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What the COVID-19 Stimulus Package Means for Remote Workers

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The COVID-19 pandemic has plunged the U.S. economy into dire straits. Unemployment has ballooned to record levels, and according to an estimate from the Federal Reserve Bank of St. Louis, job losses could hit 47 million with a national unemployment rate rising to 32%. But there are positive aspects to this otherwise unnerving situation: a COVID-19 stimulus package in the form of unprecedented unemployment benefits and a check to ease the financial burden of workers.

Known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the media-monikered “stimulus package” provides temporary relief for employees, as well as the self-employed, freelancers, gig workers, and some remote workers. However, you’ll have to meet eligibility requirements to know if you’re covered. If you’re worried about your income amid the coronavirus pandemic, here’s what the CARES Act means for some remote workers.

COVID-19 Stimulus Package and Unemployment Benefits

As state and city governments enact social distancing and stay-at-home protocols, many employers are asking workers to perform their duties virtually. For these workers, the CARES Act doesn’t apply in terms of unemployment benefits. The same goes for remote workers, freelancers, and contractors that retain their clients and income during the coronavirus pandemic.

Pandemic Unemployment Assistance

Remote workers, including freelancers, the self-employed, and contractors who have lost all their work or clients due to COVID-19 are eligible for unemployment benefits thanks to the CARES Act, specifically the Pandemic Unemployment Assistance (PUA) portion of the bill. For these individuals, the PUA program will pay freelance, contractor, or self-employed remote workers ½ the state average of unemployment. These workers are also eligible for PUA through Dec. 31, 2020, giving up to 39 weeks worth of benefits.

For freelancers, contractors, and self-employed workers who lost a large portion of their business as a result of COVID-19 but not all of their work, the unemployment stimulus becomes a gray area. In the past, traditional workers who’ve had their hours cut were eligible for partial unemployment benefits. Whether this same idea carries over to remote workers isn’t explicitly addressed in the CARES Act’s COVID-19 stimulus package. 

Exacerbating the problem, state unemployment offices have been inundated with calls, making it nearly impossible to get a hold of someone with an answer. Therefore, it may be beneficial to remote workers with partial income loss to file for unemployment as the only repercussion is a rejection letter from the state.

Remote workers who need to file for unemployment benefits but were previously ineligible should head to their state’s unemployment website to file a claim. Workers will have to provide documentation on their pay just prior to losing their job due to the coronavirus pandemic. Keep in mind that there’s a 10% tax on unemployment checks, so make sure to set that amount aside each week for 2020 taxes.

Pandemic Unemployment Compensation

Pandemic Unemployment Compensation is another portion of the CARES Act that intends to provide full wage replacement for average American workers. On top of state unemployment benefits, eligible workers can earn an additional $600 per week for the next 13 weeks. Remote employees who temporarily or permanently lose their job, freelancers, independent contractors, and freelance workers will all be eligible for the extra $600, provided they meet the following eligibility requirements:

  • Have been experiencing symptoms of COVID-19 and are awaiting a medical examination or diagnosis.
  • Have been experiencing symptoms of COVID-19 or have had a member of the household diagnosed with COVID-19.
  • Are providing care for a member of the household or a family member who has been diagnosed with COVID-19.
  • Have had to quit your job as a result of COVID-19.
  • Had your place of employment closed as a direct result of COVID-19, including shelter-at-home orders or being deemed a nonessential worker.
  • Have had to become the main earner because a member of the household has died as a result of COVID-19.
  • Have been laid off or fired from a job you were supposed to start as a result of the COVID-19 emergency.
  • Are unable to work as a result of self-quarantine advised by public health officials or a healthcare provider.
  • Any other criteria established by the Secretary of Labor to receive unemployment assistance.

COVID-19 Stimulus Package One-Time Stipend

The CARES Act’s COVID-19 stimulus package provides a one-time stipend to eligible U.S. citizens, including remote workers (inclusive of freelancers, self-employed, and contractors). This will include a payment of $1,200 for individuals with an adjusted gross income (AGI) of $75,000 or less or $2,400 for married couples with an AGI of $150,000 or less based on either their 2018 or 2019 federal income tax return.

Eligible individuals will also get a $500 check for each dependent child in their household. Payments are completely phased out for individuals who earned $99,000 or more or married couples who earned $198,000.

If you’re a remote worker or office employee who earned between $75,001 and $98,999, you’ll still get a partial payment of the COVID-19 stimulus package’s one-time stipend. Partial payments will go down by $5 for every $100 earned between $75,001 and $98,999. Click here for examples of how much you’d earn. Workers that have transitioned to a remote arrangement due to coronavirus and any type of worker (employee, freelancer, gig worker) who had a virtual job before the pandemic can still collect the one-time stimulus check given by the federal government.

Although the federal government hasn’t issued a specific payment date, the IRS estimates that checks or direct deposits will go out by the third week of April. You don’t need to file or contact the IRS, as payments will be made automatically using your bank information or address from your 2018 or 2019 tax return.

Loans for Self-Employed Individuals

If you’re a remote business owner or a business owner who hires a remote workforce, you’re eligible for a small business loan program entitled the Paycheck Protection Program. This $349 billion program provides temporary assistance of up to $10 million (or 2.5 times payroll) to small business owners (with under 500 employees).

Money from this loan will help business owners cover employee benefits, payroll costs, and mortgage interest on commercial buildings. Benefits and payroll costs include:

  • Commissions and tips
  • Salary
  • Sick leave
  • Parental leave
  • Medical leave
  • Vacation and holiday pay

These loans may also be forgiven by the U.S. government if the business owner uses the funds to maintain jobs during the COVID-19 pandemic. Funds from these loans must be spent during the next 8 weeks, and the forgiven amount cannot exceed the principal of the loan.

Thanks to the COVID-19 stimulus package, remote workers are finally eligible for benefits that eluded them in the past. While it may replace the income of many virtual workers, the money may ease the burden until the coronavirus emergency at least partially subsides.


Are you a remote worker who could benefit from the COVID-19 stimulus package? Connect with Virtual Vocations on Facebook, Twitter, and LinkedIn to tell us. We’d love to hear from you!

Stock image: BartekSzewczyk

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