business by means of garnishment, attachment, assignment, deduction, offset, or other seizure from wages, income, benefits, bank, prepaid or other asset accounts owned by the individual(s) or their business.
evict a small business or nonprofit organization from real or personal property due to nonpayment.
disconnect or terminate electricity, natural gas, telecommunications or broadband, water and/or sewer services due to nonpayment.
add to any past due debt any interest, additional unpaid interest, or higher interest rates due to an unpaid debt prior to the expiration of the moratorium put in place.
creditor shall extend to the debtor(s) or a small business or non-profit organization (1) payment period for each payment missed during the covered moratorium period with an equal payment plan
Under the HEROES Act, eligibility for any programs or facilities that offers main street lending under this act will be provided for small businesses, minority businesses, and nonprofit organizations.
lenders will have in place a low-cost loan option tailored to the unique needs of a nonprofit organization, including the ability to defer payments.
protected under the PPP with loan forgiveness in order to continue to serve low-income communties .
lenders will offer and provide at least (1) low-cost loan option that small businesses and nonprofit organizations are eligible for that does not have a minimum loan size.
Clickhere for more information on the HEROES Act 2020 (Coronavirus Reliefe Bill). If there is a particular proposal in the bill that you would like more information on, please leave a comment! 😉